The Financial Action Task Force (FATF) on Thursday announced that Pakistan will remain on its enhanced watch list, also known as the gray list.
Pakistan has been on the gray list since June 2018 for deficiencies in its counter-terrorism financing and anti-money laundering regime.
Announcing the decision, FATF President Dr Marcus Pleier said Pakistan had to complete two concurrent action plans with a total of 34 items. “It has now addressed or largely addressed 30 items,” he said.
“Its most recent action plan since June this year, which focused primarily on money laundering loopholes, was issued by the FATF regional partner – the Asia Pacific Group – following the identification of a number of serious issues.
“Overall, Pakistan is making good progress on this new action plan. Four of the seven action plan items have now been addressed or addressed extensively.”
He said this includes showing that financial observers are conducting on-site and off-site checks on non-financial sector businesses and making legislative amendments to improve international cooperation.
Commenting on the action plan prepared in 2018, which focused on terror financing, the FATF president said that Pakistan was still assessed that 26 out of 27 items were addressed extensively.
“Pakistan has taken several important steps, but it needs to be shown that the senior leadership of UN designated terrorist groups is being investigated and prosecuted,” he said.
All these changes are about helping officials stop corruption, terrorism and organized criminals from profiting from their crimes, he said, thanking the government for their “continued strong commitment” to the process.
‘FATF took unanimous decision’
for a question about a Claims of the Minister of India That the Modi government had ensured that Pakistan remained on the ‘grey list’, Dr Player said that the FATF is a technical body and “we take our decisions by consensus. […] So it is not just one country that decides.”
After the last plenary session in July, India’s External Affairs Minister S Jaishankar said the Modi-led Bharatiya Janata Party (BJP) government had ensured that Pakistan remained on the FATF’s ‘grey list’.
Addressing a virtual training program on foreign policy for BJP leaders, Jaishankar said, “Because of us, Pakistan is under the lens of FATF and it was kept on the gray list.”
Refusing to comment on the Indian minister’s remarks, Dr Player said the FATF comprises 39 jurisdictions and all decisions on Pakistan are taken by consensus.
‘FATF recognizes progress of Pakistan’
The Finance Department said in a statement that the FATF recognized “considerable progress” made by Pakistan on both action plans.
The statement said Pakistan has completed four of the seven items in the 2021 action plan, adding that these were completed “much ahead” of the deadline set by the FATF. It said progress on the remaining three items was “well underway” and aimed to complete them before the deadline set by the financial watchdog.
“Work items completed which include amendments to Mutual Legal Assistance Act, 2020, AML/CFT [anti-money laundering/combating the financing of terrorism] Supervision of Designated Non-Financial Businesses and Businesses (DNFBP), transparency of beneficial ownership information and implementation of financial sanctions targeted by DNFBP for dissemination finance,” the statement said.
It said the remaining items in the 2021 action plan include investigation and prosecution of money laundering cases, confiscation of assets and UN listing.
Regarding the remaining one item on the 2018 Action Plan, the Finance Department said that Pakistan has submitted a comprehensive progress report in this regard.
“The FATF acknowledged Pakistan’s continued political commitment, making significant progress in a comprehensive CFT action plan and encouraging Pakistan to report further progress on the investigation and prosecution,” the statement said.
The Finance Division noted that “considerable work” has been done on the remaining items of both action plans, adding that the FATF will review Pakistan’s progress in February 2022.
June full
The FATF held its last session in June. kept Pakistan is on the “Enhanced Watch List” of surveillance until it addresses the single remaining item on the Basic Action Plan agreed in June 2018 as well as the Parallel Action Plan given by the Asia Pacific Group – FATF’s regional partner but addresses all items.
“Pakistan has made significant progress and has addressed 26 of the 27 items on the Plan of Action that were first taken in June 2018,” FATF President Dr Marcus Pleier said after a plenary meeting.
However, he said that the remaining item on financial terrorism still needed to be addressed which pertains to the “investigation and prosecution of senior leaders and commanders of terrorist groups designated by the United Nations”.
The FATF, after discussions, had decided to maintain the status quo for Pakistan – the countries which are under surveillance. It is expected that the remaining action items will be completed before the next plenary meeting of the FATF, scheduled for October.
Soon after the announcement, the then Minister of Industries and Production Hammad Azhar had said that the APG had given seven additional action points under the parallel mutual evaluation mechanism, under which Islamabad had largely completed 75 of the 82 action points.
Azhar had said that Pakistan would achieve within three-four months the only remaining target of the FATF to speedily prosecute the leaders of UN-designated terror groups.
He had said that the government has set a target of completing seven action points of the APG within 12 months – a target that most courts achieve in two years.
The Pleader made it clear that Pakistan would not be removed from the gray list until both action plans were completed and the members then concluded that the systems and efforts were sustainable against financial risks.
He had said that the rules apply very clearly and uniformly that the jurisdictions under the enhanced watch list must meet all action points and fully address the risks.
Under the new action plan, Pakistan will have to address its strategically important AML/CFT deficiencies. These include increasing international cooperation by amending MLA law to indicate that assistance is being sought from overseas in implementing the UNSCR 1373 designations, and also on-site and off-site, commensurate with the specific risks associated with non-financial designated observers. -Site supervision is conducting both. Business and business (DNFBP) including the imposition of appropriate sanctions where necessary.
The new actions also require Pakistan to demonstrate that proportionate and counterproductive sanctions to legal systems for non-compliance with all legal persons and beneficial ownership requirements consistently apply, showing an increase in ML investigations and prosecutions and crimes. The proceeds are controlled and confiscated in line with Pakistan’s risk profile, including working with foreign counterparts to locate, freeze and confiscate assets. Also, the government must demonstrate that the DNFBP is being monitored for compliance with expansion financing requirements and sanctions are being imposed for non-compliance.
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