Grey List Current Affairs - 2020

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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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Sri Lanka removed from FATF’s Grey List

Sri Lanka has been removed from ‘Grey List’ of Financial Action Task Force (FATF) following the new measures taken by the country on financial security. The word ‘Grey List’ identified by FATF refers to a jurisdiction with strategic Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) deficiencies.

Key Highlights

The announcement regarding removal of Sri Lanka’s name from the list of countries at risk for money laundering was made by Sri Lankan Minister of Finance Mangala Samaraweera, after a 5-day FATF plenary concluded in Paris, France.

FATF, the international terror financing watchdog, noted that Sri Lanka set out a sound framework to bring the commitment of all stakeholders for enhancing AML/CFT standards in order to improve compliance and country rating.

Background

Sri Lanka was first included in FATF’s blacklist in 2011, and by 2012, Sri Lanka was listed in the list as a dangerous country with no commitment to financial security plan.

Later in October 2016, FATF subjected Sri Lanka to a review of FATF’s International Cooperation Review Group (ICRG) for assessing the progress of AML/CFT effectiveness in country.

However, since 2016, Sri Lankan government together with country’s Central Bank and other financial institutions has taken several measures to ensure the financial security of country. As a result these efforts, Sri Lanka was declared a cooperating state in 2016 and FATF putted Sri Lanka on its grey list from November 2017. The island nation has reported the progress achieved in the implementation of action plan regularly to FATF.

What is Financial Action Task Force (FATF)?

It is a Paris (France) based inter-governmental organisation established in 1989.

It is the international terror financing watchdog that combats terrorist financing, money laundering as well as other related threats to integrity of international financial system.

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