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FATF RETAINS PAKISTAN ON THE GREY LIST

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FATF RETAINS PAKISTAN ON THE GREY LIST

INDEX

REFERENCE WITH UPSC-CSE SYLLABUS

  • WHY IN NEWS
  • REASON FOR PUTTING PAKISTAN ON THE GREY LIST

  • ABOUT FINANCIAL ACTION TASK FORCE

  • ESTABLISHED, AIM, THE FATF SECRETARIAT, COMPOSITION
  • GREYLIST 
  • BLACK LIST
  • CONCLUSION

EXPECTED PRELIMS QUESTIONS

EXPECTED MAINS QUESTIONS 

REFERENCE WITH UPSC-CSE SYLLABUS

General Studies-II, General Studies-III

India and its Neighborhood- Relations.

Bilateral, Regional, and Global Groupings and Agreements involving India and/or affecting India’s interests.

Money Laundering

Terrorism

WHY IN NEWS

  • Pakistan on the increased monitoring list (grey list) has been retained by The Financial Action Task Force (FATF).

REASON FOR PUTTING PAKISTAN ON THE GREY LIST

  • UN-designated terrorists such as 26/11 accused Hafiz Saeed and JeM chief Masood Azhar Pakistan had failed to take appropriate action them.
  • FATF has said Pakistan should continue to work to address its tactically important shortages.

ABOUT FINANCIAL ACTION TASK FORCE.

  • It is an inter-governmental body.
  • It is a terrorist financing and global money-laundering watchdog. 
  • The FATF Plenary (The FATF's decision-making body) meets three times per year.

ESTABLISHED

  • During the G7 Summit in Paris established in 1989.

AIM

  • It sets international standards that aim to prevent the harm that is caused to society and illegal activities by terrorist-financing organizations.
  • The necessary political will to bring about regulatory reforms and national legislation in these areas it works.
  • To deal with money laundering first it was formed.
  • To deal with Terrorist financing and money laundering later it added this to its mandate in October 2001.
  • Financing of the proliferation of weapons of mass destruction was added to its list in April 2012.

THE FATF SECRETARIAT

  • At the OECD headquarters in Paris is The FATF Secretariat.

COMPOSITION

  • 37 member jurisdictions and 2 regional organizations. It also has associate and observers members.

GREYLIST

  • Officially named as Jurisdictions under Increased Monitoring.
  • A haven for supporting terror funding and money laundering kind of countries are put in it.
  • It means they can be blacklist in the future.

BLACK LIST

  • Officially named as High-Risk Jurisdictions subject to a Call for Action.
  • Countries or Territories that are Non-Cooperative are put on the blacklist.
  • Countries backing terror funding and money laundering activities are put in it.
  • FATF regularly updates it.

CONCLUSION

  • Military indirectly controls Pakistan and this is a major concern.
  • China has provided financial support to Pakistan in the past and is the big player as long as dealing with Pakistan is a concern. 
  • Pakistan has to control its terror funding and work on peace among the world otherwise there will be direct monitoring and intense scrutiny by International organizations.

 

EXPECTED PRELIMS QUESTIONS

Q1. Consider the following statement regarding FINANCIAL ACTION TASK FORCE

(a) During the G7 Summit in Paris established in 1980. 

(b) At the OECD headquarters in New York is The FATF Secretariat.

Which of the following statement is correct?

(1) a only

(2) b only 

(3) Both a and b

(4) Neither a nor b

SOLUTION

STATEMENT A is incorrect because the G7 Summit in Paris was established in 1989.

STATEMENT B is incorrect because the OECD headquarters in Paris is The FATF Secretariat.

 

Q2. Consider the following statement regarding FINANCIAL ACTION TASK FORCE

(a) GREY LIST: Officially referred to as High-Risk Jurisdictions subject to a Call for Action.

(b) BLACK LIST: Officially known as Jurisdictions under Increased Monitoring.

Which of the following statement is correct?

(1) a only

(2) b only 

(3) Both a and b

(4) Neither a nor b

SOLUTION

STATEMENT A is incorrect because GREY LIST: Officially referred to as Jurisdictions under Increased Monitoring.

STATEMENT B is incorrect because the OECD headquarters in Paris is The FATF Secretariat.

 

Q3. Consider the following statement regarding FINANCIAL ACTION TASK FORCE

(a) It is a terrorist financing and global money-laundering watchdog.

(b) Pakistan on the increased monitoring list (grey list) has been retained by The Financial Action Task Force (FATF).

Which of the following statement is incorrect?

(1) a only

(2) b only 

(3) Both a and b

(4) Neither a nor b

SOLUTION

STATEMENT A is correct because It is a terrorist financing and global money-laundering watchdog.

STATEMENT B is correct because Pakistan on the increased monitoring list (grey list) has been retained by The Financial Action Task Force (FATF).

 

EXPECTED MAINS QUESTIONS

Q. Pakistan on the increased monitoring list (grey list) has been retained by The Financial Action Task Force (FATF). Critically analyze

Sources used:

The Hindu,The Indian Express, British Broadcasting Corporation News, Press Trust of India, Business Standard, The Economic Times