F.P. Report
LAHORE: The Financial Action Task Force (FATF) is scheduled to hold its plenary and working group meetings in Paris from today in which Pakistan’s performance on the implementation of the global illicit financing watchdog’s 27 action points to curb terror financing and money laundering will be reviewed.
Experts are of the view that Pakistan is expected to exit the grey list soon after winning a “largely-compliant” rating from the FATF, or might get more time from the watchdog for attaining full compliance.
Pakistan will be judged by the FATF plenary meetings on the basis of the Joint Group’s report, concluded last month, for a possible exit from the ‘grey list’ or at least avoiding an entry into the black list.
Sources familiar with the matter told the media on Monday that Pakistan needs only 12 out of 39 votes for exiting the grey list.
Pakistan has already gained full support from China, Turkey and Malaysia, and aims to obtain 12 votes with escalated diplomatic campaign. Pakistan has ensured significant implementation on most of the recommendations and took necessary actions.
On Jan. 28, the State Bank stated that Pakistan had made significant progress to get off the grey list of the FATF while the central bank had been making all-out efforts to curb money laundering and terror financing. While announcing the monetary policy with unchanged interest rate of 13.25 percent, SBP Governor Dr Reza Baqir said that the last two reviews in May and September showed that Pakistan had made significant progress in most of the 27 points raised by the FATF.
However, he said, the FATF was the final authority to decide if the progress was enough to pull Pakistan out of the grey list, adding that the country would have to continue making progress in this direction.
Last month, despite strict opposition from India, several FATF’s Working Group members including the European Union and the United States had expressed satisfaction while reviewing Pakistan’s performance report from October 2019 till January 2020 in compliance with the global illicit financing watchdog’s action plan carrying 27 recommendations about the country’s anti-money laundering and combating financing of terrorism (AML/CFT) mechanism.
The Pakistani delegation led by the Minister for Economic Affairs Hammad Azhar, last month, had presented the report in a meeting with the Working Group in Beijing, and explained measures taken and progress made by the country in stopping funding of terrorists and eradication of money laundering since October last year.
The delegation had apprised the group about the implementation of 22 of the FATF’s recommendations in particular, and that a ban has been imposed on terrorist organisations together with amendments to the Anti-Money Laundering Act in the light of those recommendations. The FATF’s group was informed that penalties and sentences have been increased in the amendments.
The group had also reviewed answers given by Pakistan in a 650-page report to the global financial watchdog, and it will be considered by the body’s meeting starting from Feb. 16 in Paris.
The FATF had demanded Pakistan to convict those terrorists who had been associated with the banned outfits and also summoned copies of cases lodged against the banned organisations.
Details were also sought about legal steps taken concerning religious seminaries, action against money laundering, and transfer of funds, assets and jewelry in the name of terrorists.
Pakistan had forwarded all required particulars to the FATF while noting that investigations into 700 cases concerning transfer of funds to militants were ongoing.
The FATF had noted that 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 has made progress towards improving its AML/CFT regime, including the recent development of its ML/TF risk assessment.”
“At the October 2019 plenary, Pakistan reiterated its political commitment to completing its action plan and implementing AML/CFT reforms. Pakistan should continue to work on implementing its action plan to address its strategic deficiencies, including by:
Importantly, the body had noted that all deadlines in the action plan were expired.
While noting recent improvements, the FATF again had expressed serious concerns with the overall lack of progress by Pakistan is required to address its TF risks, including remaining deficiencies in demonstrating a sufficient understanding of Pakistan’s transnational TF risks, and more broadly, “Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the TF risks emanating from the jurisdiction.”
It had pointed out that, “To date, Pakistan has only largely addressed five of 27 action items, with varying levels of progress made on the rest of the action plan. The FATF strongly urges Pakistan to swiftly complete its full action plan by February 2020.”
“Otherwise, should significant and sustainable progress not be made across the full range of its action plan by the next Plenary, the FATF will take action, which could include the FATF calling on its members and urging all jurisdictions to advise their FIs to give special attention to business relations and transactions with Pakistan.”
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