ISLAMABAD: Pakistan announced on Friday that it had formulated a broad-based strategy for taking actions for meeting its outstanding commitments with the Financial Action Task Force (FATF) in the next four months to get out of the grey list.
The announcement was made by the Ministry of Finance after the weeklong FATF plenary, which concluded in Paris, noted with concern that all deadlines given to Pakistan to complete 27-point action plan had expired and yet only 14 targets had largely been completed. Pakistan has to complete the remaining 13 targets by June this year.
The FATF urged Pakistan to swiftly complete its full action plan by June or else it would be moved to the list of monitored jurisdiction, commonly known as the blacklist.
Islamabad urged to complete its action plan by June to avoid blacklist
“Otherwise, should significant and sustainable progress especially in prosecuting and penalising TF (terrorist financing) not be made by the next Plenary, the FATF will take action, which could include the FATF calling on its members and urging all jurisdiction to advise their Financial Institutions (FIs) to give special attention to business relations and transactions with Pakistan,” the global money laundering watchdog said in a formal announcement.
The FATF said it had noted “recent and notable improvements” but “again expresses concerns given Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the TF risks emanating from the jurisdiction”. To date, Pakistan has largely addressed 14 of 27 action items, with varying levels of progress made on the rest of the action plan, it added.
The finance ministry said in a statement that the government stood “committed for taking all necessary actions required for completing the remaining items in the action plan. A strategy in this regard has been formulated and is being implemented”.
Minister for Economic Affairs Hammad Azhar represented Pakistan at the FATF Plenary meeting held in Paris from Feb 16 to 21.
The statement said that Islamabad had made “significant progress in the implementation of FATF action plan” as demonstrated by the completion of nine additional action items after October last year. “FATF members agreed to maintain Pakistan’s status on FATF’s compliance document, normally referred as the Grey List”, the finance ministry added. The FATF will undertake the next review of Pakistan’s progress in June.
Xiangmin Liu, who belongs to China, is president of the FATF. A Chinese government spokesperson separately said in Beijing that Pakistan had made enormous efforts in improving its counter-terror financing system, which had been “recognized by the vast majority of FATF members” at the plenary and hence it was decided that Pakistan be allowed more time to continue implementing its action plan.
China said that the purpose and aim of the FATF was to support countries’ efforts to strengthen institutions against money laundering and terror financing and safeguard the international financing system. “We stand ready to work with relevant parties to offer more assistance to Pakistan in this area.”
Adviser to the Prime Minister on Finance and Revenue Dr Hafeez Shaikh also had a meeting with Chinese Ambassador in Pakistan Yao Jing and thanked the Chinese government for their massive support in the FATF meetings. The adviser said that China and other brotherly countries had supported Pakistan throughout the process in terms of guiding the country to improve its frameworks.
In June 2018, Pakistan made a high-level political commitment to work with the FATF and Asia Pacific Group to strengthen its anti-money laundering and combating the financing of terrorism (AML/CFT) regime and to address its strategic counter-terrorism financing-related deficiencies. The FATF said that Pakistan’s political commitment had led to progress in a number of areas in its action plan, including risk-based supervision and pursuing domestic and international cooperation to identify cash couriers.
It asked Pakistan to continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) demonstrating that remedial actions and sanctions are applied in cases of AML/CFT violations, relating to TF risk management and TFS (targeted financial sanctions) obligations; (2) demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS); (3) demonstrating the implementation of cross-border currency and BNI (bearer negotiable instruments) controls at all ports of entry, including applying effective, proportionate and dissuasive sanctions; (4) demonstrating that law enforcement agencies are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and those acting on behalf or at the directive of the designated persons or entities; (5) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions (6) demonstrating effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1,267 and 1,373 designated terrorists and those acting for them or on their behalf, including preventing the raising and moving of funds, identifying and freezing movable and immovable assets, and prohibiting access to funds and financial services; (7) demonstrating enforcement against TFS violations including administrative and criminal penalties and the provincial and federal authorities’ cooperating on enforcement cases; (8) demonstrating that facilities and services owned or controlled by a designated person are deprived of their resources and the usage of the resources.
Published in Dawn, February 22nd, 2020