FATF extension

As an expected relief under the corona crisis, the Financial Action Task Force (FATF) has extended the deadline for Pakistan to achieve all 27 points of its action plan till October 2020. This extension is a much-needed relief for Pakistan as the country is struggling to contain the spread of the coronavirus. In a lockdown situation, it can hardly be expected of the Pakistani authorities to concentrate on anything else other than the crisis itself. The fulfilment of the remaining points of the action plan requires coordination and negotiations at various levels of the government machinery and financial institutions across the country, which are mostly closed or working with only skeleton staff at the moment. Though the government has already passed some legislation to prevent the illegal outflow of the foreign exchange from Pakistan, still there are points to be met in the coming months. Now it has become impossible for anyone to take more than $10, 000 out of the country without prior approval from the State Bank.

Pakistan has also been successful in freezing the accounts of various banned organizations and convicted individuals related to them, but the FATF has been demanding severe action against more outfits that it considers detrimental to world peace and likely to resort to terrorism if further action is not taken. The same applies to individuals whose detailed lists have been shared with the government of Pakistan for their arrest, conviction, and punishments. This is perhaps the weakest area of performance from the Pakistan side as the police fail to collect incriminating evidence against such individuals and as a result the courts cannot convict those against whom sufficient evidence has not been collected or produced. Take for example the recent case of Omar Sheikh who was involved in the murder of Daniel Pearl but a strong case could not be established against him to keep him behind the bars.

The government had to act and imprison him immediately after the court verdict. Now, this extension by the FATF is a godsend opportunity for Pakistan to expedite the process of compliance to the action plan. This six-month reprieve should not be squandered and even in the time of lockdown, the concerned authorities and officials must continue their work with various departments and ministries through emails, phones, and video-link. Now Pakistan has to comply with all 27 points by October instead of April 30, and this time will pass quicker than imagined. We can’t afford to show any laxity in this matter, as after the expiry of this extension it is highly unlikely that another extension is granted to Pakistan. Our inability to comply by then may result in stringent measures by the FATF that will further affect our economy which is already teetering on the brink.