Pakistan to stay on FATF grey list: Marcus

Despite ‘considerable progress’

| Paris-based financial watchdog will review country’s progress in Feb 2022 | Dr Marcus Pleyer admits Pakistan addressed 30 out of 34 items on two concurrent action plans | FATF has recognised considerable progress made by Pakistan: Ministry of Finance

FATF President denies Modi-govt intervention, claims decision made by consensus

ISLAMABAD/PARIS    -  The Financial Action Task Force (FATF) Thursday reviewed Pakistan’s progress on FATF Action Plans in its plenary meeting and later announced that the country will remain on its increased monitoring list, also dubbed as the grey list.

Pakistan has been on the grey list for deficiencies in its counter-terror financing and anti-money laundering regimes since June 2018.

FATF president Marcus Pleyer said the decision was taken at the conclusion of the three-day virtual plenary of the organisation. Pakistan continues to remain on “increased monitoring list”, Marcus said at a virtual press conference from Paris. “Increased monitoring list” is another name for the ‘grey list’.

“Pakistan has taken a number of important steps but needs to “further demonstrate that investigations and prosecutions are being pursued against the senior leadership of UN-designated terror groups,” Marcus said.” The FATF had given Islamabad a 27-point action plan that was to be completed by October 2019. Six more points were added later. 

Dr Marcus Pleyer said that Pakistan had to complete two concurrent action plans with a total of 34 items. “It has now addressed or largely addressed 30 of the items,” he said. “Its most recent action plan from June this year, which largely focused on money laundering deficiencies, was issued after the FATF’s regional partner — the Asia Pacific Group — identified a number of serious issues.

Overall, Pakistan is making good progress on this new action plan. Four out of the seven items are now addressed or largely addressed.” He said this included showing that financial supervisors are conducting on-site and off-site checking on non-financial sector businesses and enacting legislative amendments to improve international cooperation.

‘Decision made by consensus’

Responding to a question about an Indian minister’s claims that the Modi government had ensured that Pakistan remained on the ‘grey list’, Dr Pleyer said that the FATF is a technical body and “we take our decisions by consensus [...] so it’s not only one country that makes decisions.”

Following the last plenary session in July, India’s Minister for External Affairs S Jaishankar said the Modi-led Bhartiya Janata Party (BJP) government had ensured that Pakistan remained on the FATF grey list.

Refusing to comment on the Indian’s minister’s remarks, Dr Pleyer said that the FATF consists of 39 jurisdictions and the decisions on Pakistan are all taken by consensus.

‘FATF has recognised considerable progress’

The Ministry of Finance said that the FATF reviewed Pakistan’s progress on FATF Action Plans in its plenary meeting held on 21st October 2021. The FATF has recognised considerable progress made by Pakistan on both the Action Plans. With regard to the 2021 Action Plan, Pakistan has completed four of the seven Action Plan Items. Pakistan has completed these four Action Plan items much before the timelines prescribed by FATF. While progress on remaining three action items is well underway and it is aimed to complete three action items ahead of timelines set by the FATF.

The Action items that have been completed include amendments in the Mutual Legal Assistance Act, 2020, AML/CFT supervision of Designated Non-Financial Businesses and Professions (DNFBPs), transparency of beneficial ownership information and implementation of Targeted Financial Sanctions for Proliferation Finance by DNFBPs. The remaining action items in 2021 Action Plan include investigation & prosecution of ML cases, confiscation of assets and UN listings.

Regarding the 2018 Action Plan, Pakistan submitted a comprehensive progress report on the last remaining Action Plan item. The FATF acknowledged Pakistan’s continued political commitment, which led to significant progress across a comprehensive CFT Action Plan and encouraged Pakistan to report further progress on investigation and prosecution.

The Plenary meeting decided to maintain status quo with respect to Pakistan, for the time being. Considerable work has already been carried out on remaining items of both Action Plans. FATF will undertake next review of Pakistan’s Progress in February 2022.

The FATF Plenary meetings were held virtually from 19-21 October 2021, where its members discussed a variety of topics including Pakistan’s progress. The Pakistan delegation was led by Mr Muhammad Hammad Azhar, Federal Minister for Energy / Chairman National FATF Coordination Committee.

Pakistan is fully committed to completing its both Action Plans in cooperation with FATF and its international partners. The high-level political commitment, which is driving its revamped AML/CFT regime, is widely recognized by international community.

Turkey, Jordan and Mali placed on grey list

Commenting on the various other decisions taken during the plenary meeting, the FATF president said that Botswana and Mauritius had been taken out of the financial watchdog’s grey list.

He said that Zimbabwe had completed its action plan and was awaiting on-site inspection, which would be carried out once the Covid-19 situation allowed.

Dr Pleyer also announced that Jordan, Mali and Turkey had been added to the list and had all agreed to action plans.

He said that an assessment was carried out on Turkey in 2019 which outlined serious issues regarding money laundering and terror financing. “Turkey has made progress in some areas, but issues remain,” he said, adding that it needed to show it is effectively addressing money laundering cases and terror financing.

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