The Asia-Pacific Group (APG) on Money Laundering, an inter-governmental organisation consisting of 41 members in the Asia-Pacific region, has retained Pakistan on its “Enhanced Follow-Up” list over progress on its technical compliance with the Financial Action Task Force (FATF) recommendations on money laundering, financing of terrorism and proliferation financing.
The 4th Follow-Up Report (FUR) on Mutual Evaluation of Pakistan released by APG shows that Pakistan has made good progress in addressing the technical compliance deficiencies identified in its mutual evaluation report (MER) and now has 38 recommendations rated compliant or largely compliant (C/LC).
Pakistan has improved its rating to largely compliant on two recommendations and partially compliant and compliant on one recommendation each.
“Overall, Pakistan has made good progress in addressing the technical compliance deficiencies identified in its MER and has been re-rated on Compliant with R.33, Largely Compliant with R.28 and R.37 and Partially Compliant with R.38,” says the report.
Recommendation 28 Re-Rated to Largely Compliant
The report also highlights the factor) underlying the rating on each recommendation. For R.28, Pakistan has implemented fit and proper controls for DNFBPs, however minor deficiencies remain with respect to the controls for accountants supervised by ICMAP/ICAP and lawyers as they do not extend to cover associates of criminals. Risk-based supervision on DPMS, real estate and accountants is in place and supervision has commenced for lawyers. The remaining deficiencies are weighed as minor, taking into account the overall implementation of supervision of DNFBPs, says the report.
Recommendation 33 Re-Rated to Compliant
For R.33, according to the report, Pakistan now maintains comprehensive statistics on matters relevant to the effectiveness and efficiency of their AML/CFT systems, including STRs, received and disseminated; ML/TF investigations, prosecutions and convictions; property frozen; seized and confiscated; and mutual legal assistance or other international requests for co-operation made and received.
Recommendation 37 Re-Rated to Largely Compliant.
For R.37, the report says that since the 2020 FUR Pakistan has amended the MLAA (s.5) to remove the major deficiency identified with unduly restrictive condition regarding the requirement of notification to the subject of MLA requests. Pakistan has also issued updated MLA Guidelines to all implementing agencies to support the MLA process.
There are however deficiencies in the scheme for providing assistance to obtain restraint orders ex parte in all circumstances. This deficiency is principally reflected in R.38 but also creates a minor deficiency in the context of R.37. A minor deficiency remains relating to the coverage of predicate offences, it adds.
Recommendation 38 Re-Rated to Partially Compliant
For R.38, the reports says that since the October 2020 FUR, Pakistan has amended the MLAA (s.5) to remove the major deficiency identified with unduly restrictive condition regarding the requirement of notification to the 8 subject of MLA requests.
The further amendments to the MLAA allow for assistance on the basis of non-conviction based confiscation proceedings. Pakistan has also issued MLA Guidelines to all implementing agencies to support the expeditious MLA process.
There are however deficiencies in the scheme for providing assistance to obtain restraint orders ex parte in all circumstances. While the MLAA covers some circumstance where restraint orders can operate ex parte, there are circumstances where restraint orders can only be obtained with notice and another circumstance where the MLAA is unclear. These deficiencies with restraint are particularly problematic as ex parte restraint is a crucial practical step to properly support with-notice confiscation processes, hence more weighting has been assigned to this deficiency, it adds.
The mutual evaluation report (MER) of Pakistan was adopted in August 2019.
