SYDNEY: Asia Pacific Group (APG) on Money Laundering has published results of Pakistan’s second Mutual Evaluation follow-up Report on 2 June 2021. As per the report, Pakistan has achieved a compliant/largely compliant rating in 31 out of 40 FATF Recommendations in Technical Compliance.
These results prove the sincerity along with the resolve of the Government in complying with FATF requirements. These results are also a manifestation of the irreversibility and sustainability of the complete process in bringing Pakistan at par with Global AML/CFT standards. These results are a manifestation of a whole government approach adopted to achieve the same. An upgrade of 21 Recommendations within this short period of time remains unprecedented in FATF history.
FATF’s Mutual Evaluation Report (MER) of jurisdictions is assessed in two domains i.e., Technical Compliance/Legal Instruments (40 FATF Recommendations) and Demonstration of Effectiveness (11 Immediate Outcomes). Pakistan’s MER was adopted in October 2019 in which Pakistan was rated compliant and largely complaint in 10 out of 40 FATF Recommendations for Technical Compliance. After the adoption of MER, Pakistan was placed under Post Observation Period by FATF which expired in February 2021.
During the said period, Pakistan carried out major legal reforms with the enactment of 14 Federal Laws & 3 Provincial Laws along with relevant rules and regulations. The laws not only strengthened the systems in Pakistan but also brought in sustainability. Pakistan submitted its report to FATF on its Technical Compliance on 1st October 2020. APG has acknowledged that Pakistan has made notable progress in addressing the Technical Compliance deficiencies identified in its MER and has been re-rated compliant /largely compliant in 31 out of 40 FATF Recommendations. Pakistan has also submitted re-rating requests to APG on four more recommendations in the next follow-up report which are under review by APG. The technical upgrades achieved will help to manifest the achievement of effectiveness in 11 immediate outcomes of the APG MER process. As a result of this substantial progress, APG has decided to move Pakistan from enhanced (expedited) to enhanced follow-up; and Pakistan will continue to report back to the APG on progress to strengthen its implementation of AML/CFT measures.
Federal Minister for Energy Hammad Azhar confirmed that Pakistan has achieved a compliant rating in 31 out of 40 recommendations put forth by the Financial Action Task Force (FATF).
The minister made the announcement through a tweet on Friday, saying “Pak[istan] has achieved compliant rating in 31 out of 40 FATF recommendations (MER technical compliance). This is the parallel scrutiny being undertaken at FATF besides our current action plan. Upgrade of 20 criteria in less than 2 years is unprecedented in FATF history for any country.”
The minister further said that the “outcome is a result of major legal reforms (14 federal + 3 provincial laws with corresponding regulations). It is also due to the untiring efforts of the entire FATF team (20 ministries plus organisations).”
Earlier in February, FATF had decided to keep Pakistan on the grey list till June 2021. Pakistan has implemented 24 out of the 27 points of the action plan.
“Pakistan has made progress across all action plan items and has 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,” stated the FATF press release.
In its statement, the Ministry of Finance said it “reaffirms its commitment to continue strengthening the Anti Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regime in line with the global standards.”
“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,” read the FATF statement.