Pakistan will continue to stay in the Financial Action Task Force’s (FATF) increased monitoring list (grey list), it was announced after the fourth Plenary of the FATF held from June 21 to 25.
“Pakistan has now completed 26 of the 27 action items in its 2018 action plan,” read the statement issued after the fourth Plenary of the FATF.
27 FATF points implemented: Qureshi
“The FATF encourages Pakistan to continue to make progress to address as soon as possible the one remaining CFT (countering the financing of terrorism)-related item by demonstrating that TF (terror financing) investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups.”
It said that it recognises Pakistan’s progress and efforts to address and strengthen its anti-money laundering (AML) and CFT regime, and the country’s continued political commitment has led to significant progress across a comprehensive CFT action plan.
“Since February 2021, Pakistan has made progress to complete two of the three remaining action items on demonstrating that effective, proportionate and dissuasive sanctions are imposed for TF convictions and that Pakistan’s targeted financial sanctions regime was being used effectively to targeted terrorist assets. Pakistan has now completed 26 of the 27 action items in its 2018 action plan.”
In the press briefing, FATF President Marcus Pleyer said “all deficiencies” must be addressed if a country wishes to be removed from the increased monitoring list. “It will be discouraging for other countries if they complete the entire action plan. We treat all countries equally,” said Pleyer when asked if it was going to be discouraging for Pakistan given that it completed 26 of the 27 items in the action plan.
In a standalone comment during the briefing, Pleyer said staying on the increased monitoring list does not have any "legal repercussions".
Answering a question, Pleyer said Pakistan will have to "largely comply with FATF's 27 action plan items as well as the deficiencies later identified in Pakistan's 2019 Asia Pacific Group (APG) Mutual Evaluation Report (MER)".
While the FATF did not give a timeline to Islamabad, Minister for Energy Hammad Azhar later said that the country would complete the remaining item on the action plan in the next three to four months. On the separate APG's MER action plan, Azhar said Pakistan would address the money-laundering items in the next 12 months.
Pakistan has been on the monitoring list since 2018 along with several other countries with deficiencies in the AML/CFT regime.
Earlier this week, Foreign Minister Shah Mahmood Qureshi said that there was "no justification for Pakistan to stay in the grey list given the progress made.
“If they want to keep a sword hanging on Pakistan, then that’s another thing.”
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Background
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.