Grey list: FATF asks Pakistan to swiftly complete action plan

ISLAMABAD: Pakistan has foiled Indian attempts to get it into the FATF’s black list from the existing grey list; however, the international watchdog urged it to swiftly complete its action plan, particularly those with timelines of May 2019.

“The FATF Board reviewed the progress made by Pakistan in strengthening its laws and system related to curbing money laundering particularly terror related financial flows and maintained its current status despite hectic efforts and lobbying to get us blacklisted,” Federal Minister for Finance Asad Umar tweeted after completion of FATF meeting held at Paris on Friday.

The Finance Ministry on Friday announced that the meetings of Financial Action Task Force (FATF) took place at the OECD, Paris, from February 17-22, 2019 to review a number of countries compliance of the international standards on Anti-Money Laundering and Counter Financing of Terrorism (AML-CFT).

Pakistan was earlier placed by the FATF in its Ongoing Compliance Document in view of an Action Plan undertaken by it to strengthen its CFT Regime. The FATF reviewed the progress made by Pakistani authorities concerned with the CFT role, based upon an analysis carried out by the Asia-Pacific Joint Group.

The FATF noted that Pakistan had taken several steps to implement the Action Plan including undertaking Risk Assessment of Terrorism Financing and Cash Smuggling in the country. The FATF advised Pakistan to take further actions that include detailed assessment of TF Risk, strengthening of AML/CFT supervisory measures by the regulatory authorities, financial inquiries and investigations into terrorist funding activities and promotion of awareness among the citizens on CFT measures and controls.

The FATF will undertake the next review of Pakistan’s progress in June 2019 which will be preceded by Face-to-Face meeting with the Joint Group in May 2019.

The FATF in its statement argued that since June 2018, when Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counter-terrorist financing-related deficiencies, Pakistan had taken steps towards improving its AML/CFT regime, including by operationalizing the integrated database for its currency declaration regime.

Pakistan has revised its TF risk assessment; however, it does not demonstrate a proper understanding of the TF risks posed by Daesh, AQ, JuD, FiF, LeT, JeM, HQN, and persons affiliated with the Taliban.

Pakistan should continue to work on implementing its action plan to address its strategic deficiencies. “Given the limited progress on action plan items due in January 2019, the FATF urges Pakistan to swiftly complete its action plan, particularly those with timelines of May 2019,” the FATF stated.

However, the official sources said Pakistan had done all requirements given for January 2019 and the joint working group refused to accept Indian argument for placing Pakistan in the blacklist on immediate basis.

The FATF review can place Pakistan into the blacklist in next two reviews going to take place in May and September 2019 but in case of making satisfactory progress Pakistan could come out from grey list after September 2019.

“Now we will have to improve our Terror Financing Risk Assessment (TFRA) further to comply with upcoming reviews in May and September 2019,” said the official. “We convinced the FATF, APG, ICRG, USA and UK as well as our friendly countries that Pakistan has given its potential commitment to meet the Action Plan and will continue to make efforts to meet all timelines. They agreed to our commitment and thus Indian efforts met with failure,” concluded the official.