FATF member Current Affairs - 2020

China moves against Pakistan in FATF, Turkey now the only supporter

China has joined India and United States in putting Pakistan on Grey list of the FATF (Financial Action Task Force). Both China and Saudi Arabia have joined US, India and other European countries sending stern messages to Pakistan against its actions of terror funding money laundering

Highlights

A Plenary session of the FATF is to be held in June 2020. China, Saudi Arabia and Turkey were the three countries that supported Pakistan against FATF move in putting Pakistan under Grey List. Now Turkey and Malaysia are the only supporters. 12 out of 39 votes are required to move out of FATF list which Pakistan will not be able to.

Pakistan is currently on Grey List of FATF and with its major supporters withdrawing their backing, Pakistan will continue to remain on FATF Grey list. Pakistan was put on the list in June 2018. It was given a plan of action which the country was supposed to complete by October 2019. Failing of which will place it under black list.

FATF Grey List and Black List

The FATF is a Paris based organization that combats terrorism funding and money laundering.

Grey List

The countries that are not safe and are supporting money laundering and terror funding are included in the list.

Black List

The countries that is uncooperative tax havens for terror funding. They are also called Non-Cooperative Countries or Territories (NCCTs).

Countries currently in Black List and Grey List

The lists now have been renamed to “Call for Action” and “Monitored Jurisdiction”. The Call for Action countries or the Black List Countries include Iran and North Korea.

The Monitored Jurisdiction or Grey List include Iceland, Ghana, Botswana, Syria, Yemen, Pakistan, Mongolia and Cambodia.

The above lists are updates as of February 20, 2020.

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Saudi Arabia becomes 1st Arab country to get full FATF membership

Saudi Arabia has become 1st Arab country to be granted full membership of Financial Action Task Force (FATF) following FATF’s Annual General Meeting held in Orlando, Florida in United States (US).

Saudi Arabia and FATF

Background: Since November 2004, Saudi Arabia has been a founding member of Middle East and North Africa (MENA) arm of FATF group. At the beginning of 2015 Saudi Arabia had received an invitation from FATF as an observer member.

Now, the kingdom’s accession came as global money laundering watchdog celebrated 30th anniversary of its 1st meeting held in Paris (France) in 1989.

The full membership to Saudi Arabia comes after it was reported that Kingdom had made tangible progress for its efforts in implementing FATF’s guidelines.

What is FATF?

It was established in 1989, with headquarters in Paris, France.

Members: FATF comprises of 37-member jurisdictions and 2 Regional Organisations namely Gulf Cooperation Council (GCC) and European Commission (EC). With kingdom becoming a FATF member, the number of permanent members in group is now 39.

FATF Plenary: is FATF’s decision making body. It meets three times per year.

Function: The Financial Action Task Force is an international group responsible for issuing international standards, policies and best practices for combating money laundering, terrorist financing and proliferation and other related threats to integrity of international financial system.

Recent Developments: FATF has notified that Pakistan failed to complete its action plan on terror financing and has strongly urged Pakistan to swiftly complete its action plan by October 2019 or else face consequences.

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