FIA submits report to PM on FATF visit

ISLAMABAD: The Federal Investigation Agency (FIA) has spilled the beans while admitting the fact that due to non-serious approach of the departments concerned towards countering money laundering and terror financing, Pakistan may not be in a position to satisfy the Asia Pacific Group (APG) of Financial Action Task Force (FATF), The News has learnt.

The FIA has in black and white informed the prime minister that due to poor response of the departments concerned to APG, the situation is not satisfactory for Pakistan, currently facing the threat of being pushed into the black list category from the grey of the FATF, the report reads.

This special report, prepared after the visit of APG delegation, has identified weaker areas of various departments and identified immediate and long term measures for improvement. “Pakistan faces an uphill task to satisfy the Asia Pacific Group inspectors who visited Islamabad to analyse and comment on anti-money laundering/counter terrorism financing efforts,” reads the special report of the FIA sent to PM, a couple of days back. The situation is not satisfactory and this report of APG will become the basis of future decision of FATF, it observed.

The report further highlighted weak areas of departments like FIA, Federal Monitoring Unit (FMU) of State Bank of Pakistan, National Accountability Bureau (NAB) etc. According to the FIA report, the earlier report on Risk Assessment of Pakistan written and shared in 2017 was not taken seriously by departments concerned as well as no concerted and fruitful effort was made to address FATF’s concerns.

As a result of poor preparation, the replies to questions of inspectors based on that report were usually found weak, observed in the report, adding, the APG inspectors have taken notice of the situation.

Furthermore, the report highlighted failure on the part of state institutions for snail’s pace progress on extradition treaties as well as mutual legal assistance treaties despite provision in laws. “This could be interpreted as official 'lack of will'. This will not augur well for Pakistan in final assessment,” observed in the report.

The report also observed that referral mechanism of FMU to civilian law enforcement agencies has been found to be inapt and below par. “The FMU is not seen as a vibrant, observant and proactive arm of the state.”

A centralised body to monitor real estate, tele-banking, auto trade as nodes for irregular cash transfers has been identified as missing, it further noted. The FIA report further admitted the fact of poor prosecution and capacity to get accused convicted in anti-money

laundering cases. “The inspectors also viewed with great concern the low convictions and seizures in AML cases.” After assessing the key areas of concerns, the report has recommended to the PM to immediately establish a task force for the purpose to serve as the steering committee to streamline the working of FMU and all Law Enforcement Agencies (LEAs) for bridging the huge gap of non-cooperation which might cost the nation dearly.

It also suggested for taking immediate steps to equip the FMU, a key component to deal with terror financing, on modern grounds. “The State Bank of Pakistan has to ensure that no Suspicious Transaction Report (STR) is unreported and non-cooperative commercial banks vis-à-vis STRs must be penalised,” it observed, adding, the quality of STRs, currently based on artificial intelligence and search parameters given to the super computer, needs to be improved with the input from FIA and all LEAs.

The inter-agency coordination has to be made the cornerstone of AML & CTF effort, it further suggested, adding, level of coordination between FMU and LEAs needs to be unfettered and exemplary.

Agencies like FIA, NAB and police departments have to come up with successful seizures and convictions that stand in the court, it stated, adding, nothing short of court conviction should be reported to the government.