Pakistan makes a lot of progress on FATF front

ISLAMABAD: Pakistan has made a lot of progress on the FATF front in the last two years and implemented 26 points out of a total of 27 action plan, however, Islamabad is kept at the grey list.

According to background discussions, Pakistan conducted six national level risk assessments on money laundering and terrorist financing as per FATF requirements. Pakistan formulated a risk-based strategy and a detailed roadmap to address the concerns of FATF. There were 11 working groups with representation from all key stakeholders formed to ensure compliance.

The regulatory and supervisory frameworks were formulated for high-risk sectors. Institutional capacity improved by ensuring extensive outreach/capacity building. A national-level half yearly outreach plan by the FATF team was designed.

There is a dedicated staff and a budget of Rs536 million was sanctioned for FIA to deal with FATF requirements. A standalone Mutual Legal Assistance Act (MLA) was enacted and guidelines and directives on MLA issued by Ministry of Interior and Nacta. Pakistan signed various MoUs with international counterparts to ensure cooperation. The government established International Cooperation Cell with 22 officers at Ministry of Interior.

The MLA case management software was developed to manage the MLA requests. There was 93 percent increase in international requests sent to foreign jurisdictions. Nine new MoUs were signed by the FMU with international counterparts.

Pakistan’s response time to international cooperation requests improved from 11 months to one month. Supervisory mechanism for Pak Post, CDNS and DNFBPs was established. Rules, regulations and regulatory mechanism was put in place for effective AML/CFT compliance of unregulated sector. CDNS data and record was completely digitised, and all 376 branches connected with live monitoring in place.

Pakistan financial sector regulatory framework was aligned with international best practices. Pak Post Life insurance company was established under regulatory framework of the SECP. All financial institutions upgraded digital screening solution.

Numerous outreach sessions held to enhance understanding of terror financing and money laundering risks to financial sector. Pakistan undertook key initiatives to prevent the misuse of legal persons and legal arrangements. Legal amendments introduced to obtain and maintain ultimate beneficial ownership information.

The SECP established a centralised Supervision Division with additional 31 HR for Companies and LLPs. HR increased by 35 percent at an average to deal with provincial cooperatives, trusts and Waqfs. Effective, proportionate and dissuasive sanctions for all types of legal persons and arrangements were successfully initiated.

Pakistan conducted country-wide outreach sessions for companies, LLPs, Waqfs, trusts and cooperatives to ensure understanding. A centralised online registration portal for Waqf, Trust and cooperatives was made operational. Pakistan has ensured the public availability of basic information of all legal persons and legal arrangements. It ensured easy and timely access of basic and beneficial ownership information of all Waqf, trust and cooperatives for LEAs.

The domestic information sharing on beneficial ownership has increased significantly. SOPs for processing financial intelligence were developed and implemented by all LEAs. Guidelines for the utilisation of financial intelligence by the LEAs were issued by the FMU.

The investigations are linked to different high risk predicate crimes such as corruption, tax evasion, hawala, fraud, ML, TF. Rs5,824.78 million were seized based on the financial intelligence disseminated by the FMU, and Rs1,350 million confiscated based on the financial intelligence disseminated by the FMU.