Country may remain on FATF list beyond February: minister

Published November 8, 2019
FATF plenary — to be held by mid-February — would finally decide whether Pakistan should be removed from the grey list or not. — FATF website/File
FATF plenary — to be held by mid-February — would finally decide whether Pakistan should be removed from the grey list or not. — FATF website/File

ISLAMABAD: Pakistan may remain on the grey list of the Financial Action Task Force (FATF) beyond February 2020, mainly because of its risk profile and in view of two simultaneous evaluations.

Senior officials provided this information to a parliamentary panel on Thursday. They also revealed that the government recovered only Rs5.6 billion in taxes on foreign assets worth about $7.4bn (Rs1.15 trillion) of Pakistanis reported by the international community under information exchange arrangements.

“Pakistan faces greater challenges than many other countries because of its risk profile,” said the minister responsible for economic affairs division, Hammad Azhar, while speaking at a meeting of the National Assembly’s Standing Committee on Finance and Revenue, presided over by MNA Asad Umar.

He said that some countries had been removed from the grey list after just 80 per cent compliance while Pakistan may be required to do more.

Only Rs5.6bn taxes recovered from people owning assets worth Rs1.15tr abroad

The minister said Pakistan was taking timely steps to meet the FATF targets as it was partially compliant on 22 of the 27 points in the action plan and non-compliant on five targets of the International Cooperation Review Group (ICRG).

Pakistan will submit its next report on its action plan to the Asia-Pacific Group (APG) by Dec 7. The APG will return the report with its questions and feedback by Dec 17. Islamabad will be required to respond to these observations by Jan 7.

Pakistan’s technical team will attend a meeting of the APG joint working group in the third week of January to address any further questions and concerns. The joint working group will then submit its report to the FATF by end of January and the FATF plenary to be held by mid-February would finally decide whether Pakistan should be removed from the grey list or not.

Mr Azhar said the government was optimistic that it would achieve sufficient progress for the country to be removed from the grey list, but then it was also being reviewed simultaneously for a 40-point action plan of the APG for which the deadline was October 2020.

He said it was not clear what would the FATF decide about the intervening period — between February under the ICRG and October 2020 under the APG. He said there was a possibility that Pakistan would remain on the grey list until October next year even if it complied with the action plan for February.

Meanwhile, Federal Board of Revenue chairman Shabbar Zaidi told the meeting that the government had received 325 cases involving foreign assets worth $1 million or more of Pakistanis from 27 countries as of Oct 31. Upon examination, it was found that 135 persons had availed the 2018 amnesty scheme and declared Rs62.33bn worth of assets by paying Rs2.89bn. Another 56 people declared assets of Rs31.78bn under the 2019 amnesty scheme by paying Rs1.69bn.

Of the remaining 115 cases, the FBR imposed tax worth Rs4.06bn and recovered about Rs1bn. The remaining tax claims got stuck in courts as their owners secured stay orders.

Published in Dawn, November 8th, 2019

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

New funds
27 Feb, 2024

New funds

PAKISTAN plans to seek a new loan of $6bn from the IMF under its Extended Fund Facility for a period of three years,...
Missing link
27 Feb, 2024

Missing link

WITH most of Punjab and KP now accessible via motorways, which have greatly eased road travel for the bulk of the...
Tragedy averted
Updated 27 Feb, 2024

Tragedy averted

Pakistan must shed the layers of intolerance that have been allowed to permeate society.
Spirit of ’74
26 Feb, 2024

Spirit of ’74

FOR three days in 1974, starting Feb 22, Lahore witnessed an epochal meeting of 38 Muslim nations as it hosted the...
Silence strategy
Updated 26 Feb, 2024

Silence strategy

Attempts at internet censorship only serve to tarnish Pakistan’s image globally and betray the democratic principles the country purports to uphold.
Nepra’s reluctance
26 Feb, 2024

Nepra’s reluctance

WHAT is the point in having a regulator that does not punish the entities it oversees for misconduct and...