Pakistan

The FATF begins the process of removing Pakistan from the grey list

The FATF begins the process of removing Pakistan from the grey list

The Financial Action Task Force (FATF), an international financial watchdog tasked with combating money laundering and terrorist financing, announced on Friday that it has begun the process of removing Pakistan from the ‘grey list’ after four years of rigorous monitoring of its anti-terrorist financing efforts, effectively ending the threat of Islamabad being blacklisted.

“At its June 2022 Plenary, the FATF made the initial determination that Pakistan has substantially completed its two action plans, covering 34 items,” according to a statement issued by the FATF on Friday.

The worldwide organisation decided on the on-site inspection expedition during its plenary meeting in Berlin, Germany, from June 14 to 17.

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The preliminary finding “warrants an on-site inspection to verify that Pakistan’s AML/CFT reforms have commenced and are being sustained, and that the required political commitment remains in place to ensure implementation and progress in the future,” according to the report.

The FATF will continue to follow the Covid-19 situation and will undertake an on-site visit as soon as feasible, according to the statement, which did not provide a specific date for the visit.

According to Pakistani officials, the FATF will send a mission to the country next month to verify the government’s assertion that it has completely executed all of the 34 conditions established by the FATF in February 2018 and again in June 2021. Pakistan was given 15 months to implement these stipulations, but due to the intricacy of the difficulties, it took nearly four years.

The FATF’s decision will now necessitate commitments from all Pakistani stakeholders to demonstrate to the FATF’s impending mission that the country’s anti-money laundering (AML) and counter-terrorist financing (CFT) regimes are free of severe flaws.

According to the FATF handout, Pakistan has made significant progress in combating both terrorist financing and money laundering since June 2018, when it made a high-level political commitment to work with the FATF and the Asia Pacific Group to strengthen its AML/CFT regime and address strategic counter-terrorist financing-related deficiencies.

Pakistan has proved that terror financing investigations and prosecutions target senior leaders and commanders of UN-designated terrorist groups, and that the number of money laundering investigations and convictions in Pakistan is increasing in keeping with the country’s risk profile.

According to the FATF, Pakistan also completed the majority of its 2021 action plan ahead of schedule.

Pakistani officials have stated that they will submit their progress report to the FATF in the first week of July. The FATF team will then make on-site visits to Pakistan in the last week of July and hold meetings with relevant government departments, according to Pakistani officials.

The on-site inspection team will submit its report to the FATF, and the FATF will announce its decision on whether to keep or remove Pakistan from the grey list in the next plenary based on the report of the on-site team.

Pakistan was placed on the FATF’s grey list in February 2018, with effect from June 2018, and was given a list of 27 conditions to meet in order to be removed off the list.

The FATF also commended Pakistan’s “substantial progress” in completing the essential action items at its most recent plenary conference.

Pakistan had previously fulfilled 26 of the 27 action items in its 2018 action plan, with one point remaining to demonstrate that terror financing investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups.

According to the member countries, including the United States and India, who have circled Pakistan through the FATF platform, the final action item was the most important of all.

The Afghan Taliban, Jamaat-ud-Dawa (JuD), Haqqani Network, Jaish-e-Mohammed (JeM), Lashkar-e-Taiba (LeT), Falah-e-Insaniyat Foundation, al-Qaeda, and the Islamic State have all demanded that Pakistan target eight groups through the FATF forum.

In June 2021, Pakistan provided another high-level commitment to remedy these strategic shortcomings pursuant to a revised action plan that principally focused on countering money laundering, in response to additional deficiencies later highlighted in Pakistan’s 2019 APG Mutual Evaluation Report (MER).

In June of last year, the FATF issued a new six-point action plan, exposing Islamabad to international pressure methods.

Pakistan has made progress in addressing a number of the recommended actions in the 2019 APG Mutual Evaluation Report (MER) and provided a new high-level commitment in June 2021 to address these strategic deficiencies pursuant to a new action plan in response to additional deficiencies later identified in Pakistan’s 2019 APG Mutual Evaluation Report (MER).

Pakistan was asked to continue working to address its strategically important AML/CFT deficiencies by enhancing international cooperation by amending the Mutual Legal Assistance Law and demonstrating that supervisors were conducting both on-site and off-site supervision commensurate with specific risks associated with designated non-financial businesses and persons (DNFBPs), incl.

RELATED: FATF grey list Live Updates: FATF Pakistan’s announcement is expected at 7:00 PM

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Ahmed Khan is a Senior Editor at Pakistan Lounge and joined in July 2021. Formerly News Editor at a Local News website

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