- Turkey, Mali, and Jordan were also moved onto the grey-list, announces FATF President Marcus Pleyer
Pakistan will continue to stay in the Financial Action Task Force’s (FATF) increased monitoring list, also known as the grey list, it was announced after the Hybrid FATF Plenary held from October 19 to 21.
Turkey, Mali, and Jordan were also announced to have moved on the grey-list, said FATF President Marcus Pleyer, while addressing the press briefing on Thursday.
In its statement on Pakistan, the FATF said that "since June 2018, when Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counter-terrorist financing-related deficiencies, Pakistan’s continued political commitment has led to significant progress across a comprehensive CFT action plan.
"Pakistan has completed 26 of the 27 action items in its 2018 action plan. While Pakistan has reported some steps, the FATF encourages Pakistan to continue to make progress to address as soon as possible, the one remaining CFT-related item by continuing to demonstrate that TF investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups.
"In response to additional deficiencies later identified in Pakistan’s 2019 APG Mutual Evaluation Report (MER), in June 2021, Pakistan provided further high-level commitment to address these strategic deficiencies pursuant to a new action plan that primarily focuses on combating money laundering.
"Since June 2021, Pakistan has taken swift steps towards improving its AML/CFT regime, including by enacting legislative amendments to enhance its international cooperation framework; demonstrating DNFBP monitoring for PF TFS and DNFBP supervision commensurate with the risks; and applying sanctions for non-compliance with beneficial ownership requirements.
"Pakistan should continue to work to address its other strategically important AML/CFT deficiencies, namely by: (1) providing evidence that it actively seeks to enhance the impact of sanctions beyond its jurisdiction by nominating additional individuals and entities for designation at the UN; and (2) 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 assets."
Pakistan has been on the monitoring list since 2018 along with several other countries with deficiencies in the AML/CFT regime.
In June this year, Pakistan was also retained on the FATF's increased monitoring list after having met 26 of the 27 items on the action plan.
It was also asked to work on "the deficiencies later identified in Pakistan's 2019 Asia Pacific Group (APG) Mutual Evaluation Report (MER)".
Pakistan's finance division issues statement
Meanwhile, the Finance Division, in a statement issued after the FATF Plenary, said Pakistan has completed four of the seven Action Plan Items.
"Pakistan has completed these 4 Action Plan items much before the timelines prescribed by FATF," stated the release. "Progress on remaining three action items is well underway and it is aimed to complete three action items ahead of timelines set by the FATF.
"The Action items that have been completed include amendments in the Mutual Legal Assistance Act, 2020, AML/CFT supervision of Designated Non-Financial Businesses and Professions (DNFBPs), transparency of beneficial ownership information and implementation of Targeted Financial Sanctions for Proliferation Finance by DNFBPs. The remaining action items in 2021 Action Plan include investigation and prosecution of ML cases, confiscation of assets and UN listings."
The FATF will undertake the next review of Pakistan’s progress in February 2022, it added.
"Pakistan is fully committed to completing both its Action Plans in cooperation with FATF and its international partners. The high-level political commitment, which is driving its revamped AML/CFT regime, is widely recognised by international community," added the statement.
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.