Financial Action Task Force (FATF) has given warned Pakistan to materialize its high-level political commitments to curb terror-financing and money laundering risks related to its international financial system.
Notably, FATF acknowledged Pakistan’s progress on its prescribed five actions in the meeting held in February to review the country’s case. However, it also identified some gaps regarding Pakistan’s implementation on certain action plan items.
The warning has caused the government to become more aggressive in showing tangible progress within two months as the next FATF deadline is in May 2019.
The government will now prioritize the realization of 27 targets under the 10-point action plan. While the FATF meetings were going on from February 18-22, the government imposed a ban on Falah-e-Insanyat Foundation (FIF) and Jamat-ud-Dawa (JuD).
This ban was to answer India’s concerns that Pakistan was supporting these and six other similar organizations including Jaish-e-Mohammad (JeM).
Notably, the Pulwama attack provided India with another opportunity to support its claims. The FATF expressed concern and condemned the attack, saying terrorism continues to threaten the world. It further said that such incidents cannot occur without money and the means to mobilize funds within the terrorists and their supporters.
Since then, the government is holding inter-ministerial consultations on a daily basis to deal with the weak areas identified by the International Cooperation Review Group (ICRG) of the FATF. The ICRG had assessed Pakistan’s progress report submitted by the Asia-Pacific Joint Group, which is a regional associate of the FATF.
Authorities briefed the Prime Minister in one of the meetings that six banks have been fined till date. Whereas, 109 bankers are being investigated for opening fake bank accounts. Moreover, the Financial Monitoring Unit (FMU) has noticed 8,707 suspicious transaction reports (STRs) in 2018.
Authorities also reported confiscating smuggled currency and jewelry valuing over Rs. 20 billion between July 2018 and January 31, which is 66 percent higher than Rs. 12 billion recorded last year.
While these steps are impressive, they may not be sufficient to satisfy the FATF, which has a standard matrix to review the systems, processes, and weaknesses. It will monitor Pakistan under the 10-point action plan that has certain deadlines.
The ICRG was not satisfied with the country’s progress on the milestones set out for January 2019. Therefore, the government needs to accelerate its efforts to meet the deadline of May 2019. That is necessary to get it off the FATF greylist in September 2019.
The FATF said that Pakistan did review its terror financing risk assessment, but could “not demonstrate a proper understanding of the terror financing risks posed by Islamic State group, AQ (Al Qaeda), JuD, FIF, LeT (Lashkar-e-Taiba), JeM, HQN (Haqqani Network), and persons affiliated with the Taliban”.