ISLAMABAD: Pakistan will continue to stay on the grey list of the Financial Action Task Force (FATF) for another four months, i.e until June for three out of 27 unmet action plan targets on anti-money laundering and combating financing terror (AML/CFT).

“Pakistan remains in the increased monitoring list (the grey list),” announced FATF President Dr Marcus Pleyer while appreciating that the country had made significant progress on all aspects of AML/CFT action plan “but severe deficiencies still remain relating” to terror financing.

“To date, Pakistan has made progress across all action plan items and has now largely addressed 24 of the 27 action items. As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan before June 2021,” said the president of Paris-based global watchdog on money laundering and terrorist financing.

In a statement, the ministry of finance said the “FATF has acknowledged the continued high-level political commitment of Pakistan to combat terrorist financing which, according to FATF statement, has led to significant progress across a comprehensive countering financing of terrorism plan”.

Acknowledging country’s progress on AML/CFT, global watchdog’s chief says it hasn’t met 3 of 27 action plan targets

The FATF president said he “strongly urged Pakistan” to complete the action plan at the earliest. Responding to a question, he said only “a fully completed action plan including three outstanding areas” will be verified and then FATF members will test “its sustainability” and suggest future steps.

The FATF asked Pakistan to continue to work on implementing the three remaining items in its action plan to address its strategically important deficiencies. These include (1) demonstrating that TF investigations and prosecutions target persons and entities acting on behalf or at the directive of the designated persons or entities; (2) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions; and (3) demonstrating effective implementation of targeted financial sanctions against all 1,267 and 1,373 designated terrorists, and those acting for them or on their behalf.

Replying to a question, the FATF chief made it clear that Pakistan could not be considered for blacklisting even after next deadline of June because the country had agreed to complete the action plan, remained committed to it and “they have shown progress on all counts” and hence that was not the stage to put a country on blacklist. Yet, “we urge the government of Pakistan to make fast progress” to move forward.

The FATF noted that since June 2018, when Pakistan made a high-level political commitment to work with the FATF and the Asia Pacific Group to strengthen its AML/CFT regime and to address its strategic counterterrorist financing-related deficiencies, the country’s continued political commitment had led to significant progress across a comprehensive CFT action plan. This includes demonstration that law enforcement agencies are identifying and investigating the widest range of TF activity, demonstrating enforcement against TFS violations, and working to prevent the raising and moving of funds, including by controlling facilities and services owned or controlled by designated persons and entities.

The FATF also added four more jurisdictions to the increased monitoring list that included Burkina Faso, the Cayman Islands, Morocco and Senegal.

Pakistan’s virtual delegation in the FATF plenary was led by Minister for Industries Hammad Azhar, who is the chairman of the FATF Coordination Committee.

The ministry of finance said Pakistan had undertaken enormous work to strengthen its AML/CFT regime and address the strategic counter-terrorist financing related deficiencies. In addition to the acknowledgement by the FATF in its plenary statement that Pakistan had made significant progress on the entire action plan by addressing 24 out of the 27 items in the action plan, Pakistan has also made notable progress in the remaining three action items which also stand partially addressed.

In a statement, the ministry conceded that some deficiencies still existed. It said that as of now, all the 10 action items pertaining to the financial sector and border controls had been addressed. In relation to terrorism financing investigations and prosecutions, six of the eight action items have been addressed, whereas for targeted financial sanctions, eight of the nine action items have also been addressed.

“The progress on the remaining three action items is well underway with significant progress made so far,” the statement said, adding that the country reaffirmed its commitment to continue strengthening the AML/CFT regime in line with the global standards.

Published in Dawn, February 26th, 2021

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