ISLAMABAD -- An international watchdog said Friday it is removing Pakistan from its so-called “gray list” of countries that do not take full measures to combat money laundering and terrorism financing, a move that was quickly welcomed by the country’s prime minister and other government officials.
The announcement was made by Raja Kumar, the president of the Financial Action Task Force, at a news conference in Paris. The FATF welcomed “Pakistan’s significant progress in improving" its anti-money laundering and counter-terrorism financing policies.
Pakistan had been on FATF’s gray list since 2018. Being on the Paris-based watchdog’s gray list can scare away investors and creditors, hurting exports, output and consumption. It also can make global banks wary of doing business with a country.
Friday's announcement means Pakistan will no longer be subject to increased monitoring by the FATF.
It comes after a FATF mission to Pakistan last month, and months after the global watchdog said it believed Pakistan mostly complied with the organization’s demands by acting against those linked to money laundering and terror financing.
In Islamabad, Prime Minister Shahbaz Sharif took to Twitter to welcome the decision, saying that his country’s removal from the list was “vindication of our determined and sustained efforts over the years. I would like to congratulate our civil & military leadership as well as all institutions whose hard work led to today’s success."
In New Delhi, foreign ministry spokesman Arindam Bagchi said Islamabad, pressured by the global watchdog, has taken some steps against well-known terrorists — including those accused of the 2008 Mumbai terror attacks that killed more than 160 people.
Pakistan's Hafiz Saeed, whose charity Jamaat-ud-Dawa is believed to be a front for Lashker-e-Taiba militant group accused of the Mumbai attacks, was designated a terrorist by the U.S. Justice Department and has a $10 million bounty on his head. He is now serving multiple prison terms in Pakistan after being convicted in several cases last year.
Relations between Pakistan and India were strained after the attack on India’s financial hub. The rival South Asian powers have fought three wars since gaining independence from Britain in 1947.
“Pakistan must continue to take credible, verifiable, irreversible and sustained action and terrorist financing emanating from territories under its control,” Bagchi said.
The “gray list” is composed of countries with a high risk of money laundering and terrorism financing but which have formally committed to working with the task force to make changes.
The FATF is made up of 37 member countries, including the United States, and two regional groups, the Gulf Cooperation Council and the European Commission. Currently, only Iran and North Korea are fully blacklisted and refuse to cooperate with the FATF.
“We want to be seen as a responsible and active member of the international community that is well aware of its international obligations," said Pakistani Deputy Foreign Minister Hina Rabbani Khar, speaking from Paris.
She expressed hope that Friday's decision would “give a much-needed boost to our economy and increase our economic and financial engagement with the outside world.”
She described four years of broad legal and administrative reforms, streamlining systems and increased international cooperation to improve compliance with FATF rules, efforts that required “complete national consensus” across the political spectrum.
Pakistan has also struggled with militant attacks over the years. On Friday, a roadside bomb targeting a security forces' vehicle killed two officers and wounded three in the town of Qalat in restive southwestern Baluchistan province, according to the province’s top security official, Mir Zia Langu.
No one claimed responsibility for the bombing but Baluch separatists have been behind such attacks in the region in the past, seeking independence from Islamabad. Islamic militants also operate in the province.
Also Friday, troops killed four suspected militants in a raid on their hideout in the district of South Waziristan, in the northwestern Khyber Pakhtunkhwa province that borders Afghanistan, a military statement said.
Associated Press writers Angela Charlton in Paris and Ashok Sharma in New Delhi contributed to this report.