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Gov’t to formulate a list of fake companies owned by Pakistanis

Imran Khan government has started work to comply with the FATF's recent and most challenging points given in the recent plenary. The implementation of these points would tighten the regulations for Pakistanis who have investments abroad.

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National media news claims that the finance ministry has started working on the remaining points identified in the recent FATF plenary a month ago to get Pakistan off the grey list.

92 media news reported that the government will have to cooperate with foreign governments in initiating proceedings against the companies practicing money laundering in Europe and the United States.

Media agency quoted sources in the finance ministry saying that the government will have to form a list of all the fake and ostensibly owned companies owned by Pakistanis in Europe and the US.

The government will reportedly have to formulate new organizations, to bring this into implementation by December 2021.

This comes after Pakistan fell short of fulfilling FATF conditions according to June 2021 plenary.

History

The reason for this decision was work not done on the Mutual Legal Assistance (MLA) agreement, on which the APG had downgraded Pakistan to “non-compliant” from “partial compliant” in its recent report.

The FATF president Marcus Pleyer said that the country still has not reached the international standards of implementing anti-money laundering laws. The president added that the government of Pakistan has to work on putting more and more terrorists on trial.

FATF President also thanked the government of Pakistan for continuous support to the IGO. He said, “I want to thank the Pakistan government for their continued commitment to address the concerns and make the necessary changes they were asked to effect.”

FATF president said that the government has been given a list of action plans to be implemented by Pakistan.

This includes six main action points, including enhancing international cooperation, demonstrating that assistance is being sought from foreign countries in implementing UNSC designations, demonstrating that supervisors are conducting on-site and off-site supervision, demonstrating that proportionate sanctions are applied to all legal persons for non-compliance with beneficial ownership requirements, demonstrating an increase in money laundering investigations, and demonstrating that the non-financial sector is being monitored for compliance with proliferation financing requirements.

The president said in June that in four months’ time the IGO will re-evaluate Pakistan’s progress.

Read More: Pakistan to regulate cryptocurrency industry on FATF advice

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.

In the plenary in February, the FATF extended the deadline to June 2021, and Pakistan remained on the grey 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.

But Pakistan still remains on the grey list despite the government protesting IGO’s decision, and the government has yet to comply with the hardest point regarding the “fake companies”.

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