IT has been over two years since Pakistan was placed on the FATF grey list. During this period, Islamabad has amended numerous laws and taken several actions to remove the weaknesses in its AML/CFT regime to address FATF concerns over money laundering and terror financing. But these measures have not impressed the global body.
Since the exact details of the FATF’s demands remain shrouded in unnecessary secrecy, it is hard to weigh what the government chooses to tell the people against what the FATF has divulged so far. Hence, it’s difficult to evaluate the decision of the Asia Pacific Group, the FATF’s regional affiliate, to retain Pakistan in the ‘enhanced follow-up’ list.
The APG has acknowledged that the country has made “some progress” in addressing the deficiencies in its framework to fight money laundering and terror financing. Its latest report, for example, concedes that Islamabad has made robust progress on 27 action points, including legislation in 15 areas, recommended by the FATF, and that measures had been taken to reduce vulnerability of national savings, Pakistan Post and real estate dealers to money laundering and terror financing. Yet it doesn’t find major changes in technical compliance, noting that the improvement is not “sufficient”. Thus, the progress on FATF recommendations in large part remains unchanged from a year ago.
It is unclear whether the report will have any impact on the FATF’s decision to remove from or retain Pakistan on the grey list in its meeting starting Oct 21. Many are hopeful that Pakistan will be moved out of the list as the latest review is based on the country’s performance until February this year. Islamabad has since made substantial progress on the recommendations, even though issues related to enforcement remain.
Foreign Minister Shah Mahmood Qureshi expects the country to be taken out of the grey list “soon”. How soon? He didn’t specify. He himself appears unaware of the outcome of the plenary. Pakistan needs the support of a minimum of 12 member countries of the 39-member FATF to exit the grey list. Chances are we may not be able to secure the required support in the forthcoming FATF meeting but will get more time to work on our AML/CFT regime.
Nevertheless, it is time for the world to appreciate Pakistan’s efforts and the willingness of the country’s leadership to do more to comply with the FATF’s mandate so that Pakistan can be removed from the grey list.
At the same time, Islamabad must be more transparent and step up its efforts to create a stronger legal framework, which is at par with global AML/CFT standards and FATF requirements. By ensuring transparency, it will be able to effectively quash concerns that some of the recent changes in the laws are meant more to hunt the opposition leadership rather than meet the FATF’s demands.
Published in Dawn, October 13th, 2020