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Pakistan

Pakistan compliant in 35 out of 40 recommendations in APG action plan

  • Is now rated 'compliant' or 'largely compliant' in an additional 4 points
  • APG says country will continue to report back on progress
14 Aug, 2021

Pakistan is now 'compliant' or 'largely compliant' in 35 of the 40 recommendations put forth by the Asia Pacific Group (APG) on Money Laundering, revealed its follow-up Mutual Evaluation Report (MER), an upgrade from the previous assessment in which the country met 31 out of the 40 points in the action plan.

However, the country will stay on the "enhanced follow-up", and continue to report back to the APG.

Pakistan has to meet all deficiencies identified in the APG action plan as well as one remaining item in the Financial Action Task Force (FATF)'s action plan to move off the 'grey list'.

"Pakistan has 35 Recommendations rated C/LC (compliant/largely compliant)," said the APG in the '3rd Follow-Up Report Mutual Evaluation of Pakistan July 2021'.

"Pakistan will remain on enhanced follow-up, and will continue to report back to the APG on progress to strengthen its implementation of AML/CFT (anti money-laundering/combating the financing of terrorism) measures. Pakistan’s fourth progress report is due 1 February 2022."

FATF: Pakistan’s progress to be reviewed

Minister for Energy Hammad Azhar, who heads the Pakistani delegation at the FATF, also lauded the development. He said that with the latest APG assessment Pakistan has now joined a select group of countries with a high level of compliance.

"Pakistan has made good progress in addressing the technical compliance deficiencies identified in its MER and has been re-rated on R.10, R.18, R.26 and R.34. Recommendation 10 has been re-rated to Compliant, and R.18, R.26 and R.34 to Largely Compliant," added the APG report.

Screenshot of Follow-up Report on Pakistan
Screenshot of Follow-up Report on Pakistan

Pakistan to stay on FATF’s ‘grey list’

Background

In June, Pakistan was retained on the FATF increased monitoring list (grey list), after the global anti-money laundering watchdog said that the country had completed 26 out of the 27 action items in its 2018 action plan.

FATF President Marcus Pleyer had said “all deficiencies” must be addressed if a country wishes to be removed from the increased monitoring list, adding that in Pakistan's case it will have to "largely comply with FATF's 27 action plan items as well as the deficiencies later identified in Pakistan's 2019 APG MER".

With this latest update, Pakistan has another 5 points in the APG action plan, and another 1 remaining item in the FATF action plan.

Pakistan will complete remaining item on FATF's action plan in 3-4 months: Hammad Azhar

While the FATF did not give a timeline to Islamabad, Azhar had said in June that the country would complete the remaining item on the action plan in the next three to four months. On the separate APG's MER action plan, Azhar said Pakistan would address the money-laundering items in the next 12 months.

Pakistan has been on the monitoring list since 2018 along with several other countries with deficiencies in the AML/CFT regime.

In order to be removed from FATF monitoring, a jurisdiction must address all or nearly all the components of its action plan.

Once the FATF has determined that a jurisdiction has done so, it will organise an on-site visit to confirm that the implementation of the necessary legal, regulatory, and/or operational reforms is underway and there is the necessary political commitment and institutional capacity to sustain implementation.

If the on-site visit has a positive outcome, the FATF will decide on removing the jurisdiction from public identification at the next FATF plenary. The concerned jurisdiction will then continue to work within the FATF or the relevant FSRB, through its normal follow-up process, to improve its AML/CFT regime.

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