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Pakistan remains in FATF Grey List

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ISLAMABAD, Pakistan: Irrespective of making “significant progress” and implementing 26 out of 27 points as demanded by the Financial Action Task Force (FATF), Pakistan will still remain in the FATF Grey List.

Even once Pakistan fulfills all the FATF requirements, it will have to go to the onsite assessment process also; therefore, it looks difficult for Islamabad to come out of the grey list soon in the current year.

The decision to retain Pakistan in the grey list was announced by the FATF President Dr Marcus Pleyer on Friday following the end of its five-day virtual plenary meeting in Paris.

“Pakistan has made significant progress and it has largely addressed 26 out of 27 items on the action plan it first committed to in June 2018,” Dr Marcus Pleyer said.

In its virtual plenary, the FATF discussed Pakistan’s progress report on 2018 Action Plan and Post Observation Period Report.

On technical compliance, the FATF appreciated Pakistan’s commitment and efforts in seeking upgrades in a number of recommendations and expected that Pakistan would continue the same momentum.

However, after discussion, the financial watchdog decided to retain the status quo for Pakistan for the remaining one action plan item.

The FATF concluded that Pakistan should continue to work to address its strategically important Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) deficiencies, namely by:

(1) Enhancing international cooperation by amending the Mutual Legal Assistance (MLA) LAW;

(2) Demonstrating that assistance is being sought from foreign countries in implementing UNSCR 1373 designations;

(3) Demonstrating that supervisors are conducting both on-site and off-site supervision commensurate with specific risks associated with Designated Non-Financial Businesses and Professions (DNFBPs), including applying appropriate sanctions where necessary;

(4) Demonstrating that proportionate and dissuasive sanctions are applied consistently to all legal persons and legal arrangements for non-compliance with beneficial worship requirements;

(5) Demonstrating an increase in ML investigations and prosecutions and that proceeds of crime continue to be restrained and confiscated in line with Pakistan’s risk profile, including working with foreign counterparts to trace, freeze, and confiscate asset; and

(6) Demonstrating that DNFBPs are being monitored for compliance with proliferation financing requirements and that sanctions are being imposed for non-compliance.

Pakistan was put on the grey list by the Paris-based FATF in June 2018 and since then, the Country has been struggling to come out of it.

Pakistan is confident that the remaining action item would be completed before the FATF’s next plenary meeting scheduled in October 2021.

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