EDITORIAL: The Financial Action Task Force (FATF) has decided to keep Pakistan on the grey list with the government team led by federal minister Hammad Azhar highlighting the four-month extension for implementation of the remaining three of the 27 items of the action plan indicative of 90 percent implementation as an achievement; critics however point to the serious challenges to the implementation of these three remaining items given that the focus is not on the passage of legislation, relatively easy, but on demonstrating: (i) that terror financing (TF) investigations and prosecutions target persons and entities acting on behalf or at the direction of the designated persons or entities, (ii) that TF prosecutions result in effective proportionate, and dissuasive sanctions, and (iii) effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists specifically those acting for or on their behalf.
The FATF acknowledges on its website that it “takes note of the significant progress made on the entire action plan. To date, Pakistan has made progress across all action plan items and has now largely addressed 24 of the 27 action items. As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan before June 2021.” However, irrespective of progress Pakistan remains on the grey list and one would hope that a more sustained effort is made to ensure that we are no longer one of 19 countries under increased monitoring by the FATF come June.
Legislation in Pakistan can be compared favourably with Western democracies; however, we continue to face serious implementation issues on nearly all public interest litigations that maybe linked to geopolitical considerations, to interest groups who effectively stall any effort towards implementation and last but not least to a failure to strengthen prosecution.
Administration after administration has had to deal with poor capacity of the prosecution branch, and sadly there is little indication that the PTI administration has made any meaningful effort to strengthen this critical area where the State institutes and carries on criminal proceedings in court. True that existing staff cannot be dismissed as per their terms of employment; however, there is a need to expedite and strengthen the recruitment drive of public prosecutors on merit that would not only satisfy the FATF but also facilitate the government in getting court verdicts against a rising number of persons charged with corruption and money laundering.
What must be of considerable concern to the government is the fact that the International Monetary Fund (IMF), as per its website, “is contributing to global AML/CFT efforts in several important ways. As a collaborative institution with near universal membership, the IMF is a natural forum for sharing information, developing common approaches to issues, and promoting desirable policies and standards. The Fund has dedicated AML/CFT expertise. Two departments carry out the IMF’s AML/CFT efforts: the Monetary and Financial Systems Department and the Legal Department.” And in the July 2019 document after approval by its Board of the 6 billion dollars extended fund facility, the IMF noted that “the authorities are stepping up efforts to implement all measures committed to in an action plan with the FATF (end-October 2019 structural benchmark) to support the country’s exit from the FATF list…the authorities will work with technical assistance providers, including the IMF to complete the action plan and further strengthen the effectiveness of the AML/CFT regime.”
There is a widely held perception reinforced by the government narrative that the prospect of slipping into the blacklist no longer exists as the government has satisfactorily ensured that through its compliance of FATF conditions. This certainly is a matter of great relief and the government merits recognition and appreciation for its efforts. However relieved we may be but we must not forget that we have to ensure our movement out of the grey list too to protect and preserve our economic and political interests and this battle is yet to be won. Therefore, we can not afford to be complacent and must continue to act with the same passion and commitment to achieve our removal from the grey list too.
Copyright Business Recorder, 2021