Tuesday, October 13 is an important day for Pakistan in regards to its continued grey-listing by the Financial Action Task Force (FATF) as the International Cooperation Review Group (ICRG) – a special group that operates under FATF – will review Pakistan’s progress report today.

Meanwhile, the Asia-Pacific Group (APG) on Money Laundering’s 1st Follow-Up Report recognised Pakistan’s progress and reflected that in its compliance report. The regional affiliate of FATF re-rated Pakistan as ‘compliant’ on Recommendation-29. It has retained Pakistan on its “Enhanced Follow-Up” list for progress on technical recommendations of the Financial Action Task Force (FATF) to fight money laundering and terror financing.

The ICRG will hold its two day meeting through video link. The group consists of China, USA, UK, France, Germany, New Zealand and India. Their report will be presented in the FATF plenary meeting which is scheduled to meet, virtually, on October 21st, 22nd and 23rd in order to decide Pakistan’s grey list status and assess its progress on the proposed 27-point action plan. 

Sources told The Correspondent that Pakistan’s case is strong as it has implemented most of the conditions set by the financial watchdog. Pakistan has answered in details ICRG’s questionnaire which contained 150 questions. Furthermore, National Counter Terrorism Authority (NACTA), State Bank of Pakistan (SBP), Securities & Exchange Commission of Pakistan (SECP) and Financial Monitoring Unit have all completed their tasks as required.

In June 2018, the Islamic Republic was placed on the grey list. The 27-point action plan was then provided to ensure the country complied with its international obligations and was informed, in no uncertain terms, that failure to do so would lead to blacklisting.

The Paris-based global anti-money laundering and counter terror financing watchdog was scheduled to meet in June this year after granting the South Asian giant a four-month grace period in February; however the meeting was rescheduled due to the COVID-19 outbreak and the plenary meeting scheduled for later this month will now assess the progress that Pakistan has made on the action plan.

A few weeks ago, the first Follow-Up Report on Mutual Evaluation of Pakistan released by the Asia-Pacific Group (APG) detailed the country’s progress on the 40 FATF recommendations and noted that Pakistan had improved its full compliance on only two of them. The 12-page report held that Pakistan should remain in enhanced follow up and should continue to report back to the APG on its progress to strengthen its implementation of its anti-money laundering and combating financing terror. 

Islamabad had made a request for a re-rating on three areas declared partially compliant by the APG in its report in October last year, this request was accepted on one count and rejected on two counts due to “insufficient” progress.

The country’s continued presence in the grey list makes it increasingly difficult for it to obtain financial aid from the IMF, the World Bank, the Asian Development Bank and the European Union.

The narrative from the capital heading into the plenary meetings next week continues to be one of optimism as domestic officials believe that the country is either fully compliant with or has made significant progress on at least 21 of the 27 points.

This is primarily due to the recent amendments of 15 laws in order to address the FATF and APG recommended actions’ shortcomings. The National Assembly believes that it has concluded the legislation needed to guide the country out of the grey list by passing three bills in a joint sitting of the two houses last month. These include the Anti-Money Laundering (Second Amendment) Bill, 2020 which aims to streamline the existing law to bring it in line with FATF prescribed standards, the Anti-Terrorism (Third Amendment) Bill which has inserted a section relevant to the application of investigation techniques and the Islamabad Capital Territory Waqf Properties Bill, 2020 which is aimed at proper management, supervision, and administration of waqf properties in the territorial limits of ICT. 

Irrespective of whether Pakistan achieves its objective of exiting the grey list, officials are confident that the country will not be blacklisted as it is understood that at least three member countries shall support the report presented. Additionally, officials remain cautiously optimistic about the notion that Pakistan will be able to garner the support of the twelve member states required to achieve a clean exit. 

Pakistan’s steadily improving status in a testament to the diligence of state officials and a setback for India; which had pushed heavily to put Pakistan on FATF’s blacklist.


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