Asia Pacific Group on ML: Pakistan compliant or largely compliant on 35 recommendations

ISLAMABAD: The Asia Pacific Group, a regional body of Financial Action Task Force (FATF), has found Pakistan compliant or largely compliant on 35 out of total 40 recommendations to combat money laundering.

According to a statement issued by the Ministry of Finance on Friday, the Asia Pacific Group (APG) on Money Laundering has published the results of Pakistan’s third Mutual Evaluation follow-up report on 12 August 2021.

As per the report, Pakistan has achieved compliant/largely compliant rating in four more recommendations leading aggregate to 35/40 recommendations rated as Compliant (C) or Largely Compliant (LC).

Pakistan is now in the top tier of countries that have achieved a rating of C/LC for over 35 of the 40 FATF recommendations. Moreover, Pakistan has also achieved the rating of Largely Compliance/ Compliance in all Big Six Recommendations of the FATF, which includes R.3 (Money laundering offence), R.5 (Terrorist Financing Offence), R.6 (Targeted financial sanctions related to terrorism & terrorist financing), R.10 (Customer due diligence), R.11 (Record keeping) and R.20 (Reporting of suspicious transactions). The Financial Monitoring Unit (FMU) of Pakistan led the whole process of Pakistan’s Mutual Evaluation cycle and defended the ratings during their discussions in the Mutual Evaluation Committee Meetings of APG.

After this upgrade, Pakistan is well placed in technical compliance in comparison to many of the countries. For example, if Pakistan’s position is compared against G20 countries, then Pakistan is on 4th after Italy (38), Saudi Arabia (38) and UK (38).

Pakistan would continue this momentum in addressing the remaining gaps identified in the Mutual Evaluation Report-2019 and would seek upgrades in remaining five recommendations, in the fourth Follow-up Report.

Pakistan’s MER was adopted in August 2019 in which Pakistan was rated compliant and largely complaint in 10 out of 40 FATF Recommendations for the Technical Compliance. Pakistan carried out major legal reforms with the enactment of 17 laws along with relevant rules and regulations. These laws not only strengthened the systems in Pakistan but also brought in sustainability.