New Delhi: India will make a strong case to put Pakistan back on the Financial Action Task Force ‘grey list’ at its next meeting in June and highlight Islamabad’s failure to comply with anti-money laundering and terror financing rules. India will also oppose a World Bank funding plan for Pakistan, which is also scheduled for discussion in June, a source said, adding Islamabad had used funds from multilateral agencies to buy arms.
The source said India will present a dossier to the watchdog detailing how Pakistan had failed to comply with the rules. Against the backdrop of escalating tensions between India and Pakistan post the Pahalgam massacre, New Delhi has mounted a global offensive against Pakistan, which it has accused of backing terrorists.
After Pakistan was placed in the FATF ‘grey list’ in 2018, it had promised to submit an action plan to curb money laundering and terror financing. It had also talked about enacting a law, which it has failed to do so far. In Oct 2022, FATF had announced that Pakistan had been removed from its ‘grey list’ as it had largely completed its action plans.
Removal from the ‘grey list’ enables a country to have greater access to foreign loans and aid. When FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring and this is referred to as the ‘grey list’.
The World Bank is expected to review a $20 billion funding for Pakistan under the 10-year country partnership framework that was announced in Jan this year.
Earlier this month, India had strongly objected to IMF, which approved a $2.3 billion loan to Pakistan under the extended fund facility lending programme ($1 billion) and a fresh resilience and sustainability facility lending plan of $1.3 billion.
IMF defends bailout package
The IMF, meanwhile, has defended the bailout package to Pakistan, saying the debt-ridden country "met all the required targets" to receive the latest loan instalment. The IMF released the funding when Pakistan was busy with arbitrary firing on India after the Indian military launched Operation Sindoor.
The IMF's justification comes days after India asked it to reconsider its $2.1 billion bailout to Pakistan as it allows terrorists to use its soil for launching state-sponsored attacks against Indian citizens. Defence Minister Rajnath Singh last week said that the aid to Pakistan is a "form of indirect funding to terror."