Pakistan has been on the ‘Grey List’ of the Financial Action Task Force (FATF) – the international money laundering and terror-financing watchdog. Pakistan’s engagement with the task force is not new, the country faced FATF indictments during 2008 and 2012 to 2015. Despite Pakistan’s efforts to curb AML for CFT and huge diplomatic commitments, the task force retained Pakistan on the ‘Grey List’ on account of its Risk Profile. Though other countries get clearance after fulfilling 80 percent compliance but Pakistan has been pressurized for a hundred percent compliance with the action plan. There are severe drawbacks for being remained in the grey list for banking system, export and imports, remittances, international lending and foreign investments but the most severe would be its dropping into blacklist. The September, 2020 Legislation would help gathering diplomatic support in the forthcoming settings. The supportive role-played so for by China, Turkey, Malaysia at the task force has worked in averting Pakistan from blacklisting. Therefore, the study suggests that powerful diplomacy can break the FATF clutches and get Pakistan out of the ‘strategic deficiencies list’ or grey list. Explorative, historical and analytical conclusions have been brought in content analysis format.
The Role of Regulatory Arbitrage in U.S. Banks' International Lending Flows: Bank-Level Evidence
