The Financial Action Task Force (FATF) on Friday announced that Pakistan will continue to remain on its ‘increased monitoring list’, referred to more commonly as the grey list.
Addressing a webinar to announce the decisions taken by the plenary in its three-day meeting period from October 21 to 23, FATF President Dr Marcus Pleyer said that the forum has decided that Pakistan ‘needs to do more’ when it comes to fulfilling the requirements set out by the task force. It was acknowledged that of the 27 conditions that were put forth to Pakistan, 21 have been fulfilled.
To a question, Dr Pleyer said that once the remaining six conditions are fulfilled, an “on-site visit” will be approved under which a team from the FATF will visit the country for the next review. “Our discussions are confidential […] the members decided by consensus that Pakistan needs to complete these six items for an onsite visit to be granted. As soon as the plenary decides that Pakistan has completed all the 27 items, then an onsite visit will be made. After that, it will be decided whether the country will be allowed to exit the grey list or not.”
He said that the new deadline for Pakistan to fulfil the remaining conditions is February 2021 when the next plenary meeting will take place.
“As long as Pakistan can be seen progressing and fulfilling the requirements, it will be given a chance. There are some countries which are not making progress and have been placed on the black list,” said Dr Pleyer.
In a statement issued after the plenary session concluded, the financial watchdog said Pakistan needs to work on four areas to ‘address its strategic deficiencies’. These include: demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest range of terror financing activity, which target designated persons and entities, and those who act on the behalf/direction of the designated persons or entities; demonstrating that terror financing prosecutions result in effective, proportionate and dissuasive sanctions; demonstrating effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists and those acting for or on their behalf; preventing the raising and moving of funds including in relation to non-profit organisations; identifying and freezing assets; prohibiting access to funds and financial services; and demonstrating enforcement against violation of terror financing sanctions, including in relation to NPOs, of administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases.
Reacting to the decision, Minister for Industries and Production Hammad Azhar said that Pakistan has ‘achieved impressive progress’ on its FATF action plan. He said that 21 out of 27 action items ‘now stand cleared’ and the remaining six are ‘partially complete’.
Azhar, who previously held the portfolio of Minister for Economic Affairs, said that “within a year”, Pakistan has progressed from 5/27 to 21/27 completed items. He said that discussions in the lead up to the decision “remained focused on how Pakistan can be facilitated” for the upcoming evaluation, due mid next year. “I congratulate our federal and provincial teams who have worked day and night even during the pandemic to ensure this turn around,” he wrote.
The plenary was earlier scheduled in June but got postponed due to the Covid-19 pandemic.
Earlier, Foreign Minister Shah Mehmood Qureshi said once again India would remain unsuccessful to blacklist Pakistan at FATF. Talking to reporters here, the foreign minister said the government and the parliament through effective legislation and administration have taken solid steps to control money-laundering, and expressed confidence that India’s malicious attempts in that regard would prove futile.
Qureshi mentioned that Pakistan has ensured compliance of 21 out of 27 action items and called upon the FATF to “positively assess and acknowledge the country’s efforts”. He also urged the opposition to refrain from politicking on the subjects of national importance, particularly relating to the FATF and Kashmir.
In February 2020, the FATF plenary had granted Pakistan a grace period of four months to complete its 27-point action plan against money-laundering and terror financing (ML&TF) after it noted that the country was compliant on 14 points.
Pakistan was placed on the grey list in June 2018.
Pakistani authorities had already claimed that the Joint Working Group (JWG) of FATF had so far found the country compliant on a total 21 points out of the 27 identified in the prescribed action plan.
The FATF places those countries on its grey list which are not taking measures to combat terror funding and money laundering. Placement on the grey list is a warning for a country that it may be put on the blacklist in case of its failure to take effective measures against money laundering and terror financing. After being placed on the grey list, a country is directly scrutinised by the financial watchdog until it is satisfied by the measures taken to curb terror financing and money laundering. If the watchdog does not deem progress by countries on the list as satisfactory, they may be relegated to the blacklist – a list of the countries branded as uncooperative and tax havens for terror funding. These countries may face global sanctions as well.
