Explained | What is the FATF and why is Pakistan on its ‘grey list’?

The story so far: Ahead of the plenary session of the Financial Action Task Force, the global financial crime watchdog, from June 14 to 17 in Berlin, Pakistan which continues to face an economic crunch, is hoping for some respite in the form of its removal from the FATF’s ‘grey list’ or the list of countries presenting a risk to the global financial system. While the words ‘grey’ and ‘black’ list do not exist in the official FATF lexicon, they designate countries that need to work on complying with FATF directives and those who are non-compliant, respectively. Pakistan was retained on the grey list in March as it was yet to address concerns on the front of terror financing investigations and prosecutions targeting senior leaders and commanders of UN designated terrorist groups. Pakistan has found itself on the grey list frequently since 2008, for weaknesses in fighting terror financing and money laundering.