Pakistan’s FATF panel ranking improves
The Asia-Pacific Group on Money Laundering (APG) said that Pakistan’s ranking has improved on 4 out of 40 technical recommendations of the Financial Action Task Force (FATF) on Money Laundering and Terror Financing (AML / CFT).
According to the report, the APG said that Pakistan has 35 recommendations, most of which have been complied with. Pakistan will remain on follow-up and strengthen the implementation of AML / CFT measures and will continue to report to APG on progress.
According to the Third Follow-up Report (FUR) on Mutual Assessment of Pakistan released by the APG, Pakistan as a whole is now fully ‘complying’ with eight recommendations.’
Overall, Pakistan is now complying with 35 or more of FATF’s 40 recommendations.
The APG said that Pakistan has made good progress in addressing the technical compliance shortcomings identified in its Mutual Evaluation Report (MER).
Thus Pakistan made satisfactory progress on a recommendation and it was upgraded, this re-rating came when Pakistan submitted a comprehensive AML / CFT for the Central Directorate of National Savings (CDNS). Introduce responsibilities and institutions that provide financial services previously provided by Pakistan Post are subject to AML / CFT responsibilities like State Bank of Pakistan and Securities Exchange Commission of Pakistan.
Similarly, the three embassies which have placed Pakistan on a ‘partial compliance’ rating are concerned with recommendations related to 18, 26 and 34.
The 18th proposal is for the screening of staff and employees of financial institutions.
This means that Pakistan has also addressed the shortfall in employee screening requirements for banks and DFIs, including nine new provisions in the SBP and SECP regulations.
Amendments have been passed in the CDNS and Pakistan Post Regulations to provide applicable AML / CFT requirements, but minor changes remain in the SBP Regulation coverage of the requirements of financial groups.
In Recommendation 26, the APG pointed out that there are still shortcomings in the responsibilities of the financial group and the lack of clear arrangements for the SBP to respond to the risk of RS or financial group in response to progress in its operations.
Similarly, on R-34, the APG said that Pakistan had issued extensive guidance with the RE to support the implementation of its obligations and held feedback sharing sessions, which were largely held by ML / TF.
The reporting date for this assessment was February 1, 2021, which means that Islamabad may have made further progress since then, which will be reviewed at a later stage.
In February 2021, Pakistan submitted its third progress report requesting re-rating for R10, 18, 26 and 34.
The APG commended Pakistan’s efforts to improve its technical compliance with the four recommendations.
Welcoming the reclassification separately, Hamad Azhar, head of the task force at the Ministry of Finance and the FATF, said that Pakistan was much better in terms of technical compliance than many other countries.
“Pakistan is now at the top of the list of countries that have achieved C / LC rating for 35 of FATF’s 40 recommendations,” the finance ministry said.
Pakistan’s MER was adopted in August 2019 in which the country received complaints and grievances in 10 of the 40 FATF recommendations for technical compliance.
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