An international watchdog says it will keep Pakistan on a so-called “gray list” of nations that do not take full measures to combat money laundering and “terrorism” financing but raised hopes its removal will follow an upcoming visit to the country to determine its progress.

According to Al Jazeera, the announcement on Friday by Marcus Pleyer, president of the Financial Action Task Force (FATF), was a blow to Pakistan’s newly elected government, which said it has mostly complied with the organisation’s tasks set for Islamabad.

Pleyer said an onsite inspection by FATF in Pakistan would be done before October, and a formal announcement on Pakistan’s removal would follow.

He said FATF is praising Pakistan for implementing the organisation’s action plans – a clear indication that Pakistan is moving closer to getting off the “gray list”.

The Paris-based group added Pakistan to the list in 2018. The “gray list” is composed of countries with a high risk of money laundering and what FATF considers terrorism financing, but which have formally committed to working with the task force to make changes.

At the time, the South Asian nation avoided being put on the organisation’s “black list” of countries that do not take adequate measures to halt money laundering and terrorism financing, but also have not committed to working with the FATF. The designation severely restricts a country’s international borrowing capabilities.

$38bn in costs

Still, being on the Paris-based international watchdog’s “gray list” can scare away investors and creditors, hurting exports, output and consumption. It also can make global banks wary of doing business with a country.

Pakistan has said it continues to detain suspects involved in terrorism financing to comply with tasks set by the watchdog.

A Pakistani-based independent think-tank, Tabadlab, has estimated it has cost the country’s economy $38bn since it was put on the gray list in 2018.


The FATF is made up of 37 member countries, including the United States, and two regional groups, the Gulf Cooperation Council and the European Commission.


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