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Thursday, July 18, 2024

Is Pakistan likely to be removed from FATF grey list?

Is Pakistan likely to be removed from the FATF grey list? A final decision would be announced by the FATF president at the conclusion of the four-day virtual plenary on Feb 25. Read GVS detailed story to understand the background of the case.

The Financial Action Task Force (FATF) committee is to meet once again to evaluate Pakistan’s compliance with the recommendations of the anti-money laundering watchdog. Pakistan expects to come out of the grey list. However, some diplomats and senior officials are of the view that the country may continue to remain in the increased monitoring list (grey list) until June.

A final decision would be announced by the FATF president on the conclusion of the four-day virtual plenary on Feb 25.

Ahead of the plenary, the FATF updated the overall performance of all countries. Based on this update, Pakistan has been shown to improve compliance on two out of 40 recommendations of the FATF on the effectiveness of anti-money laundering and combating financing terror (AML/CFT) systems. It finds Pakistan’s progress non-compliant on four counts, partially compliant on 25 counts, and largely compliant on nine recommendations. Pakistan’s evaluation at the plenary would be based on the 27-point action plan and not on these 40 recommendations.

There are, however, no chances that Pakistan could be put in the blacklist because it has at least three members of the FATF — China, Turkey and Malaysia — who can sustain all pressures against any downgrade.

Pakistan fully complied with 21 out of 27-point action plan last year, leading the FATF to soften its stance from previously aggressive threats and yet it kept it in the grey list in October last year. Following robust progress on anti-money laundering and terror financing laws, rules, regulations and updating inter-agency and inter-provincial cooperation, the FATF narrative shifted towards Islamabad to “demonstrate” seriousness on ground through results and prosecutions.

Read more: FATF: International Lobbying by India Might Retain Pakistan in Greylist

Government established a new Cell

The PTI-led government has established a special unit within the Federal Board of Revenue (FBR) to ensure “timely completion of the FATF action plan” proposed for Pakistan.

Read more: FATF battle: US asks Pakistan take tangible actions against banned orgz

The government has constituted a special unit of the FBR to implement and monitor the implementation of the directives issued by the Financial Action Task Force in its review of Pakistan’s compliance with the proposed measures to curb terror financing and corruption.

What are the 6 FATF points that Pakistan still has to comply with?

What exactly are the 6 FATF points that Pakistan still has to comply with? Nobody seems to know according to a tweet by a renowned journalist. In the Tweet, it is said:

Pakistan should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) demonstrating that law enforcement agencies 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; (2) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions; (3) demonstrating effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists and those acting for or on their behalf, preventing the raising and moving of funds including in relation to NPOs, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services; and (4) demonstrating enforcement against TFS violations, including in relation to NPOs, of administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases.

It is important to note that analysts across the world have accused the FATF of harboring bias, and being a geo-strategic tool of the powerful, and the presence of the Indian lobby makes the accountability process all the more dubious for Pakistan.