Finanlly, Terroristan placed on FATF watchlist, what are consequences?

stew98

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Pakistan placed on FATF 'grey list' despite diplomatic efforts to avert decision


The Financial Action Task Force (FATF) on Wednesday officially placed Pakistan on its grey list after a plenary meeting in Paris.

The announcement was made late on Wednesday night. Despite Pakistan's diplomatic efforts to avert the decision, the financial watchdog, in its meeting, argued that Pakistan had failed to curb terror financing on its soil.

Also read: Pakistan deserves international support, not a place on the FATF grey-list

Earlier in the day, caretaker Finance Minister Dr Shamshad Akhtar had urged the FATF to remove Pakistan from its grey list. As the FATF plenary began its proceedings, the Pakistani delegation apprised the watchdog of steps Islamabad had taken to weed out money laundering and terror financing.

Take a look: SECP issues anti-money laundering regulations in compliance with FATF recommendations

Earlier, reports from Paris had indicated that Pakistan may get more time to take measures to implement the FATF’s anti-money laundering and terrorist-financing regulations.

The Foreign Office (FO) had confirmed in February that Pakistan would be placed on FATF's grey list in June if it did not take measures to curb terror financing.

However, FO spokesperson Mohammad Faisal had assured that an action plan to eradicate terrorist financing was being prepared and would accordingly be shared with the international body.

"Pakistan will be assigned to the ‘grey list’ in June, once an action plan has been mutually negotiated," the spokesman had said, adding that Pakistan will cooperate with FATF in every possible way.

Explore: Alone at FATF

A 37-nation FATF plenary held its first meeting on Pakistan in February where China, Turkey and Saudi Arabia opposed the United States-led move to place Pakistan on the watchlist. But the US pushed for an unprecedented second discussion on Pakistan, held on February 22.

By then, Washington had convinced Riyadh to give up its support to Pakistan in return for a full FATF membership. This left only two – China and Turkey – in the Pakistan camp, one less than the required number of three members to stall a move.

At this stage, the Chinese informed Islamabad that they were opting out as they did not want to “lose face by supporting a move that’s doomed to fail”, an official source had told Dawn. “Pakistan appreciated the Chinese position and conveyed its gratitude to Turkey for continuing to support Islamabad against all odds,” the source added.
 

stew98

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FATF grey-listing to raise cost of doing business

KARACHI: Pakistan’s enlistment in the grey list of watchdogs did not show its impact immediately but bankers said the cost of doing business would get higher and the situation for banks would become more difficult than it was during 2012-15.

Pakistan was placed on the Financial Action Task Force (FATF) ‘grey list’ on June 27, indicating that the country failed to put in place measures to prevent money laundering and other illegal transactions that may be used for financing terrorism.

While banks believe the impact would be felt soon and the cost of doing business would become higher, the immediate effect on exchange rate was not significant.

“Cost of doing business will be higher due to this grey list but it is manageable for banks with some difficulties,” Hussain Lawai, a seasoned banker, told Dawn. “Remember we were in the watch list from 2012-2015 but we managed to continue doing business,” he added.

However, there is a difference this time in that the country’s large banks like Habib Bank, United Bank and National Bank are not working as correspondent banking channels. These were operating during 2012-2015 which helped trading and banking to run smoothly.

With the grey list, large banks like JPMorgan Chase, Citibank and others will suspend credit lines which mean they would not accept letter of credits (LCs),” said Mr. Lawai.

Now the opening of LCs to some extent would be difficult, but still manageable, he added.

Pakistani banks find it very difficult to operate under the current laws and regulations in countries like the US. Last year, Habib Bank had to pay a penalty of $225 million to the Department of Financial Services (DFS) of New York State for violating multiple state regulations and also had to unwind its operations there.

Analysts were anticipating the impact on exchange rate in case of Pakistan’s enlistment in the grey list but the currency market did not show any significant impact despite the fact that the exchange rate is already under pressure due to depleting reserves of State Bank and widening current account deficit.

The currency dealers in the interbank market said there was no change as the dollar remained at the same level of Rs121.50.

“The dollar which has lost during this week about Rs1.5 gained the same on the last day of business (Friday),” said general secretary Exchange Companies Association of Pakistan Zafar Paracha.

Currency dealers in the open market believe that the banks would face the first impact of grey list that would be reflected in the open market.

“The effect of grey list may come later but there is no impact of tax on illegal foreign assets and cash under amnesty scheme as the taxed amount (if any) is not visible in the country’s balance sheet,” said Paracha.

Published in Dawn, June 30th, 2018
 

The Ultranationalist

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Not much. if a bank downgrades a whore's or a beggars's credit rating then what difference will it make? porkistan will continue to go around whoring and begging.
 

stew98

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For China, CPEC is not economic project, but strategic one. Because, most of the Chines industries are located at East cost of china. CPEC route will be too costly for transportation as compare to sea route. It only help to transfer goods like petroleum to the most backward region of China and to transport textile from that region. China main goal is to have alternative route, if situation in South China get worsen in next 2-3 decades. That's why China want control CPEC route. Otherwise economically CPEC is not viable.
As Pakistan and pimp china get closer to completing CPEC expect them to be on the black
list and getting lot tougher actions from the west
 

Raweg

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Not much. if a bank downgrades a whore's or a beggars's credit rating then what difference will it make? porkistan will continue to go around whoring and begging.
Downgrading and gray list will increase interest rate for all future loans.....so now on they will get loan at highest interest rate in world and majority of there loan is short term so they will need renewed one very fast ;)
 
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For China, CPEC is not economic project, but strategic one. Because, most of the Chines industries are located at East cost of china. CPEC route will be too costly for transportation as compare to sea route. It only help to transfer goods like petroleum to the most backward region of China and to transport textile from that region. China main goal is to have alternative route, if situation in South China get worsen in next 2-3 decades. That's why China want control CPEC route. Otherwise economically CPEC is not viable.
CPEC is not going to be a viable alternative in a conflict this will be targeted and made useless very fast


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stew98

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It's not just CPEC, but BRI as whole is an escape plan. Cause right now they only one transport corridor that is bottlenecked at Malacca Strait and South China sea. Current Chines activities has raised many eyebrows. Not to forget it is contested by many countries Currently, in future these countries are bounds to join hands with US. And right now, Chines navy is no par with US Navy, it'll take at least 2-3 decades if not more. So if need arise and if situation in South China sea goes south, then they'll have BRI for sustenance.
CPEC is not going to be a viable alternative in a conflict this will be targeted and made useless very fast


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If anyone understands Pak's economic situation, they would understand that Pak has huge CAD and enable keep up their forex numbers...

Though there are many sources(for Pak) of forex, remittance sent by non residential paki is huge compared to other sources.

Grey list doesn't impact remittance sent to Pak and we all know about Pak's export status. So IMHO this grey listing is hardly more than a bee sting(for Pak economy).

Thus I rest my case.
 

stew98

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It is, but it can only sustain up to the point, nobody would like to step in sinking ship. And you are underestimating terroristan's capacity to gobble dollar. Let me tell in last 10 month they took $10b loan, and now their reserves are under $10B. Earlier they had around $16B reserves. Now think in around 10 months they eaten up $10b loan + $ $6B of their artificial reserves. Further by Dec,18 they have to pay $5b in debt servicing.

I would say, have trust in Terroristans intelligence. :):)

If anyone understands Pak's economic situation, they would understand that Pak has huge CAD and enable keep up their forex numbers...

Though there are many sources(for Pak) of forex, remittance sent by non residential paki is huge compared to other sources.

Grey list doesn't impact remittance sent to Pak and we all know about Pak's export status. So IMHO this grey listing is hardly more than a bee sting(for Pak economy).

Thus I rest my case.
 
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It's not just CPEC, but BRI as whole is an escape plan. Cause right now they only one transport corridor that is bottlenecked at Malacca Strait and South China sea. Current Chines activities has raised many eyebrows. Not to forget it is contested by many countries Currently, in future these countries are bounds to join hands with US. And right now, Chines navy is no par with US Navy, it'll take at least 2-3 decades if not more. So if need arise and if situation in South China sea goes south, then they'll have BRI for sustenance.
What makes you think China will catch up to US inavy in 20-30 years ? China is not even a blue water navy . China has not fought any wars beyond its shores. US navy has fought wars for more than 200 years beyond its shores. You are greatly overestimating China. It maybe a threat to India but to think it can challenge US navy and US navy will not have advanced in 20-30 years is a very naive view.. Strongest navy in south China seas is currently Japanese navy even with q pacifist constitution Military supremacy will always remain a top priority for America.

http://nationalinterest.org/blog/the-buzz/why-japans-navy-the-best-asia-not-china-24201
 
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Pandeyji

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Not much. if a bank downgrades a whore's or a beggars's credit rating then what difference will it make? porkistan will continue to go around whoring and begging.
Downgrading and gray list will increase interest rate for all future loans.....so now on they will get loan at highest interest rate in world and majority of there loan is short term so they will need renewed one very fast ;)
There is more to the story. Pakistan has got 15 months (it is important, pay attention) to comply with a 26-point program failing which will land them in Blacklist. And once in blacklist they wouldn't be allowed to even receive remittances from overseas Paki nationals, let alone any loans or aids (intended). So it is a very dangerous predicament for them.

Now on to 15 months. Notice how specific the timing is. 15 months. No less, no more. Why? Simple. They are actually waiting & watching how events unfold. If NDA is ousted in 2019, be sure that Pakistan wouldn't go in blacklist (they would be removed from greylist too). If not, they would be under sanctions much before the 15 months. Just wait & see.
 

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