Pakistan to remain on FATF grey list


News Desk/DNA

PARIS: The Financial Action Task Force (FATF) announced on Friday that Pakistan will continue to remain on the watchdog’s “increased monitoring list”, also known as the grey list, till it addresses all items on the original action plan agreed to in June 2018 as well as all items on a parallel action plan handed out by the watchdog’s regional partner – the Asia Pacific Group (APG) – in 2019.

Announcing the decision in a virtual press conference after the financial watchdog’s five-day plenary meeting, FATF President Dr Marcus Pleyer said, “Pakistan has made significant progress and it has largely addressed 26 out of 27 items on the action plan it first committed to in June 2018.”

Pleyer, however, added that the item on financial terrorism still needed to be addressed which concerned the “investigation and prosecution of senior leaders and commanders of UN-designated terror groups”.

He also pointed out that “a separate process has been taking place over the past few years” insofar as Pakistan was concerned.

“Back in 2019, FATF regional partner, the Asia Pacific Group (APG), identified a number of serious issues during its assessment of Pakistan’s entire anti-money laundering and counter-terrorist financing system. Since then Pakistan has made improvements. This includes clear efforts to raise awareness in the private sector to money laundering risks and to develop and use financial intelligence to build cases.”

But, he said, Pakistan was still “failing to effectively implement the global FATF standards” across a number of areas.

“This means risks of money laundering remain high which in turn can fuel corruption and organised crime. That is why the FATF has worked with the Pakistan government to work on areas that need to be improved as part of the new action plan that largely focuses on money laundering risks. This includes increasing the number of investigations and prosecutions and making sure that law enforcement agencies cooperate internationally to trace, freeze and confiscate assets.

“This is about helping authorities stop corruption and prevent organised criminals from profiting from their crimes and undermining the financial system and legitimate economy in Pakistan,” Pleyer said.

‘6 more action items’

When asked about the new action plan after the APG evaluation, Pleyer said the plan had “six action items including enhancing international cooperation and demonstrating that assistance is being sought from foreign countries in implementing UN Security Council designations”.

He said “this is about demonstrating that supervisors are conducting both onsite and offsite supervision commensurate with the specific risks associated with the non-financial sector.”

“It’s also about demonstrating that sanctions are applied to all legal persons and arrangements for non-compliance with beneficial ownership requirements; increase in money laundering investigations and demonstrating that non-financial sector is being monitored for compliance with proliferation financing requirements,” he added.

‘Delisting only after both plans addressed’

The watchdog’s president, responding to a question, said all items on both action plans needed to be addressed and goals fulfilled for countries to exit the grey list.

For Pakistan, Pleyer said, even after the last remaining item on the original action plan was addressed, delisting would not occur as there was a parallel action plan that was also given.

He said this while responding to a question from an Indian journalist, who had asked if Pakistan would be delisted after addressing the single remaining item on the original action plan or if the five additional items added by the Asia Pacific Group would also need to be addressed.

“As soon as this last remaining item of the [original] action plan is largely addressed, the members will decide whether they will grant an onsite [assessment] for this action plan. Usually once an onsite [assessment] has been successfully completed, the membership can decide on delisting a country. “But in this case we have a parallel action plan with all the action items in the second action plan. Then Pakistan must also largely complete all the items on this action plan and then there will be a separate onsite [assessment] to decide on this action plan.