APG scrutiny

The Asia Pacific Group—an FATF style regional body on Monday urged Pakistan to intensify action against the non-profit organisations suspected of giving financial aid to terrorist groups, and bring more transparency in the steps it is taking over proliferation matters. Technical experts of APG started the third Mutual Evaluation process of Pakistan that will end on 19th of this month. The technical experts from the US, the UK, Turkey Maldives, Indonesia and China have started assessing the steps taken by Pakistan to meet the FATF recommendations.

The purpose of the APG 10 day visit to gauge the effectiveness of Pakistan’s anti-money laundering (AML) and counter terror financing (CFT) regime under the FATF effectiveness methodology. Plenary meeting of this international watchdog on anti-money laundering and counter terror financing will start in Paris from 14th of this month. Pakistan is exposed to the scrutiny of APG and FATF after being grey-listed with effect from June this year. In Paris a joint group would submit its analysis report to FATF’s International Cooperation Review Group (ICRG) and its recommendations on the basis of Pakistan’s action plan.

The APG delegation met the officials of Financial Monetary Unit (FMU), the Federal Investigation Agency (FIA) and Anti Narcotics Force (ANF). The FMU informed the delegation about the legal and regulatory changes that Pakistan has made in the past couple of months. Pakistan has also to decide to enact a law to create deterrence against the transfer of money through non-banking channels by enhancing punishments. The Pakistani authorities have decided to bring amendments to the FIA Act 1974, the Foreign Exchange Regulation Act 1947, and the Anti-money laundering Act 2010. Moreover, the use of cash in Pak-Afghan trade would be discouraged in order to curb currency smuggling across the border.

The PTI government does not have two-third majority to make new legislation required for the passage of a compressive anti-money laundering counter terror financing legislations. The main opposition party PML-N and PPP would not cooperate with government to pass these laws from both the houses of the parliament as their top leadership of PML-N facing trial in the NAB court and PPP leadership is facing probe in money laundering through fake bank accounts.

The new government may not stand the political pressure if it takes action against the non-profit organisations suspected of giving financial aid to terrorist groups and bring more transparency over proliferation matters. It remains to be seen how far the new government succeeds in implementing the FATF action plan for effectively curbing money laundering and terror financing. The cosmetic measures like banning voluntary trust organization will not convince the FATF to remove Pakistan from the grey list. A consensus among the political parties is essential for effective legislations to streamline the anti-money laundering and counter terror financing regime.


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The Frontier Post

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