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Wednesday, February 8, 2023

As FATF’s Plenary begins, Pakistan’s progress to be reviewed!

As the Plenary begins, Pakistan's case seems to be much stronger, with ICRG's recent report stating the fact that Pakistan has complied with 26 out of 27 demands. It is worth mentioning that in February, Pakistan had only complied with 24 such demands showing great progress.

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The June 2021 FATF Plenary’s virtual meeting is scheduled from 21st to 25th June, making it an important week that will determine Pakistan’s future.

FATF International Cooperation Review Group (ICRG) has finalized its preliminary report on a 27-point action plan given by the Paris-based IGO.

According to various news sources, Pakistan has completed its action on 26 out of 27 points.

Pakistan’s performance was reviewed recently at a virtual meeting of the ICRG’s observer group, which includes the U.S., U.K., China, France, and India.

According to some national media reports, the government is still of the view that Pakistan might still remain on the grey list as it might take some time till the last point is implemented upon.

This can be the Mutual Legal Assistance (MLA) agreement, on which the APG had downgraded Pakistan to “non-compliant” from “partial compliant” in its recent report.

Pakistan was added to FATF’s grey list or formally known as “jurisdictions under increased monitoring”, in June of 2018, because it failed to properly curb terror financing and money laundering in the country.

The country was supposed to have taken the action on the 27 points by 2019, but the program has been extended for two years to come to this point today.

Read More: EU supports Pakistan’s talks with FATF

In the last plenary in February, the FATF extended the deadline to June 2021, and Pakistan was to remain on the grey list.

After the Plenary, FATF president Dr. Marcus Pleyer said during a press briefing on 25th February that Pakistan had made important progress, while some serious flaws in mechanisms to plug terrorism financing remained.

President FATF added that Pakistan would be under heavy monitoring until the three issues related to non-state-actors or terrorists are solved. He added that the issues must be completely addressed to remove Pakistan from the list.

However, the intergovernmental task force in February 2021 recognized Pakistan’s commitment since June 2018 to address the highlighted issues. The President said that the government has strengthened its financial regulations against money laundering and terror financing-related deficiencies.

Fast forward to June 2021, FATF’s regional affiliate, the Asia Pacific Group (APG) in a report on 4th June, improved Pakistan’s rating on 31 of the 40 technical recommendations of the Financial Action Task Force (FATF) against money laundering.

The FATF report said, “The APG welcomes the steps that Pakistan has taken to improve its technical compliance.”

Pakistan’s social media space has been flooded with a chart that shows many countries and compliance data and shows Pakistan as among the largely complying nations. People have been arguing that if Pakistan is still not removed from the grey list, it would hamper the credibility of FATF rather than Pakistan.

Read More: Pakistan makes progress on 26 points out of the 27-point FATF Action Plan

This plenary will have a huge impact on Pakistan, as the current budget according to the government is supposed to attract investment in the country, and with Pakistan on the watchlist like FATF, the policies would remain inefficient as the investors would continue seeing the country as unstable and would harm the aims and goals set by the government for the upcoming fiscal year.

It must be mentioned that the European Union (EU) on Friday welcomed the progress made by Pakistan in the implementation of the Financial Action Task Force (FATF) and its commitment to continue the engagement with the FATF to address all of the remaining issues.

Read More: FATF’s APG appreciates Pakistan’s efforts, rating improved!!

EU also appreciated Pakistan’s efforts towards full implementation of the 27 international conventions stipulated under the EU’s unilateral trade preferences scheme, the Generalised Scheme of Preferences Plus (GSP+).