Pakistan escapes FATF blacklist, but gets warning – Newspaper

ISLAMABAD: While offering a four-month lifeline, the Financial Action Task Force (FATF) has strongly urged Pakistan to quickly complete its complete action plan by February 2020 and until then the country will remain on the "gray list."

The Paris-based FATF reviewed the measures taken and the progress made by almost 15 countries, including Pakistan, against money laundering and the fight against terrorist financing (AML / CFT) in its five-day plenary, which concluded Friday. Representatives from 206 countries and jurisdictions around the world participated in the meeting. The Pakistani delegation was headed by the Minister of Economic Affairs, Hammad Azhar.

At the end of the meeting, three countries, Iceland, Mongolia and Zimbabwe, were added to the gray list, while Sri Lanka, Tunisia and Ethiopia were removed from the list because they have adequately complied with the FATF recommendations.

The news is not so good in the case of Pakistan, as the global control body warned of the action in case significant and sustainable progress is not achieved across the entire range of the action plan at the next plenary scheduled for February of 2020, said a statement issued by the FATF. . The action, he added, could include the FATF requesting its members and urging all jurisdictions to advise their financial institutions to pay special attention to trade relations and transactions with Pakistan.

The finance ministry reaffirms the commitment to implement the surveillance action plan

"To date, Pakistan has only largely addressed five of the 27 elements of action, with different levels of progress in the rest of the action plan," the note said.

While noting recent improvements, the FATF once again expressed serious concerns regarding Pakistan's general lack of progress in addressing its risks of TF (terrorist financing), including the remaining deficiencies to demonstrate a sufficient understanding of the risks of Transnational FTs of Pakistan and, more generally, the failure of the country to complete its action plan in accordance with the agreed deadlines and in light of the risks of FT arising from the jurisdiction.

The FATF places those countries on its gray list that are not taking measures to combat terrorist financing and money laundering. Graylisting is a warning to a country that it can be blacklisted if it does not take effective measures against money laundering and terrorist financing.

In 2012, Pakistan was included in the gray list and remained until 2015. The country was included again on the list on June 29, 2018. Pakistan received 15 months for the implementation of the 27-point action plan, with a warning that In case of failure, the country would be added to the blacklist, a list of countries classified as non-cooperative and tax havens for terrorist financing.

Currently, only Iran and North Korea are blacklisted.

Ramsha Jahangir

Since June last year, when Pakistan made a high-level political commitment to work with the FATF and APG (Asia and Pacific Group) to strengthen its AML / CFT regime and address its strategic deficiencies related to terrorist financing, Islamabad has progressed to improve its AML / CFT, including the recent development of its ML / TF risk assessment, according to the FATF statement.

Shortly after the announcement of the FATF, the finance ministry in a statement on Friday reaffirmed Pakistan's commitment to implement the FATF action plan.

The FATF meeting considered Pakistan's progress report on the action plan and its APG mutual evaluation report (MER).

But the finance ministry said the plenary meeting decided to maintain the status quo on the FATF action plan and allow the usual 12-month observation period for MER APG. The Pakistani delegation also held parallel meetings with several delegations and informed them of the progress made by Pakistan in the FATF action plan and the steps taken to strengthen its AML / CFT framework, according to the Ministry of Finance statement.

In plenary, Pakistan reiterated its political commitment to complete its action plan and implement AML / CFT reforms. At the end of the five days, the FATF reminded Pakistan that it should move forward with its previous commitments, according to the statement of the global regulator. Pakistan must continue to work on the implementation of its action plan to address its strategic deficiencies, including adequately demonstrating its adequate understanding of the risks of TF posed by terrorist groups and conducting risk-sensitive supervision, he added.

He said Islamabad demonstrated that corrective actions and sanctions were applied in cases of AML / CFT violations, and that these actions had an effect on AML / CFT compliance by financial institutions. In addition, the competent authorities are cooperating and taking measures to identify and take compliance measures against illegal money or value transfer services (MVTS).

The authorities will identify the cash couriers and apply controls on the illegal movement of currencies; improve coordination between agencies, including between provincial and federal authorities to combat the risks of TF; Law enforcement agencies (LEAs) are identifying and investigating the widest range of FT activities and that TF investigations and prosecutions are directed at designated individuals and entities, and those acting on behalf of or under the direction of the designated persons or entities.

In addition, he said that FT prosecutions result in effective, proportionate and dissuasive sanctions and improve capacity and support for prosecutors and the judiciary and demonstrate the effective implementation of selective financial sanctions (backed by a comprehensive legal obligation) against 1,267 and 1,373 designated terrorists and those acting for or on their behalf, including prevention of collection and transfer of funds, identification and freezing of assets (movable and immovable) and prohibition of access to funds and financial services.

The FATF said that Pakistan is demonstrating the application of the law against violations of TF, including administrative and criminal sanctions, and that provincial and federal authorities cooperate in cases of law enforcement; demonstrating that facilities and services owned or controlled by designated persons are deprived of their resources and the use of resources.

But the statement says that all the terms of the action plan have already expired.

Published on Dawn, October 19, 2019

Source: https://www.dawn.com/news/1511678/pakistan-escapes-fatf-blacklist-but-gets-warning

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