Saturday, December 2, 2023

Pakistan still on the FATF grey list

The Financial Action Task Force (FATF) announced on Friday that Pakistan will continue to remain on the gray list, until it addresses all items in the original action plan agreed in June 2018 as well as all the items in a parallel action plan delivered by the watchdog’s regional partner – the Asia Pacific Group (APG) – in 2019.

Dr. Marcus Pleyer about Pakistan:

FATF President Dr. Marcus Pleyer said: “Pakistan has made significant progress and has largely addressed 26 of the 27 action plan items it first committed to in June 2018.” But the item on financial terrorism still needs to improve.

“In 2019, FATF’s regional partner, Asia Pacific Group (APG), identified several serious issues during its assessment of Pakistan’s entire anti-money laundering and terrorist financing system. But Pakistan was still “failing to effectively implement the FATF global standards” in many areas, so it was not possible to remove it from the FATF greylist.

That’s why FATF has worked with the government of Pakistan to work on areas that need improvement as part of the new action plan that focuses primarily on money laundering risks.

Dr. Marcus Pleyer said the plan has “six action items, including increasing international cooperation and demonstrating that assistance is being requested from foreign countries for the implementation of UN Security Council designations.”

Pleyer said the delisting will not occur until both action plans are completed and two on-site have been granted and successfully completed and have shown that the improvements are sustainable ​​before FATF members decide to delist.

FATF President Dr. Marcus Pleyer said Pakistan remains under increasing scrutiny, adding that “although Islamabad has made significant progress, there were still some serious shortcomings in the mechanisms for preventing terrorist financing.”

A few days ago, Foreign Minister Shah Mahmood Qureshi said that given Pakistan’s recent progress, the financial agency had no justification for keeping the country on its greylist.

“We received 27 points in the FATF Action Plan and 26 completed,” said Qureshi, adding that work was underway to resolve the remaining item.

But Pakistan could not remove itself from the FATF gray list because of deficiencies in its anti-terrorism financing and money laundering regimes since June 2018.

Three remaining action plans to fulfill Pakistan:

FATF emphasized that Pakistan should fully address three remaining points in the action plan:

  • demonstrate that FT (Terrorist Financing) investigations and prosecutions target persons and entities acting on behalf of or under the direction of designated persons or entities;
  • demonstrate that FT processes result in effective, proportionate, and dissuasive sanctions; and
  • demonstrating the effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists, specifically those acting on their behalf.

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