Pakistan must comply with 13 points to come out of FATF grey list

ISLAMABAD: Pakistan will have to comply with remaining crucial 13 points till June 2020, including prosecution and conviction of banned outfits and proscribed persons, for which the list already provided to Islamabad in order to come out of grey list of Financial Action Task Force (FATF).

The details of remaining 13 points of action plan exclusively available with The News disclosed that Pakistan will have to submit progress report on crucial points within next couple of months and progress on these points can pave the way for coming out from grey list. If progress is not made then the dream of coming out from grey list will not be materialised.

Out of 27 points action plan given by FATF, it had declared Pakistan fully compliant on 14 points and now there was new deadline of June 2020 for complying on remaining 13 points in a bid to ensure exit from the grey list of watchdog combating money laundering and terror financing around the globe known as FATF.

“Practically, Pakistan has limited timeframe to comply with remaining 13 crucial conditions as the country will have to submit its progress report to joint working group (JWG) of FATF till April 15, 2020. There is only one month left for making progress on important remaining points to demonstrate that Islamabad is seriously moving towards implementation on FATF conditions,” top official sources told The News here on Sunday. Then face to face meeting is expected to take place in second week of May 2020 probably at Bangkok where Pakistan will have an opportunity to defend itsprogress report. Finally the FATF’s plenary session is expected to meet in Paris in first week of June 2020 for deciding the fate of the country over the grey list.

According to the list of remaining 13 points of 27 action plan (1) Pakistan will have to demonstrate effectiveness of sanctions including remedial actions to curb terrorist financing in the country; (2) Pakistan will have to ensure improved effectiveness for terror financing of financial institutions with particular to banned outfits; (3) Pakistan will have to take actions against illegal Money or Value Transfer Services (MVTS) such as Hundi-Hawala; (4) Pakistan will have to place sanction regime against cash couriers; (5) Pakistan will have to ensure logical conclusion from ongoing terror financing investigation of law enforcing agencies (LEAs) against banned outfits and proscribed persons; (6) Pakistani authorities will have to ensure international cooperation based investigations and convictions against banned organisations (list provided to Pakistan) and proscribed persons (list provided to Pakistan); (7) The country will have to place effective domestic cooperation between Financial Monitoring Unit (FMU) and LEAs in investigation of terror financing; (8) Prosecution of banned outfits and proscribed persons (list provided to Pakistan); (9) Demonstrate convictions from court of law of banned outfits and proscribed persons (list provided to Pakistan); (10) Seizure of properties of banned outfits and proscribed persons (list provided to Pakistan); (11) Conversion of madrassas to schools and health units into official formations (list provided to Pakistan); (12) To cut off funding of banned outfits and proscribed persons; and (13) Pakistan will have to place permanent mechanism for management of properties and assets owned by the banned outfits and proscribed persons (list provided to Pakistan).

The FATF had already declared Pakistan fully compliant on 14 points out of total 27. The FATF had given 27 points action plan in June 2018 when it placed Islamabad into grey list.

In October 2019 plenary meeting, Pakistan was declared fully compliant on five points which are (1) understanding risks of counter financing terrorist (CFT) by the financial sector; (2) outreach sessions of Anti Money Laundering (AML) and CFT for the financial institutions; (3) developing an integrated database at airports; (4) mechanism to publicise designated persons and entities; and (5) Terrorist Financing (TF) specific units and analysis done by Financial Monitoring Unit (FMU) and State Bank of Pakistan (SBP).

The FATF plenary in February 2020 found Pakistan compliant on 9 points of remaining points of action so Pakistan declared compliant on 14 points of total 27 points action. The FATF had found Pakistan compliant on (1) audit of financial institutions by the State Bank of Pakistan (2) Suspicious Transaction Reports (STRs) disseminations and analysis done by FMU (3) terror financing risk assessment and its implementation (4) inter-coordination mechanism of federal & provincial departments (5) parallel investigations by Counter Terrorism Departments (CTDs (6) risk assessment of cash smuggling (7) implementation of domestic cooperation to counter cash smuggling (8) understanding TF by the judiciary through conducting awareness and training session (9) risk based outreach of Designated Non-Banking Financial Institutions (DNBFI) and Non Profit Organizations (NPOs).