FATF set to meet Pakistan in June, to Review Performance against Terror and Money Laundering
Pakistan’s performance to satisfy international commitments and standards within the fight against concealment and terror financing are going to be reviewed by the Financial Action Task Force (FATF) at its meeting slated to be held in Beijing, China on June 21-26.
In February, the Financial Action Task Force (FATF) has kept Pakistan on its ‘grey list’ and has given Pakistan another four months to meet the remaining 13 out of a total of 27 actions to address ‘strategic deficiencies’ relating to counter money laundering, terrorist financing and proliferation financing.
A senior government official told Dawn that Pakistan’s performance would be reviewed at the joint working group meetings of the FATF and Eurasian Group (EAG) scheduled for June 21-26 in Beijing and therefore the assessment would cause final announcement in October this year if Pakistan should move out of the grey list. Official said certain action points were yet to be complied with the commitments mainly because of ongoing coronavirus lockdowns.
Officials said that Pakistan had put in situ a broad-based strategy for taking necessary actions to finish outstanding commitments with the FATF in February and was actively making progress. The FATF announced on February 21 that each one deadlines given to Pakistan to finish 27-point action plan had expired and yet only 14 items had largely been completed, leaving 13 unaccomplished targets. It strongly urged Pakistan to swiftly complete its full action plan by June 2020 alternatively it might be moved to the list of monitored jurisdiction, commonly referred to as blacklist.
“Otherwise, should significant and sustainable progress especially in prosecuting and penalising TF (terrorist financing) not be made by subsequent Plenary, the FATF will take action, which could include the FATF calling on its members and urging all jurisdiction to advise their Financial Institutions (FIs) to offer special attention to business relations and transactions with Pakistan”, the FATF said in a formal announcement in February.
The FATF had noted “recent and notable improvements” but “again expresses concerns given Pakistan’s failure to finish its action plan in line with the agreed timelines and in light of the TF risks emanating from the jurisdiction”.
Pakistan has got to show compliance with 13 remaining action points in eight key categories. The country has got to demonstrate that remedial actions and sanctions are applied in cases of AML/CFT violations, concerning terrorist financing (TF) risk management and TFS (terror financing sanctions) obligations.
Pakistan has also to demonstrate that competent authorities were cooperating and taking action to spot and take enforcement action against illegal money or value transfer services and prove the implementation of cross-border currency and ‘bearer negotiable instruments’ controls at all ports of entry, including applying effective, proportionate and dissuasive sanctions.
Pakistan also has demonstrated that enforcement agencies are identifying and investigating the widest range of TF activity which TF investigations and prosecutions target designated persons and entities, and those working on behalf or at the direction of the designated persons or entities besides showing TF prosecutions end in effective, proportionate and dissuasive sanctions.
Pakistan’s outstanding action areas also include effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1,267 and 1,373 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.
Pakistan also will need to demonstrate enforcement against TFS violations, including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases and prove that facilities and services owned or controlled by designated person are deprived of their resources and the usage of the resources.
The FATF plenary had formally placed Pakistan within the grey list in June 2018 thanks to ‘strategic deficiencies’ in its AML/CFT regime after a push from India supported by the US, UK and some European countries. Pakistan then committed at the very best level to a 27-point action plan but did not meet deadlines.
Pakistan has already finalised major amendments to at least a dozen of its laws to meet FATF requirements by June this year.