Country asked to complete action plan by June 30: 'Grey list' status maintained

While noting recent and notable improvements, the Financial Action Task Force (FATF) has again expressed its concerns given Pakistan's failure to complete its action plan in line with the agreed timelines and in light of the TF risks emanating from the jurisdiction.

Outcome of the FATF Plenary February 19-21 meeting noted that to date, Pakistan has largely addressed 14 of 27 action items, with varying levels of progress made on the rest of the action plan. The FATF strongly urges Pakistan to swiftly complete its full action plan by June 2020.

The FATF added that since June 2018, when Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its Anti-Money Laundering (AML)/Combating the Financing of Terrorism (CFT) regime and to address its strategic counter-terrorist financing-related deficiencies, Pakistan's political commitment has led to progress in a number of areas in its action plan, including risk-based supervision and pursuing domestic and international cooperation to identify cash couriers.

Pakistan should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) demonstrating that remedial actions and sanctions are applied in cases of AML/CFT violations, relating to TF risk management and TFS obligations; (2) demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS); (3) demonstrating the implementation of cross-border currency and bearer-negotiable instruments (BNI) controls at all ports of entry, including applying effective, proportionate and dissuasive sanctions; (4) 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; (5) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions (6) 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; (7) demonstrating enforcement against TFS violations including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases; (8) demonstrating that facilities and services owned or controlled by designated person are deprived of their resources and the usage of the resources.

The meeting also noted that all deadlines in the action plan have expired and the FATF strongly urges Pakistan to swiftly complete its full action plan by June 2020.

Otherwise, should significant and sustainable progress especially in prosecuting and penalising TF not be made by the next plenary, the FATF will take action, which could include the FATF calling on its members and urging all jurisdiction to advise their FIs to give special attention to business relations and transactions with Pakistan. ZAHEER ABBASI

The Pakistan delegation was led by Minister for Economic Affairs Division Hammad Azhar.

During the last reporting period, Pakistan had made a significant progress in the implementation of the FATF Action Plan, which has been demonstrated by the completion of nine additional action items. The FATF reviewed progress made by Pakistan towards implementation of the Action Plan, while acknowledging the steps taken by Pakistan towards implementation of Action Plan and welcoming its high-level political commitment.

The FATF highlighted the need for taking further actions for completing the Action Plan by June 2020. The FATF members agreed to maintain Pakistan's status on compliance document, normally described as the 'Grey List'. The Government of Pakistan stands committed to taking all necessary action required for completing the remaining items in the Action Plan.

A strategy in this regard has been formulated and is being implemented. The FATF will undertake the next review of Pakistan's progress in June 2020.-PR

Meanwhile, a Chinese Foreign Ministry's Spokesperson on Friday rejected Indian media reports about any shift in China's position and said that the Chinese side had always backed Pakistan at the Financial Action Task Force (FATF). "China's position on the relevant issue remains unchanged," Chinese Foreign Ministry Spokesperson Geng Shuang said during his online briefing held in Beijing.

He said that Pakistan had made enormous efforts in improving its counter-terror financing system, which had been recognized by the vast majority of FATF members at its latest plenary meeting concluded on February 20 in Paris.

"It was decided at the meeting that Pakistan will be allowed more time to continue implementing its action plan," he added. He said that China maintained that the purpose and aim of the FATF was to support countries efforts to strengthen institutions against money laundering and terror financing and safeguard international financing system.

"We stand ready to work with relevant parties to offer more assistance to Pakistan in this area," he added. It may be mentioned that Indian media reported on February 20 that China had agreed to join India and other countries in sending a strong message to Pakistan and urging it to fulfill commitment to fight terror financing and money laundering before the plenary session in June.

The report claimed that this symbolized a major shift in China's position since it had been a staunch supporter for Pakistan within the Financial Action Task Force (FATF).