Another FATF review will be due soon. Pakistan has been in the grey list long and has not been able to get out of it despite efforts it has been making for a couple of years now. To comply with the remaining three of the 27 benchmarks set by the Financial Action Task Force (FATF), the government is planning to introduce new rules, which ideally should have been put in place earlier. The required rules are about the provisions of forfeiture, management and auction of properties and assets related to anti-money laundering (AML) cases. Then there are some additional points that need to be covered as well, such as transfer of investigation and prosecution of AML cases from police and provincial anti-corruption establishments (ACEs) to special agencies. The FATF has been urging the government of Pakistan to approve these rules so that more stringent actions can be taken against those who are involved in financial transactions that help and support terrorism.
The fact that Pakistan has met most of the benchmarks does not reduce the importance of the remaining points mentioned above. The unmet benchmarks include ensuring that investigations identify persons acting on behalf of banned entities. The FATF believes that there are actors who may not be directly involved in terrorist activities but may be facilitating those outfits which are under the radar of the FATF. Pakistan is now in dire need to demonstrate that anti-terrorism sanctions are effective and are actually targeting the banned entities by closing all avenues available to them for any financial transactions under any disguise. Though Pakistan has actively worked on several initiatives to comply with the FATF, the remaining points need to be met early so that the country can demonstrate incontrovertibly that there is an improved rules-based framework in place to enhance effectiveness of AML and combating financial terror (CFT) systems.
In addition to such systems, Pakistan is in need of developing improved investigation procedures to detect terrorism funding and handling the deficiencies in AML/ CTF restrictions. In the past nine months, Pakistan has passed three significant laws including the Anti-Terrorism (Amendment) Act 2020, AML (Second Amendment) Act 2020, and ICT Waqf Properties Act. The acts were passed despite opposition and do have some value of significance. Pakistan’s long stay in the grey list and the persistent sword of the black list hanging over the country is not a good sign for the economy and is detrimental for its international standing too. Pakistan makes efforts but the FATF insists on handing more suggestions, and then again there are more efforts and reviews – and this has been going on for a bit too long now. There is hope that the efforts by Pakistan will gain some traction from the FATF; real success on this front can come only when the country is off the grey list and back on the white list. It is creditable that Pakistan has worked to come closer to achieving this task despite the fact that there are countries in the world with powerful economies which would like to see it on the black list.