Monday November 29, 2021

Pakistan stays on FATF grey list

Despite complying with four out of seven points combined action plans, the Financial Action Task Force (FATF) has kept Pakistan on the grey list.

October 22, 2021

ISLAMABAD: Despite complying with four out of seven points combined action plans, the Financial Action Task Force (FATF) has kept Pakistan on the grey list and asked Islamabad to investigate and prosecute commanders and leaders of UN-designated persons in its resolutions.

“The FATF is a technical body comprising 39 jurisdictions and all countries take decision by consensus. We encouraged Pakistan that it progressed well as it largely complied on 30 points out of 34. It shows clear commitment of government of Pakistan and there is no discussion on blacklisting of the country,” the FATF’s President Marcus Pleyer said while addressing news conference from Paris after end of plenary meeting on Thursday.

When asked about Indian foreign minister’s statement and its role in keeping Pakistan on grey list, the FATF president made it clear that he would not respond to the statement of Indian foreign minister. However, he said that FATF is a technical body where all 39 countries take decision with consensus.

Pakistani authorities believe that FATF found Islamabad compliant on four more action plan out of seven points. But Pakistan could not satisfy the FATF’s plenary on last point of previous 27 action plan that required to investigate and prosecute UN designated outfits and its affiliates. Pakistan had submitted list of those person who were prosecuted out of designated list but FATF was asking to do more.

Pakistan also believed that pursuing two action plan simultaneously could not be justified as no other jurisdiction could be cited on this front. The FATF had handed over 6-point fresh plan after completion of Mutual Evaluation Report (MER) when Pakistan was implementing first 27 points action. Pakistan so far complied on 26 points and a single point remained but simultaneously second plan was placed before Pakistan in July 2021 plenary meeting of FATF.

The FATF’s plenary in its statement said on Thursday that since June 2018, when Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT (anti-money laundering/ counter financing of terrorism) regime and to address its strategic counter-terrorist financing-related deficiencies, Pakistan’s continued political commitment has led to significant progress across a comprehensive CFT action plan. Pakistan has completed 26 of the 27 action items in its 2018 action plan.

While Pakistan has reported some steps, the FATF encourages Pakistan to continue to make progress to address as soon as possible, the one remaining CFT-related item by continuing to demonstrate that TF investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups. In response to additional deficiencies later identified in Pakistan’s 2019 APG Mutual Evaluation Report (MER), in June 2021, Pakistan provided further high-level commitment to address these strategic deficiencies pursuant to a new action plan that primarily focuses on combating money laundering.

Since June 2021, Pakistan has taken swift steps towards improving its AML/CFT regime, including by enacting legislative amendments to enhance its international cooperation framework; demonstrating DNFBP monitoring for PF TFS and DNFBP supervision commensurate with the risks; and applying sanctions for noncompliance with beneficial ownership requirements.

Pakistan should continue to work to address its other strategically important AML/CFT deficiencies, namely by: (1) providing evidence that it actively seeks to enhance the impact of sanctions beyond its jurisdiction by nominating additional individuals and entities for designation at the UN; and (2) demonstrating an increase in ML investigations and prosecutions and that proceeds of crime continue to be restrained and confiscated in line with Pakistan’s risk profile, including working with foreign counterparts to trace, freeze, and confiscate assets, the statement said.

"FATF will undertake next review of Pakistan’s progress in February 2022," read the statement. It added that Pakistan is fully committed to completing both its action plans in cooperation with FATF and its international partners. "The high-level political commitment, which is driving its revamped AML/CFT regime, is widely recognised by the international community," the statement said.