FATF Announces Its Decision on Pakistan’s Greylist Status

The Financial Action Task Force (FATF), on Thursday, decided to keep Pakistan on the greylist for another four months till June 2021. The Plenary meetings of FATF were held virtually from 22-25 February 2021, where its members discussed a range of topics relating to Pakistan’s progress.

Pakistan has largely addressed 24 of 27 action items.

The Financial Action Task Force (FATF) has appreciated Pakistan for the significant progress made on the entire action plan. To date, Pakistan has made progress across all action plan items and has now largely addressed 24 of the 27 action items.

As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan before June 2021.

Since June 2018, when 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 counterterrorist financing-related deficiencies, Pakistan’s continued political commitment has led to significant progress across a comprehensive CFT action plan, including by:

  • Demonstrating that law enforcement agencies are identifying and investigating the widest range of TF activity,
  • Demonstrating enforcement against TFS violations, and working to prevent the raising and moving of funds including by controlling facilities and services owned or controlled by designated persons and entities.

According to an official statement released by FATF,

Pakistan should continue to work on implementing the three remaining items in its action plan to address its strategically important deficiencies, namely by: (1) demonstrating that TF investigations and prosecutions target persons and entities acting on behalf or at the direction of the designated persons or entities; (2) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions; and (3) demonstrating effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists, specifically those acting for or on their behalf.

Pakistan has undertaken enormous work to strengthen its AML/CFT regime and address the strategic counter-terrorist financing-related deficiencies. In addition to the acknowledgment by FATF in its plenary statement that Pakistan has made significant progress on the entire action plan by addressing 24 out of the 27 items in the action plan, Pakistan has also made notable progress in the remaining 3 action items which also stand partially addressed. As of now, all the 10 action items pertaining to the financial sector and border controls have been addressed. In relation to Terrorism Financing (TF) investigations and prosecutions, 6 of the 8 action items have been addressed, whereas, for targeted financial sanctions, 8 of the 9 action items also stand addressed. The progress on the remaining 3 action items is well underway with significant progress made so far.

A.A.H Soomro, Managing Director at Khadim Ali Shah Bukhari Securities told Propakistani,

24/27 is almost a whitelist. This is commendable progress despite Covid days. Pakistan’s willingness is acknowledged and rewarded. Under FATF Pakistan has continued to document and should continue to do so on the black economy and money laundering. It’s a matter of national security.

Before the beginning of the plenary meeting on Monday, the FATF had updated the overall performance of all countries.

Pakistan’s delegation in the FATF Plenary was led by Mr. Muhammad Hammad Azhar, Chairman FATF Coordination Committee / Federal Minister for Industries and Production and attended by senior officers from the Ministry of Foreign Affairs, NACTA, FMU, National FATF Secretariat and other key stakeholders.

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

This is a developing story.