FATF challenge: Significant progress made: Baqir

Dr Reza Baqir Governor State Bank of Pakistan (SBP) said on Saturday that Pakistan has made significant progress on the action plan of Financial Action Task Force (FATF) to get out of the grey list and the country's efforts have also been endorsed by the International Financial Institutions, including FATF and the IMF.

Addressing as key note speaker at the 2nd Financial Crime Summit "Pakistan's FATF Way Forward: Transforming the National Financial Crime Landscape" held Saturday, Governor SBP said that the country has zero tolerance to terror financing and a number of steps have been taken to eliminate the trade-based money laundering. "As part of efforts against money laundering, the SBP has also frozen a number of bank accounts," he maintained.

He said money laundering and the FATF is a very important area for the country as well as for the SBP and during last one year, substantial progress has been made in this area to meet the action plan items set by FATF. The progress is in the right direction and even FATF in its own assessment has recognized the progress made by Pakistan during May to September 2019, he added.

"FATF and the IMF in their reviews have endorsed that Pakistan has made significant and substantial progress relating to money laundering and FATF recommendations," he added.

He said the SBP is still putting in more efforts in the remaining areas and recently amended the Framework for Managing Risks of Trade Based Money Laundering and Terrorist Financing to curb the trade-based terror financing. "With these amendments, the trade-based terror financing is impossible," he said.

Baqir said the SBP and all banks are making serious efforts towards ensuring that Pakistan is out of the grey list in the next meeting of FATF. "Pakistan itself is a major victim of terrorism, therefore, we will be a major beneficiary of all these measures against the terror financing more than any other country," he added.

The Governor SBP urged the financial institutions to ensure efficient use of technologies for monitoring of financial transactions.

Talking about the economic development, Baqir said that the country's economic indicators are showing positive developments. Current account deficit was surplus in October, exchange rate is stable and foreign exchange reserves are gradually increasing.

He said previously some exchange rate restrictions were imposed due to the balance of payment crisis and now the SBP is gradually relaxing these conditions to support the domestic manufacturing sector. Recently, the SBP allowed banks to make advance payment up to 50 percent of the value of imports against LC for manufacturing concerns.

Foreign investor confidence on Pakistan's economy has also restored due to government's economic reform programme, he added.

The Governor SBP appreciated the efforts of the organizers of the summit saying that FATF tops the agenda of the SBP and the presence of top SBP officials and other leading bankers supports this assertion.

Ibrahim Amin, Chairman Dellsons informed the audience that the 2nd Financial Crime Summit was jointly organized by Dellsons Associates and Knowledge Partners A F Ferguson & Co (a member firm of PwC Network. The basic aim of this conference is to put together knowledge sharing and capacity building events for the banking and financial service community, pertaining to a wide range of key topical considerations.

He said that the summit is the continuation of a series of such events, organized in the recent past in the wake of Pakistan's FATF evaluations. He appreciated the role of the State Bank of Pakistan in responding to money laundering challenge posed to the country.

The conference was also attended by a number of stakeholders including senior bankers, technology service providers, senior representatives of microfinance banks, exchange companies, insurance companies, asset management firms and brokerage houses.

Key focus areas of the conference were, understanding key FATF concerns and action plans, financial crime (including terrorist financing) risk assessment, trade and asset based ML/TF risks, deeper institutional transformation strategies, de-risking and associated challenges, financial intelligence, Correspondent banking expectations, alert identification, investigations and reporting, emerging technologies including RegTech, performance and accountability legal and regulatory landscape.