APG to file report on Pakistan’s steps against terror financing – Pakistan

ISLAMABAD: Based on Pakistan's "effective" progress report, the Joint Asia-Pacific Group (APG) will present its assessment of Islamabad's progress in strengthening its systems against money laundering and terrorist financing next month.

"The delegation of Pakistan effectively presented Pakistan's progress in each of the elements of the Financial Action Task Force (FATF) Plan of Action and provided additional information / clarifications to the Joint AP Group," said a brief statement issued by the Ministry of Finance after two days face-to-face meetings with the APG in Bangkok. He said that the APG, according to FATF procedures, would present its report at the plenary and FATF Working Group meetings scheduled for October 13 and 18 in Paris, France.

The FATF plenary will conclude if Pakistan has sufficiently complied with its 10-point action plan committed at the highest level in June 2018 to combat money laundering and terrorist financing in order to qualify to exit the gray list or if you are given more time to advance Progress.

A 15-member delegation in Pakistan, led by the Minister of Economic Affairs Division, Mohammad Hammad Azhar, attended the two-day meetings with the APG to discuss progress in the FATF action plan. The delegation included representatives of the Federal Revenue Board, the State Bank of Pakistan, the Pakistan Securities and Exchange Commission, the National Anti-Terrorism Authority (Necta) and the Federal Investigation Agency.

Evaluation of the Asia-Pacific Group to be placed before the FATF meetings in Paris next month

Mr. Azhar "conveyed the strong commitment of the government to implement the international AML / CFT [anti-money laundering/counter finance terrorism] standards and reaffirmed Pakistan's unequivocal commitment to work with the international community in the fight against money laundering, terrorist financing and other financial crimes, "the statement said.

Informed sources said the delegation informed APG about the government's action against prohibited organizations, particularly the confiscation of its assets and the blockade of the movement and activities of its workers and representatives. The face-to-face sessions also reviewed Pakistan's overall performance against money laundering and terrorist financing and how Pakistan had strengthened its network against the illegal currency movement.

A large part of the discussions revolved around Pakistan's responses to about 127 questions raised by the APG during one of the previous commitments. Islamabad had already shared its responses with the APG and the Bangkok session focused on new clarifications and explanations.

Some of the weak areas on which questions arose included investments of proscribed organizations through individuals in the black market, including real estate and gold archives, and how authorities could effectively monitor and control such transactions. Questions were also raised about insufficient coordination between the federal and provincial governments and their agencies on the effective control of confiscated assets.

Pakistan is currently being monitored at three different but interrelated levels: the APG, the United States and the FATF, which would determine the possible exit of the country from the FATF gray list. Given the significant progress in its 10-point action plan on 27 different standards, the authorities hope to ensure a couple of months of grace to fully comply when it is submitted to the FATF final review in mid-October.

Earlier last month, Prime Minister Imran Khan had established a FATF National Coordination Committee of 12 high-power members, led by Minister Azhar to ensure the execution of all the FATF tasks until December 1. Days later, Nacta declared two more teams: Hizbul Ahrar and Balochistan Raaji Ajoi Sangar – as organizations banned under Section 11-B of the Anti-Terror Law, putting its members and activities under surveillance, expanding the list to a total of 73.

After the thaw in relations between the United States and Pakistan in the wake of the Afghan dialogue, the United States has asked Pakistan to show tangible and satisfactory actions against the forbidden organizations and their leaders to pacify more countries to support their case and leave the gray list of the FATF.

Also last month, the APG on money laundering downgraded Pakistan to the category of "improved monitoring" on technical deficiencies to meet normal international financial standards for October. This means that the country would now be required to submit quarterly, rather than semi-annual, progress reports to the APG, as of February 1, 2020, to show improvements in its technical standards on AML / CFT.

Authorities said Islamabad had made significant progress in the FATF standards and action plans. They said that the strengthening of the AML / CFT laws was a significant advance to merit the removal of the gray list, but parliament had to formally approve them and the president had to promulgate them. These were recently approved by the permanent finance and income committee of the National Assembly.

With the support of the International Monetary Fund and the World Bank, Pakistan has hired technical assistance providers as consultants in key institutions such as the FBR, SECP, SBP and the Financial Monitoring Unit to complete the action plan and further strengthen the effectiveness of the AML / CFT regime.

The permanent committee of the National Assembly has also approved the amendments to the currency regulation laws to restrict the movement of national currency beyond a certain limit to help relevant agencies to curb the practice of Hawala / Hundi and other forms of law of illegal currency transactions.

Posted on Dawn, September 12, 2019