FATF praises Pakistan’s progress, but says last remaining action item should be addressed

The Financial Action Task Force (FATF) has said that it recognizes Pakistan’s enhancement and efforts to address issues in its country’s action plan.

That is combating the financing of terrorism and has encouraged it to continuous improvement and address as soon as possible “the one remaining CFT-related item”.

Addressing a press conference after the June 21-25 full meeting concluded in Paris, FATF President Dr. Marcus Pleyer said that Pakistan remains under “increased monitoring”.

“Pakistan’s continued political commitment has led to significant progress across a comprehensive CFT action plan”. FATF stated in a statement.

“The FATF recognizes Pakistan’s progress and efforts to address these CFT action plan items and notes that since February 2021, Pakistan has made progress to complete two of the three remaining action items on demonstrating that effective, proportionate, and dissuasive sanctions are imposed for TF (terror financing) convictions and that Pakistan’s targeted financial sanctions regime was being used effectively to targeted terrorist assets,” the statement read.

Whereas, FATF distinguished that Pakistan has now completed 26 of the 27 action items in its 2018 action plan.

“The FATF encourages Pakistan to continue to make progress to address as soon as possible the one remaining CFT-related item by demonstrating that TF (terror financing) investigations and prosecutions target senior leaders and commanders of UN-designated terrorist groups,” said the statement.

“Pakistan has made progress to address a number of the recommended actions […] and provided further high-level commitment in June 2021 to address these strategic deficiencies pursuant to a new action plan that primarily focuses on combating money laundering”, stated the anti-money laundering watchdog.

The FATF has defined six areas where Pakistan should continue to work to address its tactically important AML/CFT deficiencies:

(1) Enhancing international cooperation by amending the MLA law;

(2) Demonstrating that assistance is being sought from foreign countries in implementing UNSCR 1373 designations;

(3) Demonstrating that supervisors are conducting both on-site and off-site supervision commensurate with specific risks associated with DNFBPs, including applying appropriate sanctions where necessary;

(4) Demonstrating that proportionate and dissuasive sanctions are applied consistently to all legal persons and legal arrangements for non-compliance with beneficial ownership requirements;

(5) Demonstrating an increase in ML investigations and prosecutions and that proceeds of crime continue to be restrained and confiscated in line with Pakistan’s risk profile, including working with foreign counterparts to trace, freeze, and confiscate assets; and

(6) Demonstrating that DNFBPs are being monitored for compliance with proliferation financing requirements and that sanctions are being imposed for non-compliance.

On the contrary, Pakistan was confident that acquiescence in 26 out of 27 conditions in the Country Action Plan would deliver adequate grounds for its exit from the Task Force’s grey list.

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