By Asif Shahzad
ISLAMABAD (Reuters) - Pakistan has been given a three-month reprieve by a global watchdog over a U.S.-led motion to put the South Asian country on a terrorist financing watchlist, Pakistan's Foreign Minister Khawaja Asif said late on Tuesday.
Pakistan has been scrambling in recent months to avoid being added to a list of countries deemed non-compliant with anti-money laundering and terrorist financing regulations by the Financial Action Task Force (FATF), a measure that officials fear could hurt its economy.
FATF member states have been meeting this week in Paris, where it was expected that they would decide on a U.S. motion, backed by Britain, France and Germany, to have Pakistan added to the so-called "grey list" of countries which are not doing enough to comply with terrorist-funding regulations.
Asif, who is currently on a visit to Russia, tweeted late on Tuesday that Pakistan's "efforts have paid (off)" during a Feb. 20 meeting on the U.S.-led motion, suggesting there was "no consensus for nominating Pakistan".
He also suggested the meeting proposed a "three months pause" and asked for the Asia Pacific Group, which is part of FATF, to consider "another report in June".
In Washington, a State Department official, speaking on condition of anonymity, could not confirm that FATF deferred action for three months, pointing out that the organization’s deliberations are confidential until it makes them public.
The international community continues to have concerns about deficiencies in Pakistan’s anti-money laundering and counter-terrorism financing system even though Islamabad has begun taking steps to address the flaws, said the State Department official without elaborating.
Pakistan earlier this year submitted a report about the progress it had made in curbing terrorist financing, but Washington submitted its motion before the Pakistan report could be discussed at the Paris hearing.
"Grateful to friends who helped," Asif added.
Two other Pakistani officials confirmed Pakistan had received a reprieve of three months.
Washington has been threatening to get tough with Islamabad over its alleged ties with Islamist militants, and last month President Donald Trump’s administration suspended aid worth about $2 billion. [nL1N1OZ1QC]
Islamabad, which denies assisting militants in Afghanistan and India, has reacted angrily to U.S. threats of further punitive measures.
However, Pakistan's government is concerned the FATF decision could hurt its banking sector, causing financial pain to the economy just as a national election looms. [nL8N1Q53MW]
(Writing by Drazen Jorgic. Additional reporting by Jonathan Landay in Washington; Editing by Gareth Jones and Lisa Shumaker)