FATF's Working Group expresses satisfaction over report

The Financial Action Task Force's (FATF) Working Group has expressed satisfaction while reviewing Pakistan's performance report from October 2019 till January 2020 in compliance with the global illicit financing watchdog's action plan carrying 27 recommendations about the country's anti-money laundering and combating financing of terrorism (AML/CFT) mechanism.

The Pakistani delegation led by the Minister for Economic Affairs Hammad Azhar presented the report in a meeting with the Working Group in Beijing, and explained measures taken and progress made by the country in stopping funding of terrorists and eradication of money laundering since October last year.

Pakistan will be judged by an FATF plenary meeting in February on the basis of the Joint Group's report for a possible exit from the 'grey list' or at least avoiding an entry into the black list.

The group also reviewed answers given by Pakistan in a 650-page report to the global financial watchdog, and it will be considered by the body's meeting starting from Feb. 16 in Paris.

The FATF had demanded Pakistan convict those terrorists who had been associated with the banned outfits and also summoned copies of cases lodged against the banned organisations. Details were also sought about legal steps taken concerning religious seminaries, action against money laundering, and transfer of funds, assets and jewelry in the name of terrorists.

Pakistan had forwarded all required particulars to the FATF while noting that investigations into 700 cases concerning transfer of funds to militants were ongoing.

The FATF had noted 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 has made progress towards improving its AML/CFT regime, including the recent development of its ML/TF risk assessment."

"At the October 2019 plenary, Pakistan reiterated its political commitment to completing its action plan and implementing AML/CFT reforms. Pakistan should continue to work on implementing its action plan to address its strategic deficiencies, including by:

1. Adequately demonstrating its proper understanding of the TF risks posed by the terrorist groups, and conducting supervision on a risk-sensitive basis;

2. Demonstrating that remedial actions and sanctions are applied in cases of AML/CFT violations, and that these actions have an effect on AML/CFT compliance by financial institutions;

3. Demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS);

4. Demonstrating that authorities are identifying cash couriers and enforcing controls on illicit movement of currency;

5. Improving inter-agency coordination including between provincial and federal authorities on combating TF risks;

6. Demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and those acting on behalf or at the direction of the designated persons or entities;

7. Demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions and enhancing the capacity and support for prosecutors and the judiciary;

8. And demonstrating effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1267 and 1373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services;

9. Demonstrating enforcement against TFS violations including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases;

10. Demonstrating that facilities and services owned or controlled by designated person are deprived of their resources and the usage of the resources."