The Financial Action Task Force (FATF) announced on Friday that Pakistan will continue to remain on the watchdog’s “increased monitoring list”, also known as the grey list, till it addresses the single remaining item on the original action plan agreed to in June 2018 as well as all items on a parallel action plan handed out by the watchdog’s regional partner – the Asia Pacific Group (APG) – in 2019.
Announcing the decision in a virtual press conference after the financial watchdog’s five-day plenary meeting, FATF President Dr Marcus Pleyer said, “Pakistan has made significant progress and it has largely addressed 26 out of 27 items on the action plan it first committed to in June 2018.”
Pleyer, however, added that the item on financial terrorism still needed to be addressed which concerned the “investigation and prosecution of senior leaders and commanders of UN-designated terror groups”.
He also pointed out that “a separate process has been taking place over the past few years” insofar as Pakistan was concerned.
“Back in 2019, FATF regional partner, the Asia Pacific Group (APG), identified a number of serious issues during its assessment of Pakistan’s entire anti-money laundering and counter-terrorist financing system. Since then Pakistan has made improvements. This includes clear efforts to raise awareness in the private sector to money laundering risks and to develop and use financial intelligence to build cases.”
But, he said, Pakistan was still “failing to effectively implement the global FATF standards” across a number of areas.
“This means risks of money laundering remain high which in turn can fuel corruption and organised crime. That is why the FATF has worked with the Pakistan government to work on areas that need to be improved as part of the new action plan that largely focuses on money laundering risks. This includes increasing the number of investigations and prosecutions and making sure that law enforcement agencies cooperate internationally to trace, freeze and confiscate assets.
“This is about helping authorities stop corruption and prevent organised criminals from profiting from their crimes and undermining the financial system and legitimate economy in Pakistan,” Pleyer said.
When asked about the new action plan after the APG evaluation, Pleyer said the plan had “six action items including enhancing international cooperation and demonstrating that assistance is being sought from foreign countries in implementing UN Security Council designations”.
He said “this is about demonstrating that supervisors are conducting both onsite and offsite supervision commensurate with the specific risks associated with the non-financial sector.”
“It’s also about demonstrating that sanctions are applied to all legal persons and arrangements for non-compliance with beneficial ownership requirements; increase in money laundering investigations and demonstrating that non-financial sector is being monitored for compliance with proliferation financing requirements,” he added.
Law Student, School of Law, Quaid-I-Azam University, Islamabad