FATF keeps Pakistan in grey list till Feb 2021

ISLAMABAD: The Financial Action Task Force (FATF) on Friday announced keeping Pakistan on the grey list till February 2021.

The FATF took the stance that Pakistan would have to comply with the remaining six items out of 27 action plans to come out from the jurisdiction under increased monitoring.

“Pakistan must comply with remaining six items then the FATF will send its onsite tram to verify progress on the ground. After completion of this process, the FATF will consider Pakistan to exclude from the list of jurisdiction with increased risk of terror financing that is called grey list. There is no discrimination against Pakistan as the global accepted rules are applied in its case,” the FATF President Dr Marcus Pleyer said in first ever virtual press conference from anti-money laundering/terror financing watchdog headquarters at Paris on Friday at the end of three-day plenary meeting.

When The News asked him about Pakistan’s progress after implementing 21 points out of 27 action plan and whether pursuing Mutual Evaluation (ME) from Asia Pacific Group (APG) was discriminatory, the FATF president replied that even though Pakistan has made progress, but it needs to do more.

Pakistan cannot stop now as it needs to carry out reforms in particular to implement targeted financial sanctions and prosecuting sanctions against those financing terrorism. “We urge Pakistan to implement remaining six items out of 27 action plan, then our onsite team will visit to verify progress on ground before excluding Pakistan from grey list,” he added. He said the FATF members had nominated Pakistan into list of high risk jurisdictions so the process of review through ICRG kick-started.

The FATF plenary removed Iceland and Magnolia from the grey list. North Korea and Iran will remain on blacklist. Federal Minister for Industries Hammad Azhar in his tweet stated, “FATF acknowledges that any blacklisting is off the table now. Pak has achieved impressive progress on its FATF action plan. 21 out of 27 action items now stand cleared. Remaining 6 rated as partially complete. Within a year, we progressed from 5/27 to 21/27 completed items.”

According to a statement issued by FATF after the meeting, since June 2018, when Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counter terrorist financing-related deficiencies, Pakistan’s continued political commitment has led to progress in a number of areas in its action plan; taking action to identify and sanction illegal MVTS, implementing cross-border currency and BNI controls, improving international cooperation in terrorist financing cases, passing amendments to the ATA to increase the sanctioning authority, financial institutions implementing targeted financial sanctions and applying sanctions for AML/CFT violations, and controlling facilities and services owned or controlled by designated persons and entities.

Pakistan should continue to work on implementing its action plan to address its strategic deficiencies by: (1) demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and those acting on behalf or at the direction of the designated persons or entities; (2) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions; (3) demonstrating effective implementation of targeted financial sanctions against all 1,267 and 1,373 designated terrorists and those acting for or on their behalf, preventing the raising and moving of funds including in relation to NPOs, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services; and (4) demonstrating enforcement against TFS violations, including in relation to NPOs, of administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases.

The FATF takes note of the significant progress made on a number of action plan items. To date, Pakistan has made progress across all action plan items and has now largely addressed 21 of the 27 action items. As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan by February 2021, the statement concluded.

The Finance Ministry said in a statement that the FATF has taken note of the significant progress made by Pakistan on a number of action plan items.

Recognising Pakistan’s sustained and irreversible efforts on implementation of FATF Action Plan, the FATF has upgraded overall 9 action plan items in its October 2020 Plenary. There is no item remaining in the ‘incomplete’ category. It is pertinent to mention here that prior to this plenary, Pakistan had addressed 14 out of 27 items and now FATF reviewed compliance of remaining 13 Action Plan items during current plenary.

The action plan items that have been addressed by Pakistan include highly important areas of financial sector, illegal hawala/hundi, cross-border currency regime, international cooperation in terrorist financing cases, amendments to the Anti-Terrorism Act, implementation of targeted financial sanctions by financial institutions, applying sanctions for AML/CFT violations, and controlling facilities and services owned or controlled by designated persons and entities. This is indicative of the confidence of FATF on the efforts of Pakistan government.

However, in view of the six items in ‘partially addressed’ category, the plenary meeting decided to maintain status quo with respect to classification of Pakistan, for the time being. Considerable work has already been carried-out on these six items. Pakistan shall continue to make efforts to complete the remaining items in line with its strategy by February 2021. The FATF will undertake the next review of Pakistan’s progress in February 2021.

The Plenary meetings of FATF were held virtually from 18-23 October 2020, where its members discussed a variety of topics including Pakistan’s progress. The Pakistan team led by Hammad Azhar attended these virtual meetings. Pakistan presented its case in an effective manner and also reaffirmed its political commitment to continue with the efforts to complete the action plan.