In a rare snub to “all-weather ally” Pakistan, China withdrew its objection after which the global money laundering watchdog the Financial Action Task Force (FATF) has reportedly put Islamabad back on its terrorist financing watch list. An official statement will be made soon in this regard.
The United States moved a resolution against Pakistan at the FATF, a 35-member body which works by consensus. Earlier this week, Pakistan Defence Minister Khawaja Asif had claimed that there wasn’t a consensus against the country. Pakistan had tried to stop its inclusion in on the list by amending its anti-terrorism laws and by taking over organizations controlled by Lashkar-e-Taiba founder Hafiz Saeed.
Earlier, China, Turkey, and the Gulf Cooperation Council (GCC) were opposing the US move. However, they withdrew their objections and paved the way to place Islamabad on the terrorist financing watch list. In September last year, China signed a declaration at BRICS summit that lists the Pakistan based groups Jaish-e-Mohammad (JeM) and Lashkar-e-Taiba (LeT) as terrorist organisations.
The move is part of a broader US strategy to pressurise Pakistan to stop providing safe havens and funds to terrorist organisations. If Pakistan is placed on the terrorist financing watch list, it will invite extra scrutiny from regulators and financial institutions that will be wary of doing business with Pakistani banks. Islamabad was on the watch list between 2012- 2015 for money laundering.
Established in 1989, the Financial Action Task Force (FATF) is an inter-governmental body. It ensures effective implementation of legal, regulatory and operational measures for combating money laundering, terror financing and other related threats to the integrity of the international financial system.