British ‘High-Risk’ Designation for Pakistan Seen as Bad Sign for Anti-Corruption Efforts
03 May 2021

The United Kingdom’s decision to add Pakistan to its list of “high-risk countries” for money laundering and terror financing may make it harder for Islamabad to exit the Financial Action Task Force (FATF) “gray list” in June, experts warn.

On April 12, the U.K. included Pakistan among 21 countries that have failed to stop illegal wealth transfers because of lax fiscal monitoring.

Pakistan’s government spokesperson Iftikhar Chaudhry told VOA the action by London was an “insult” by putting Islamabad among the “weak and nonfunctioning” governments.

Experts say since Brexit, British officials strengthened anti-money-laundering laws to define a high-risk country as one where banks need to do due diligence before accepting foreign transactions.

“This kind of action could conceivably persuade FATF not to allow Pakistan to exit from its gray list,” said Zubair Iqbal, a Washington-based researcher at the Middle East Institute and a former International Monetary Fund official.

The FATF, an intergovernmental organization fighting money laundering and terrorism financing, placed Pakistan on its gray list of countries with inadequate controls over terrorism financing in 2018. Financial experts say the designation has cost the country billions of dollars in lost investment and trade.

Banned groups

British High Commissioner Christian Turner last week met Pakistani Interior Minister Shaikh Rashid in Islamabad and commended Pakistan for its progress in meeting 24 out of 27 of FATF’s action items for the country.

Since Pakistan was placed on the gray list, the U.S., U.K., France and Germany have prodded Islamabad to rein in extremists and the thinly veiled groups that finance them.

Pakistani officials insist they are making progress.

“Pakistan is not an extremist-minded state,” Rashid said April 14, as he announced a ban on the extremist group Tehreek-e-Labaik (TLP).

By Nafisa Hoodbhoy, VOA News, 29 April 2021

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