ISLAMABAD         -          The Financial Action Task Force (FATF) on Friday decided to retain Pakistan on its grey list for another four months after Islamabad failed to complete its action plan in line with the agreed timelines and in the light of the terror financing (TF) risks emanating from the jurisdiction.

Pakistan would remain on the FATF’s grey list till June 2020. The FATF has noted that all deadlines in the action plan have expired.

While noting the recent and notable improvements, the FATF again expressed concerns about Pakistan’s failure to complete its action plan in line with the agreed timelines and in the light of the TF risks emanating from the jurisdiction.

To date, Pakistan has largely addressed 14 of 27 action items, with varying levels of progress made on the rest of the action plan.

The FATF strongly urged Pakistan to swiftly complete its full action plan by June 2020, otherwise, it will take action, which could include the FATF calling on its members and urging all jurisdiction to advise their FIs to give special attention to business relations and transactions with Pakistan.

The global terror-financing and money-laundering watchdog has asked Pakistan to continue to work on implementing its action plan to address its strategic deficiencies in 8 points, including by: (1) demonstrating that remedial actions and sanctions are applied in cases of AML/CFT violations, relating to TF risk management and TFS obligations; (2) demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS); (3) demonstrating the implementation of cross-border currency and BNI controls at all ports of entry, including applying effective, proportionate and dissuasive sanctions; (4) 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; (5) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions (6) demonstrating effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1267 and 1373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services; (7) demonstrating enforcement against TFS violations including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases; (8) demonstrating that facilities and services owned or controlled by designated person are deprived of their resources and the usage of the resources.

“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 political commitment has led to progress in a number of areas in its action plan, including risk-based supervision and pursuing domestic and international cooperation to identify cash couriers,” yhe global terror-financing and money-laundering watchdog noted in its press release.

Meanwhile, the Ministry of Finance has also issued a handout that says, “The FATF reviewed progress made by Pakistan towards implementation of the Action Plan, while acknowledging the steps taken by Pakistan towards implementation of Action Plan and welcoming its high level political commitment, FATF highlighted the need for further actions for completing the Action Plan by June 2020. FATF members agreed to maintain Pakistan’s status on FATF’s compliance document, normally referred as the Grey List.”

The plenary meeting was held in Paris from February 16-21, 2020. The Pakistan delegation was led by Hammad Azhar, Minister for Economic Affairs Division.

The ministry claimed that Pakistan has made a significant progress in the implementation of FATF Action Plan during the last reporting period, which has been demonstrated by the completion of 9 additional action items.

“The Government of Pakistan stands committed for taking all necessary action required for completing the remaining items in the Action Plan. A strategy in this regard has been formulated and is being implemented,” the ministry of finance said.

The FATF will undertake the next review of Pakistan’s Progress in June 2020.

Pakistan has also thanked China for support in the FATF meetings.

 

FATF to keep

Pakistan in grey list till June