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Thursday, May 23, 2024

Pakistan stays in grey list by FATF; plenary appreciates its hard work

FATF appreciates the cooperation by the Pakistani government but says work still needs to be done by June on 3 out of 27 issues. Next plenary conference is in June 2021.

FATF retained Pakistan in the grey-list for another four-months. It said that Pakistan had till 20th June 2021 to comply with the entire action plan.

This was revealed in a virtual press conference by president FATF Dr Marcus Pleyer, following a four-day FATF Plenary held in Paris. Dr. Pleyer said that Pakistan had made overall progress on all issues, however, it has largely achieved 24 out of 27 targets of the action plan.

He said, “As all action plan deadlines have expired, the FATE strongly urges Pakistan to swiftly complete its full action plan before June 2021.” He added that Pakistan will not be attending the plenary held in April but will be partaking in the one in June 2021.

He pointed out the three remaining items Pakistan had to work on, by addressing its strategically significant oversights. He said that country can achieve the target by: (I) demonstrating that TF [terror financing] investigations and prosecutions target persons and entities 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: and (3) demonstrating effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists, specifically those acting for or on their behalf.

Read More: FATF commends Pakistan for making significant progress but keeps it in the grey list

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 inter-governmental task force recognized Pakistan’s commitment since June 2018 to address the highlighted issues. The President said that the government has worked to strengthen its financial regulations against money laundering, terror financing-related deficiencies. He added that Pakistan’s continuous commitment had led to significant progress on Combating the Financing of Terrorism (CFT).

“It is not the time to put the country [Pakistan] on the [FATF] black-list, as Pakistan has committed at the highest level that it would complete its full action plan before June,” he said, adding that all the deadlines have been expired and Pakistan needs to fully comply with the action plan swiftly.

Government’s comments

Hammad Azhar, Minister for Industries and Production and Chairman FATF Coordination Committee, has said that Pakistan has completed almost 90 percent of its current FATF action plan.

He is the one who is leading Pakistan’s delegation at FATF.

He said the action plan given to Pakistan is one of the most comprehensive and challenging ones given to any country, as noted by the FATF members.

However, he said, “FATF has acknowledged Pak’s high-level political commitment since 2018 that led to significant progress.”

At this moment he also applauded the hard work of the teams in different departments dedicated to working on implementing the plan.

Read More: Pakistan makes significant progress on all 27 benchmarks under FATF Action Plan

History of FATF and Pakistan since 2018

The Research Society of International Law, a prestigious private-sector research and policy institution based in Pakistan tweeted yesterday mentioning the timeline of the actions taken by the government to comply with the plan since 2018.

In June 2018, FATF places Pakistan on the list of “High Risk Jurisdictions subject to Enhanced Monitoring” owing to structural deficiencies in AML/CFT (Anti-Money Laundering & Countering the Financing of Terrorism) Frameworks. They say that the failure to comply could result in blacklisting of the country.

On 4th March 2019, Pakistan introduced Statutory Regulatory Orders (SROs) to implement UNSC resolutions 1267 and 1373.

Resolution 1267 targets specific individuals, entities, undertakings or groups and requires member states to freeze without delay the assets owned or controlled by them or by persons acting on their behalf or at their direction.

The UNSC resolution 1373 targets international terrorism in general and goes beyond the UNSCR 1267. It obliges member states to criminalize the financing of terrorism, freeze without delay the funds and other financial assets or economic resources of persons who commit, or attempt to commit, terrorist acts or participate in or facilitate the commission of terrorist acts and lastly prohibit their nationals or other persons and entities within their territories from making any funds or financial or other related services available for the benefit of persons who commit or attempt to commit or facilitate or participate in the commission of terrorism.

During March 2019 Nationwide crackdown (under National Action Plan) on Jaish-e-Muhmmad, Falah-i-Insaniyat Foundation, & Jamat ud Dawah. Sindh, Punjab & Balochistan governments seized & took administrative control over establishments under these organizations. The list of banned outfits was updated.

In October 2019, 65 frozen properties belonging to Jamaat ud Dawa, Falah-i-Insaniat Foundation, and Jaish-i-Mohammad seized under the UNSC 1948 and UNSC Freezing & Seizure Order 2019. Six properties belonging to Tehreek-i-Taliban Afghanistan also seized.

In the same month, the first FATF Plenary Statement came out: Pakistan was Compliant with 5/27 Points, retained on grey-list. Taskforce expressed serious concerns with the overall lack of progress by Pak to address its Terrorism Financing (TF) risks, including poor demonstration of an understanding of transnational TF risks.

In January-February 2020, Pakistan made amendments to key acts like, Foreign Exchange Regulation Act (Amendment) Bill 2020; Mutual Legal Assistance (Criminal Matters) Bill 2020; Amendments to the ATA 1997 (2020); and Amendments to AMLA 2020.

In February 2020, in yet another plenary statement, Pakistan was retained on the grey-list. Was compliant with 14 out of 27 points. FATF expressed concerns given the country’s failure to complete its action plan in line with the agreed timeline and in light of the TF risks stemming from it.

Read More: Op-ed: Political considerations determine voting behavior at FATF

During February-September 2020, Pakistan conducted operations against terrorist groups leading to the seizing of Mulla Akhtar Mansour’s properties in Karachi worth over PKR32 million. CTD Punjab arrested suspected terrorists in Gujranwala and Sindh government decided to register all madrassas as educational institutions to minimize security risks.

Also, during this time several legislative actions were taken under anti-money laundering and Combating the Financing of Terrorism regulations. Parliament passes 15 laws based on #FATF recommendations, leading to changes to Anti-Terrorism Act, 1997 and the Anti-Money Laundering Act, 2010.

In October 2020 plenary statement by FATF, Pakistan was Compliant with 21/27 Points, retained on the grey-list.

From October 2020 – February 2021, the Pakistani government had a Multi-focal administrative response. More than 30 guidelines/rules/regulations were issued by regulatory bodies such as the State Bank of Pakistan, Securities & Exchange Commission of Pakistan, Federal Board of Revenue, Ministry of Foreign Affairs, Ministry of Finance to operationalize the legislative changes

On 25th February 2021 FATF Plenary Statement said that Pakistan is Compliant with 24/27 Points, retained on grey-list. The government has been given time till June 2021 to achieve compliance with the remaining 3 Action Points.