Monday, June 21, 2021

Iran Blacklisted By FATF While Pakistan Stays On The Grey List

[audioplayer file=”http://airworldservice.org/programs/english-audio/commentary-review/COMMENTAR-24-02-2020.mp3″]

Towards making the world safer against international terrorism by restricting the finances fuelling it, the global inter-governmental watchdog Financial Action Task Force (FATF) last Friday took a decision to continue to place Iran on its ‘Black-list’. It meanwhile kept Pakistan on a lower level at its Grey List. FATF with its headquarter in Paris is a 40-member body which tracks the global finances to combat money laundering and terror financing and prepares a list in two different categories placing the subjected countries to serve as an advisory for the international community to take note during their financial transactions with them. Blacklisting a country by FATF means that it is the riskiest to deal with that country financially and the ‘Grey-list’ is a degree better than the Black-list indicating that the subject country is taking desired steps towards curbing money laundering and terror financing but still requires to do more.

Coincidentally the blacklisting of Iran was announced on the day when Iran conducted its Parliamentary elections in which the Conservatives were expected to gain major victory because of the vetting of majority of the reformist candidates by its powerful body the Guardians Council. This election is fought under the backdrop of a heightened tension between Iran and the United States due to Washington’s withdrawal from the Nuclear Deal and its imposition of crippling sanctions on Iran causing wide economic discontent amongst the Iranian people and leading them to participate in intense public protests and consequent apathy in this election.

While the Iranian regime had been expecting to continue with the Nuclear Deal by finding an alternative financial mechanism with the Europe, the announcement of FATF’s Blacklisting of Iran would further complicate matters to achieve that objective. This, along with the consolidation of power by the Conservatives through a major victory in Parliament is expected to further intensify the Iran-US standoff. In fact the placement of Iran in the Blacklist by FATF is also a direct consequence of the factional fighting within Iran between the Reformists and the Conservatives as the required legislation which would have exempted Iran from falling on the FATF Blacklist was passed by the Reformist dominated Parliament under the watch of President Hassan Rouhani, but was blocked by the Guardians Council which is dominated by the Conservatives.

Pakistan, which has a history of terror financing and which has been a source of a number of terrorist attacks in Indi and other places, has been for now retained by the FATF in its Grey- list despite Islamabad’s lobbying with the United States for its removal from that list. Unlike Iran, the FATF has for now exempted Pakistan from appearing on the Black-list on the promise of Prime Minister Imran Khan to root out terrorism financing from its system.

Pakistan, which was earlier on the FATF Grey list from 2012 to 2015, was again placed in this category in 2018 on the insistence of the United States. FATF criticised Pakistan for not doing enough, but Islamabad received support from China along with Malaysia and Turkey to help it being exempted from falling in the Black-list. It is understood that Pakistan’s exemption is also due to its crucial role in the current negotiations between the United States and Taliban which may enable US’s pull-out from Afghanistan as well as its potential role in the US’s quest of isolating Iran. At a time when Pakistan is facing an economic breakdown and Imran Khan has been striving for a remedy, the placement of Pakistan in the Black-list of FATF would have been disastrous for the country.

While the Blacklisting of Iran is sure to create further economic hardships to the country and it is unlikely it is removed from this list in the near future unless the dynamics changes through some kind of negotiations with the United States. It is hoped that Pakistan Prime Minister Imran Khan delivers on his promises and curbs the terror financing and terrorist acts to chart his country on a peaceful course.

Script: Dr. Asif Shuja, Senior Research Fellow, the Middle East Institute,

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