ISLAMABAD: Expressing dissatisfaction over Pakistan’s inadequate compliance with global commitments, the Asia-Pacific Group (APG) — a regional affiliate of the Financial Action Task Force (FATF) — has flashed contradictory situations and poor coordination among stakeholders fighting money laundering and terror financing as top takeaways of three-day mutual evaluation.
No official word was available from the APG or the government on the conclusion of the on-site mutual evaluation, but in background discussions officials involved in the process mostly shared pessimism.
Informed sources said the visiting delegation highlighted many contradictory positions. For example, the Pakistani side was confronted with the statement that mosques and religious institutions were not involved in terrorism, but data showed most of the punishments and fines imposed on those collecting donations and delivering speeches around mosques and related systems.
Yet, there was no indication, based on official account, that any of those punished had any link with Al Qaeda or organisations accused by India of cross-border terrorism or other proscribed organisations (POs). As such, it did not impress the APG inspectors as to what was the point for actions against such people.
Points out poor coordination among stakeholders fighting money laundering and terror financing
The APG also pointed out lack of coordination among law enforcement agencies (LEAs) at different tiers of the government or active cooperation of certain intelligence agencies with such LEAs. The delegation also viewed that the government agencies did not have risk-based approach to take actions on account of anti-money laundering (AML) or counter-terror financing (CFT) and mostly operated on a pressure basis.
The sources said the concluding day had four detailed sessions with the Pakistani delegation led by the director general of Financial Monitoring Unit (FMU). The first session revolved around presentations by the Securities & Exchange Commission of Pakistan (SECP) and the Ministry of Foreign Affairs over international cooperation and information sharing for financial intelligence along with evidences and agreements signed with various countries to share information regarding immigrants and workers.
In another session, the SECP explained steps regarding enforcement and supervision of the AML/CFT regime in financial institutions, exchange companies and non-banking financial companies. The FMU explained in the third session deployment of prevention measures in the financial sector, including details, nature and actions on STRs generated by banking and financial sectors.
The concluding session discussed confiscations of proceeds of crimes relating to the AML/CFT regime. The sources said the APG appeared least interested in thousands of STRs issued or proceeds confiscated, but how many of them pertained to proscribed organisations, particularly eight named under the United Nations resolutions.
The APG termed actions against eight prominent proscribed organisations ineffective and inadequate. The sources said the APG had got prepared a third party audit through chartered accounting firms which also highlighted a series of loopholes and weaknesses.
When asked if the APG issued any formal warning on the conclusion of mutual evaluation, a senior official replied in the negative, saying the group would finalise its findings later and perhaps share with Pakistan authorities. He said Pakistan would separately submit a report within three weeks to the FATF by taking robust and coordinated actions in the coming days.
The FATF would review both the reports in May leading to a decision in June if Pakistan was prepared to move out of the grey list in September or fall into the blacklist. Much would also depend on diplomatic efforts and geo-political considerations, the official said.
Finance Minister Asad Umar, who did not attend APG reviews, gave an update to the National Security Committee about FATF-related matters and meetings held with the Asia Pacific Group. The meeting recounted various legislative and administrative measures taken by the government in dealing with militancy, combating terror financing, money laundering, hawala-hundi, etc. The prime minister stressed the need for continued and sustained on-ground effort towards taking this struggle to a conclusive end.
This came a day after reports that the APG considered Pakistan authorities very good on paper — legislation, regulation, data collection and notifications — mostly involving the federal government, but highly non-performing and ineffective at provincial and district levels where such POs and non-profit organisations actually operate. The APG was concerned over administrative inaction on sustainable basis at the district level.
Published in Dawn, March 29th, 2019