Tale of great teamwork to meet FATF challenge

ISLAMABAD: The FATF achievement for Pakistan is a story of great team work, which not only successfully accomplished some of the impossible tasks locally but also outsmarted the devious moves of some foreign capitals, including New Delhi, against Islamabad.

Background interactions with official sources reveal that Army’s Military Operation (MO) Directorate in close coordination with all relevant federal and provincial authorities made it possible for Pakistan, which was being pushed from grey to black, but it all ended up showing Pakistan the second best after Britain among countries meeting the do’s and don’ts of the FATF’s anti-money laundering framework. In terror finance domain, Pakistan successfully completed all the targets, tailored specifically for Pakistan.

Before October 2019, the situation was really bad with none of the 85 recommendations set by FATF relating to the money laundering domain was met; in legal issues only 10 out of 40 recommendations were completed, and only five out of 27 items were added to the 2018 terror financing action plan.

There was no coherent strategy owing to which hardly any inter agency coordination was seen between nearly 29 federal and provincial authorities including ministries, departments, authorities etc which were working on FATF related issues. This situation was not only endangering Pakistan with the looming blacklisting by FATF but the institutions like IMF, WB and ADB were also closely linking their funding with compliance of FATF benchmarks.

In 2019, the then prime minister, in consultation with Chief of the Army Staff Gen Qamar Javed Bajwa, constituted a National FATF Coordination Committee with the Director-General Military Operations (DGMO) as a member. From then onward the GHO’s MO directorate became the linchpin for devising a national strategy, making plans and ensuring implementation in consultation with ministries of foreign affairs, interior, finance, communication, religious affairs, law and justice, minorities affair; regulators including FATF Sectt; NACTA, SBP, SECP, Pakistan Post, NAB, FIA, ANF, FBR, FC and intelligence and security agencies.

All these departments were made to work in close coordination to successfully complete the task in the minimum possible time. The ISI did the tricky work of handling the jobs relating to proscribed organisations besides making the political parties on both sides of the divide do the legislation required to meet FATF targets.

The MO Directorate took the lead and helped form 11 working groups, which firstly strategised and later ensured implementation of monthly targets. In all these working groups, MO Directorate’s officials were inducted as coordinators to check delays and ensure effective team work to meet the targets.

Over 200 dedicated officials, belonging to different departments, were part of the national efforts that paved the way for completion of action plans. In 2002, within eight months, 14 federal laws were promulgated, 22 relevant rules and regulations were framed and 31 directives and SOPs were issued.

Accordingly, with new inductions, Anti Money Laundering (AML) and Combating the Financing of Terrorism (CFT) directorates and intelligence cooperation cells were established in ministries and provincial departments. Sources said that amendments made in 2020 in the Anti-Money Laundering Act were pivotal to ensuring FATF compliance as its designated new AML/CFT regulators for real estate, jewelers, lawyers etc. and made money laundering offences cognizable while segregating Pakistan Post’s finance services.

Pakistan strengthened its Sanction Regimes to meet international obligations. To make its AML/CFT response irreversible, Pakistan established the National FATF Secretariat. By the end of 2020, with a robust legal regime, the coordination committee’s focus shifted to effectiveness and it led to issuance of new AML/CFT-centric supervisory plans by SBP and SECP; the response time of MLA requests decreased from 11 months to less than one money, 100% waqfs, trusts and cooperatives were inspected for beneficial ownership information; non-compliant entities were imposed with penalties worth Rs2.3 billion. Provincial home departments updated their respective 4th schedule lists in compliance with listing requirement whereas more than 1400 terror financing cases were registered.

Besides meeting the local targets, a holistic outreach plan for different friendly, neutral and hostile countries was prepared and implemented. A series of interactions with foreign Ambassadors in Islamabad, meetings with treasury and foreign ministry officers at international capitals and visits were all parts of this plan. The Pakistani teams working to meet FATF targets, also started formal engagement with the IMF and WB teams to ensure that various funding benchmarks are met.

The unprecedented team work of different government entities and a focused interaction without outsiders resulted in a complete change in international perception about Pakistan’s efforts. Consequently, early this year Pakistan completed the action plans and qualified for a FATF onsite visit in Aug 2011. The onsite visit of the FATF team was conducted from August 29 to September 2. The FATF team was completely satisfied with Pakistan’s progress in AML/CFT efforts resulting in the removal of Pakistan from the grey list.

While there has been a great coordinated teamwork between the government departments and entities, HBL’s Sultan Alana’s contributed in a big way by arranging the services of a renowned international consultancy firm which had assisted the national committee and its teams in understanding and meeting the FATF’s methodologies and expectations.