India engages US in plans to 'Grey-list' Pakistan at FATF session.

India is actively engaging with the US to garner support for placing Pakistan on the Financial Action Task Force (FATF) grey list. This move aims to pressure Pakistan to address concerns over terror financing and money laundering. The FATF listing could impact Pakistan's access to international financial systems and credibility.

Why in News?

Recently, Foreign secretary Vikram Misra who was on 3 - day visit to the US engaged the American officials regarding the upcoming FATF session, where India is expected to argue for Grey-listing Pakistan.

What is the Financial Action Task Force (FATF)?

About:

1. The FATF is an inter-governmental body that sets international standards seeking to prevent international financial crimes that aid terrorism.
2. It was established in July 1989 by a G-7 Summit in Paris, initially to examine and develop measures to combat money laundering.

Composition:

1. FATF members include 39 countries, including the United States, India, China, Saudi Arabia, Britain, Germany, France, and the EU as such.
2. India has been a member of the FATF since 2010.

Lists under FATF:

1. Grey List:

• Countries included in this list serves as a warning to the country that it may enter the blacklist.
• Countries in grey-list are Syria, Turkey, Nepal, Yemen, South Sudan etc.

2. Black List:

• Countries known as Non-Cooperative Countries or Territories (NCCTs) are put in the blacklist.
• These countries support terror funding and money laundering activities.
• Three countries-North Korea, Iran, and Myanmar, are currently on FATF’s blacklist.

Sessions:

1. The FATF Plenary is the decision-making body of the FATF.
2. It meets three times per year.

Consequences of being on the FATF blacklist:

1. No financial aid is given to them by the International Monetary Fund (IMF), the World Bank, the Asian Development Bank (ADB), and the European Union (EU).
2. They also face a number of international economic and financial restrictions and sanctions.

Source: The Hindu