Following last year’s FATF decision, the EU has removed Pakistan from a list of countries at high risk for money laundering and terror financing after five years. This means better and open trade within the union and fewer obstacles in legal and financial transactions with those operating in Pakistan. The Ministry of Commerce is confident in the move to make legal and financial transactions easier by reducing time and costs.
Since the FATF’s removal of Pakistan from the increased monitoring list, a sustained effort and commitment to betterment was highlighted in the international arena. The UK’s recognition following the removal, and now the EU’s, opens and encourages a move toward better trading and exporting relations with the region. While this decision may have been a natural effect of the FATF removal, the positive diplomacy of the foreign office and minister must still be credited for this development and the momentum of the good news must be carried forward. Being on the list indicated a perception of weak legal and regulatory mechanisms to keep financial crime in check.
This news is also an important breather from the economic crisis at hand but may not be insulated from it. There is a severe lack of economic activity in the country and an inability of wages to compete with price pressures has made markets unaffordable. The incomplete IMF talks left unconcluded have effectively restricted our international borrowing capabilities. Hopefully, renowned confidence in Pakistan’s ability to prevent financial crimes and terrorist financing can help ease this restriction. With all the positives, trade should see a boost, and we must make active commitments toward this goal. If anything, a reputational boost will help improve sentiments around the issue. We can also expect it to positively influence foreign direct investments, a lack of which is a glaring issue for the country.