If decisions are based on merit: Pakistan will be removed from FATF grey list

ISLAMABAD: As a three-day virtual meeting of the Financial Action Task Force (FATF) will begin today, February 22, during which the steps taken by Pakistan against money laundering and terror financing will be reviewed, Pakistani officials say that if decisions are based on merit, then the country's name will be likely removed from the FATF's grey list.

According to sources, Pakistan has submitted a detailed report on the implementation of the remaining six points that the FATF tasked the country with.

Back in October 2020, FATF had acknowledged that of the 27 conditions that were put forth to Pakistan, 21 had been fulfilled while six were left. At that time, FATF President Dr Marcus Pleyer had said that once the remaining six conditions are fulfilled, an "on-site visit" will be approved under which a team from the FATF will visit the country for the next review.

"Our discussions are confidential [...] the members decided by consensus that Pakistan needs to complete these six items for an onsite visit to be granted. "As soon as the plenary decides that Pakistan has completed all the 27 items, then an onsite visit will be made. After that, it will be decided whether the country will be allowed to exit the grey list or not," Dr Pleyer had said.

Pakistani officials have said that if Pakistan's implementation of the six points were to be reviewed by FATF solely based on merit, then the country's name would be removed from the grey list, which comprises countries without adequate control over terror financing.

Pakistani officials, however, maintain that if Western nations, along with the United States, want to increase pressure on Pakistan, then it will remain on the grey list but it cannot be placed on the black list.

In this regard, Turkey and Malaysia assured Pakistan that the country's name could not be placed on the black list without their votes. The decisions taken during the upcoming virtual meeting will be announced on February 25, 2021.

Pakistan was placed on the grey list by FATF in June 2018. In a statement issued after the plenary session concluded in October 2020, the anti-money laundering watchdog said that it had noted the significant progress that Pakistan had made on a number of action plan items.

“To date, Pakistan has made progress across all action plan items and has now largely addressed 21 of the 27 action items,” it said, adding: “As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan by February 2021.” The FATF recommended that Pakistan work on four areas to “address its strategic deficiencies:"

- Demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions.

- Demonstrating effective implementation of targeted financial sanctions against all 1,267 and 1,373 designated terrorists and those acting for or on their behalf, preventing the raising and moving of funds including in relation to NPOs (non-profit organisations), identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services

- Demonstrating enforcement against TFS (terror financing sanctions) violations, including in relation to NPOs, of administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases.