| FATF chief Dr Marcus Pleyer says Islamabad has now largely addressed all 34 action plan items, will be removed from grey list after onsite inspection | FATF decision will pave way for international investments to Pakistan: Hina Khar


ISLAMABAD    -   Financial Action Task Force (FATF) declared yesterday that Pakistan has completed its two concurrent action plans with a total of 34 items, which would pave way for Islamabad to remove from its grey list after onsite inspection to gauge the performance of the country.

“At its June 2022 Plenary, the FATF made the initial determination that Pakistan has substantially completed its two action plans, covering 34 items”, said FATF in a statement received here from Berlin. “And warrants an on-site visit to verify that the implementation of Pakistan’s AML/CFT reforms has begun and is being sustained, and that the necessary political commitment remains in place to sustain implementation and improvement in the future”.

The FATF will continue to monitor the COVID-19 situation and conduct an on-site visit at the earliest possible date. Since June 2018, according to FATF, Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counter-terrorist financing-related deficiencies, Pakistan’s continued political commitment to combating both terrorist financing and money laundering has led to significant progress. In particular, Pakistan demonstrated that TF investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups and that there is a positive upwards trend in the number of ML investigations and prosecutions being pursued in Pakistan, in line with Pakistan’s risk profile. In addition, Pakistan also largely addressed its 2021 action plan ahead of the set times.

According to officials, Pakistan will submit its progress report in the first week of July to the FATF. Then, the FATF team will then make on-site visits to Pakistan in and hold meetings with relevant government departments. The on-site inspection team will submit its report to the FATF and on the basis of on-site team report, the FATF will announce the decision of keeping or removing Pakistan from the grey list in the next plenary, likely in October this year.

FATF President Dr Marcus Pleyer, addressing a press conference after the plenary meeting in Berlin, Germany, noted that Pakistani authorities have done a lot of work. “I’m glad to say that they have now largely addressed all 34 action items from their combined two action plans. Pakistan is not being removed from grey list today. The country will be removed from the list if it successfully passes the on-site visit,” said Dr Pleyer.

He further said that Pakistan will have to ensure [during the visit] that it effectively tackled money laundering and funding of terrorist groups.

It is worth mentioning here that Pakistan has been on the grey list of the Paris-based Financial Action Task Force (FATF) since June 2018 for failing to check money laundering, leading to terror financing, and was given a plan of action to complete it by October 2019. Since then, the country continues to be on that list due to its failure to comply with the FATF mandates. Later, another action plan was given to Pakistan. Pakistan had to complete two concurrent action plans with a total of 34 items. Under the 2018 action plan of the FATF, the country had to implement 27 points while it met seven points under the 2021 action plan.

Meanwhile, according to the Ministry of Foreign Affairs, FATF has acknowledged the completion of Pakistan’s both Action Plans (2018 and 2021) and has authorized an onsite visit to Pakistan, as a final step to exit from the FATF’s grey list. The FATF members while participating in the discussion on Pakistan’s progress congratulated Pakistan for completing both Action Plans covering 34 items, and especially on the early completion of the 2021 Action Plan in a record timeframe. Pakistan continued its relentless efforts towards successful completion of these Action Plans despite many challenges including the COVID 19 pandemic.

Pakistan has covered a lot of ground in the AML/CFT domain during implementation of FATF Action Plans. The engagement with FATF has led to the development of a strong AML/CFT framework in Pakistan and resulted in improving of our systems to cope with future challenges.

FATF reviewed Pakistan’s progress on FATF Action Plans in its Plenary meetings held in Berlin on 13-17 June 2022. Pakistan delegation, which attended FATF Plenary meetings in Berlin, was led by Hina Rabbani Khar, Minister of State for Foreign Affairs / Chairperson National FATF Coordination Committee.

Soon after the development, Minister of State for Foreign Affairs Hina Rabbani Khar congratulated the country, saying the international community had “unanimously” acknowledged the country’s efforts. “Our success is the result of four years of a challenging journey. Pakistan reaffirms resolve to continue the momentum and give our economy a boost,” she said.

The economic experts noted that decision would boost the economy, as the foreign investments had declined in the country following the decision to keep Pakistan on FATF’s grey list. They said that foreign investments and trade would come to the country once Pakistan’s name is removed from the grey list.

FATF teams will undertake ‘onsite visit’ soon to check sustainability and irreversibility of AML/ CFT Systems in Pakistan by September 2022, which will lead to white listing by October 22.

India tried its level best to Blacklist Pakistan but Pakistan Army foiled this conspiracy. According to the officials, all state institutions have played their role in implementing FATF actions plans. A special cell at GHQ headed by DGMO was established in 2019 on the orders of Army Chief Gen Qamar Javed Bajwa after consultation with the government. When the GHQ cell took over the responsibility, only 5 points were completed. This cell established comprehensive mechanism between more than 30 departments, ministries and agencies and ensure implementation of these policies. The GHQ cell has formulated a comprehensive strategy and a detailed roadmap to address the concerns of FATF and completed its Action Plan, well before the timelines set by FATF, i.e. January 2023.

In terror financing Pakistan implemented 27 out of 27 points and 7 out of 7 points of money laundering. Together both action plan points become 34 implemented by Pakistan.

This action plan of Anti- Money laundering and counter terrorist financing (CTF) took four years for complete implementation by Pakistan.

In Pakistan 800 money laundering cases were  reported and investigation of these cases were completed in the last 13 months by various institutions.

Under the FATF plan,71 per cent of assets which were confiscated under the anti-money laundering action.

Pakistan did legislation and passed money laundering act 2020 and took action on 26,630 complaints.

Pakistan has enacted standalone MLA Act 2020 with substantial increase in processing of formal/ informal Mutual Legal Assistance (MLA) requests. Pakistan has processed a total of 26,630 international cooperation requests. FBR has established a dedicated Designated Non Financial Business and Professions (DNFBP) directorate to monitor AML/CFT compliance by real estate agents and jewellers operating in the country. The FBR has undertaken massive activity verifications of more than 22,000 potential DNFBPs and imposed monetary penalties worth Rs. 351 million over non-compliance. FBR has completed offsite supervision of more than 1,700 DNFBPs, and in process to include real estate sector under the folds of Compliance.

Securities and Exchange Commission of Pakistan (SECP) has completed its enforcement actions on all types of legal persons and arrangements. A total of 146,697 legal persons/ legal arrangements (LPLAs) were inspected and penalties worth Rs. 2,388 million were imposed on con-compliant LPLAs.