Finally in the White List

ByHoor Asrar Rauf

A national swimming champion and recently Graduated from UCF-USA in Hospitality and Event Management


June 19, 2022

Finally in the White List

Hoor Asrar describes Pakistan’s engagement with FATF

The Finally in the White List news of Pakistan moving out of the grey list of FATF on to the white list has been received with satisfaction bordering on joy as the country has been badly besieged by forces that rather vengefully monitor its state of financial affairs. After four days of deliberations in Berlin the FATF plenary has decided to begin the process of removing Pakistan from the grey list that would take few months to materialise. The crucial event as taken four years of rigorous monitoring of Pakistan’s efforts to combat terror financing and many allied matters that witnessed Pakistani authorities stretched to their limits. The Pakistani authorities have mentioned that Pakistan will submit its progress report in the first week of July to the FATF. The FATF team will then make on-site visits to Pakistan in the last week of July and hold meetings with relevant government departments. The on-site inspection team will submit its report to the FATF and on the basis of on-site team report the FATF will announce its decision.

Pakistan’s history with the FATF is quite long and rather long-winded full of extremely complicated issues that required strenuous efforts to streamline. Pakistan’s engagement with the FATF began in 2008 when it was first placed on its increased monitoring list dubbed as grey list for allegedly failing to take adequate measures to curb terror financing and money laundering. When FATF places a jurisdiction under increased monitoring it means the country has committed to resolving swiftly the identified strategic deficiencies within the agreed timeframes and is subject to increased monitoring. Since 2008, Pakistan has landed on the unwanted list twice more, in 2012 and 2018. Interestingly, each time Pakistan was placed on the grey list, the country was either headed towards elections or had recently completed a transition of power.

At long last the FATF June 2022 Plenary made the initial determination that Pakistan has substantially completed its two action plans, covering 34 items. It added that the initial determination warrants an on-site visit to verify that the implementation of Pakistan’s AML/CFT reforms has begun and is being sustained and that the necessary political commitment remains in place to sustain implementation and improvement in the future. Earlier, the FATF set conditions in February 2018 and then in June 2021 and Pakistan was asked to implement these conditions in 15 months but it took around four years due to complexity of these issues. The FATF’s decision will now require commitments from all the Pakistani stakeholders to prove to the FATF’s upcoming mission that no serious deficiency remains in its Anti-Money Laundering (AML) and Combating Terror Financing (CFT) regimes.

The FATF handout also noted that since June 2018, when Pakistan made a high-level political commitment to work with the FATF and Asia Pacific Group to strengthen its AML/CFT regime and to address its strategic counter-terrorist financing-related deficiencies, Islamabad’s continued political commitment to combating both terrorist financing and money laundering has led to significant progress. In particular, Pakistan demonstrated that terror financing investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups and that there is a positive upwards trend in the number of money laundering investigations and prosecutions being pursued in Pakistan, in line with Pakistan’s risk profile.

In the last plenary meeting, the FATF also acknowledged the significant progress made by Pakistan in completing the required action items. Earlier, Pakistan had completed 26 of the 27 action items in its 2018 action plan and one remaining points was about CFT related item by demonstrating that terror financing investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups. The remaining action item was the most significant among of all in the view of the member countries including the US and India, which have circled Pakistan through the FATF platform. In response to additional deficiencies later identified in Pakistan’s 2019 APG Mutual Evaluation Report (MER) in June 2021, Pakistan provided further high-level commitment to address these strategic deficiencies pursuant to a new action plan that primarily focused on combating money laundering.

The FATF had given a new six-point action plan in June last year, keeping Islamabad exposed to global pressure tactics. In response to additional deficiencies later identified in Pakistan’s 2019 APG Mutual Evaluation Report (MER), Pakistan has made progress to address a number of the recommended actions in the MER and provided further high-level commitment in June 2021 to address these strategic deficiencies pursuant to a new action plan. Pakistan was asked to continue to work to address its strategically important AML/CFT deficiencies by enhancing international cooperation by amending the Mutual Legal Assistance law and that it was seeking assistance from foreign countries in implementing UNSCR 1373 designations; demonstrate that supervisors were conducting both on-site and off-site supervision commensurate with specific risks associated with designated non-financial businesses and persons (DNFBPs), including applying appropriate sanctions where necessary. TW

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