As the Financial Action Task Force (FATF) placed Iran on its blacklist for “failing to comply with international anti-terrorism financing norms”, across the border Pakistan was given a reprieve. The body maintained Pakistan’s status on its ‘grey list’ of countries with inadequate control over curbing money laundering and terrorism financing until June, when the next review will take place. Just like the aptly named grey list Pakistan continues to operate in the grey area, not completely satisfying the financial watchdog, yet continuing to make “significant progress” in each review.

Pakistan can take these comments, as well as the extension of the deadline for another four months, as vindication of its policies and proof that its efforts to curb terror financing are not going unnoticed. FATF at its core is a political organization; its members are drawn from various countries, all of whom have their own axes to grind with subject nations under review. Pakistan has to content with a hostile Indian presence in FATF and an antagonistic US representation too, yet despite this opposition, Pakistan has continued to avoid the “black list” and work towards getting off the “grey list” as well. Considering the current trajectory, and the committed support of allies such as China and Turkey, Pakistan will soon have filled all the regulatory loopholes and be on the way to normal financial dealings.

Considering this political nature of FATF, the improving relationship with the US and an impending peace deal in Afghanistan will also play a role in Pakistan’s favorable placement. Pakistan should continue facilitating peace in Afghanistan – we are at the cusp of an agreement.

In the meanwhile Pakistan should continue to fix its regulatory framework to match international standards. Despite politics, if Pakistan’s regulations are airtight, FATF will have no choice but to return Pakistan to its normal rating.