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Saturday, April 13, 2024

Pakistan Improved in Countering Money Laundering, Terror Financing, MER’s report

FATF’s affiliated group presented a satisfactory report relating concern's that FATF had with Pakitan. Has the Indian lobby failed to get Pakistan blacklisted? Will Pakistan be able to evade the FATF Blacklist?

In an encouraging development, there seem to be more chances of Pakistan coming out of the Financial Action Task Force’s (FATF) grey list. According to the latest official report, Pakistan made significant improvements in its systems to fight money laundering (ML) and terror financing (TF) as per international standards.

The report comes a week ahead of FATF’s review meetings in Paris (Oct 13-18) that would determine whether Pakistan should remain or move out of the grey list or be put on the blacklist.

A Mutual Evaluation Report (MER) released here on Sunday by the APG — a regional affiliate of the FATF— showed that Pakistan was “non-compliant” on four out of 40 recommendations of the APG on the effectiveness of the anti-money laundering and combating the financing of terrorism (AML/CFT) system.

The report based on Pakistan’s performance as of October 2018 showed that the country was fully “compliant” only on one aspect relating to financial institutions secrecy laws. It was found “partially compliant” on 26 recommendations and “largely compliant” on nine others.

Last month, a 15-member Pakistan delegation, led by Minister for Economic Affairs Division Mohammad Hammad Azhar, attended the two-day meetings with the APG to discuss progress on the FATF action plan. The delegation included representatives from the Federal Board of Revenue, State Bank of Pakistan, Securities and Exchange Commission of Pakistan, National Counter Terrorism Authority (Necta) and Federal Investigation Agency.

The crackdown would continue against banned outfits involved in act of violence & terrorism. Pak has faced the longest war of terror & we are taking actions against it

Mr. Azhar “conveyed the government’s strong commitment to implement the international AML/CFT [anti-money laundering/counter finance terrorism] standards and reaffirmed Pakistan’s unequivocal commitment to work with the international community in the fight against money laundering, terrorism financing, and other financial crimes”, the statement said.

According to details, the FATF plenary will conclude if Pakistan has sufficiently delivered on its 10-point action plan committed at the highest level in June 2018 to fight money laundering and terror financing in order to qualify exit from the grey list or be given some more time to make further progress.

Much of the discussions revolved around Pakistan’s responses to about 127 questions raised by the APG during one of the previous engagements. Islamabad had already shared its answers with the APG and the Bangkok session focused on further clarifications and explanations.


Some of the weak areas about which questions were raised included investments by proscribed organizations through individuals in the black market, including in real estate files and gold, and how the authorities could effectively monitor and control such transactions. Questions were also raised over insufficient coordination among the federal and provincial governments and their agencies over effective control of confiscated assets.

Pakistan is currently being monitored at three different but interlinked levels – the APG, the United States, and the FATF – that would determine the country’s possible exit from the FATF grey list. Given significant progress on its 10 point action plan on 27 different standards, authorities expect to secure a couple of months of grace period to be fully compliant when it comes under the final review of the FATF by mid-October.

Read more: FATF Battle: Islamabad is confident to win despite Indian propaganda

Early last month, Prime Minister Imran Khan had set up a high-powered 12-member National FATF Coordination Committee, led by Minister Azhar to ensure execution of all FATF tasks till December 1. Days later, NACTA declared two more outfits — Hizbul Ahrar and Balochistan Raaji Ajoi Sangar — as proscribed organizations under Section 11-B of the Anti-Terrorism Act, putting their members and activities under surveillance, expanding the list to a total of 73.

FATF Encouraged Pakistan

The FATF encouraged Pakistan on 21st June to complete the signed action plan in time. A plenary meeting of the FATF took place in Orlando, Florida where the progress made by Pakistan so far was also reviewed. “Pakistan was placed by FATF in its compliance document in view of an action plan agreed with Pakistan in June 2018 to strengthen its AML/CFT Regime,” the statement issued by the watchdog stated. The next meeting shall take place in October 2019 to review the same.

Interestingly, Turkey, China, and Malaysia have assured Pakistan of their constant support which has confirmed that Pakistan, despite Indian efforts, cannot be blacklisted. India has been trying to brand Pakistan as ‘terror-sponsoring state’ and ‘state spreading terrorism’ but in Pakistan’s Foreign Minster’s words the smart and intelligent diplomacy of the Prime Minster helped Pakistan defeat India.

Islamabad’s Seriousness

It is believed that the government in Islamabad is serious to get out of the FATF’s gray list, therefore, it has initiated probe against the extremist elements at home. A few days back, due to Indian propaganda against Pakistan out-going FATF head hinted at blacklisting Pakistan for not taking appropriate actions.

As a matter of fact, Pakistani law enforcement agencies have taken more than 40 members including senior leaders of Jaish-e-Muhammad (JeM), into custody in March this year. Former Interior Minister of State Mr. Shehryar Khan Afridi also said that nobody will be allowed to challenge the writ of the state. “Crackdown against members of the banned outfit is part of the National Action Plan. 44 members of these have been arrested so far. The crackdown would continue against banned outfits involved in act of violence & terrorism. Pak has faced the longest war of terror & we are taking actions against it,” he tweeted on Wednesday.

The government has announced to implement the NAP in letter and spirit. Authorities have banned some organizations and arrested several leaders and members of various organizations. Besides, several mosques and religious seminaries have been taken into the control of the state to regulate them.

Read more: Three reviews to evaluate possibility of Pakistan’s exit from FATF grey list

It is important to mention here that Pakistan has announced to take action against all banned organizations operating in the country. According to details, Foreign Office (FO) Spokesperson Dr. Mohammad Faisal announced issuance of the UNSC (Freezing and Seizure) Order, 2019, which is in accordance with the provisions of Pakistan’s UNSC Act of 1948.

The government has also decided to take control over “All kinds of assets and properties of all [banned] organizations”. Pakistan has banned many organizations like Sipah-i-Sahaba (SSP), Ahle Sunnat Wal Jamaat (ASWJ), Lashkar-e-Jhangvi (LeJ), Tehreek-e-Taliban Pakistan (TTP), Tehreek-e-Taliban Swat, Tehrik-e-Nifaz-e-Shariat-e-Mohammadi and Jamat-ul-Ahrar in the past for their involvement in extremism and promotion of terrorism in the country.