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Pakistan

All announcements will be made at the press conference: FATF

  • Statement comes as reports start making rounds that Pakistan has been removed from the FATF's increased monitoring list, also known as 'grey list'
Published June 17, 2022
Photo: Reuters
Photo: Reuters
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The Financial Action Task Force (FATF) has categorically stated that all announcements pertaining to the outcome of its plenary meeting will be announced at the press conference today, which is scheduled to be held at 7pm (Pakistan time).

The FATF Plenary started on June 14, and is scheduled to end with the press conference today (June 17).

"All announcements will be made at the press conference," said FATF in an emailed response to Business Recorder earlier on Friday.

Its statement comes as reports started making the rounds that Pakistan has been removed from the FATF's increased monitoring list – also known as the grey-list. The KSE-100 Index, considered widely a benchmark for market performance, also increased over 1.5% during intra-day trading on Friday in expectation that Pakistan would be removed from the grey list, where it was placed in 2018.

Minister of State for Foreign Affairs Hina Rabbani Khar, who is also the chair of Pakistan’s National FATF Coordination Committee and leading the country's delegation in Berlin, tweeted that FATF plenary meetings are continuing.

"FATF will issue a public statement after conclusion of the meetings tonight," said Khar. "Prejudging the outcome or speculative reporting could and should be avoided."

She added that the government has arranged a media briefing at the Ministry of Foreign Affairs on Saturday morning on this issue.

Background

Pakistan’s progress under the 2018 and 2021 FATF Action Plans was expected to be discussed in the meeting, stated the foreign ministry ahead of the plenary. It said it would also review recommendations of the FATF’s International Cooperation Review Group (ICRG).

At its last plenary held in March, the FATF had announced that Pakistan would continue to stay on the grey list.

It had noted at the time that "since June 2018, when Pakistan made a high-level political commitment to work with the FATF and Asia/Pacific Group (APG) to strengthen its Anti-Money Laundering/Combating the Financing of Terrorism (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. The FATF encourages Pakistan to continue to make progress to address, as soon as possible, the one remaining item by continuing to demonstrate that terror financing investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups."

Pakistan was placed on FATF's grey list for deficiencies in its counter-terror financing and anti-money laundering regimes in June 2018.

In October 2021, the FATF plenary had also announced that Pakistan will continue to stay in the increased monitoring list.

Back then, Pakistan had made progress in complying with FATF regulations and completed 30/34 action items. The FATF president had stated that Pakistan has shown high-level political commitment and completed a substantial part of its action items.

In June 2021, Pakistan completed 26 out of the 27 action items in its 2018 action plan.

Expectations

Market experts widely believe that Pakistan has made the required progress to come off the grey list.

“There is a high chance that Pakistan would get off the grey list as the government has proactively implemented a number of measures that address FATF’s concerns,” Saad Hashmey, Executive Director BMA Capital, told Business Recorder earlier.

“It has been four years since Pakistan was put on the grey list,” he said, adding that removal would be a positive development, both for improving the country’s perception as well as for its markets.

Saad Khan, Head of Research at IGI Securities, also said that there is a strong indication in the market, that Pakistan would be removed from the grey-list.

"If it happens, it will ease capital movement-related issues," Khan told Business Recorder. "This would also improve the ease of doing business, especially pertaining to capital market transactions."

Khan said that the removal of the country from the watchdog’s grey-list would also pave the way for investment financing.

How to be removed from FATF's increased monitoring list

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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