ISLAMABAD: Pakistan could stay on the Financial Action Task Force (FATF) gray checklist for a protracted interval, as it might be handed over one more motion plan for implementation for one to 3 years on the idea of a recently-approved Mutual Analysis Report (MER), mentioned Federal Minister for Financial Affairs Hammad Azhar on Thursday.
The Asia Pacific Group — the FATF-styled regional physique — had discovered critical deficiencies in Pakistan’s anti-money laundering measures and combating terror financing frameworks in its mutual analysis report launched just a few weeks in the past.
“On account of the MER carried out by the Asia Pacific Group, Pakistan was underneath remark until October 2020,” mentioned the minister.
He gave a briefing to the Nationwide Meeting Standing Committee on Finance and Income that met underneath the chair of former Finance Minister Asad Umar.
“If we don’t totally implement the APG’s suggestions by October subsequent 12 months, a brand new motion plan of 1 to 3 years might be given to Pakistan,” mentioned the minister in his opening remarks.
In February final 12 months, the FATF had determined to put Pakistan on the gray checklist with impact from June 2018. Pakistan had been given a 27-point bold motion plan that required it to fully choke terror financing and financial laundering, dismantle terrorists’ sanctuaries, and make banking and non-banking monetary rules extra stringent.
The APG’s MER was separate from the FATF’s 27-point plan, which is able to hold the sword hanging on the nation for at the very least subsequent two to 3 years.
The FATF plenary met final month and gave Pakistan 4 extra months to fully implement the 27-point Action Plan after Islamabad was discovered totally compliant solely on 5 factors.
“Pakistan must do extra and it must do it sooner. Pakistan’s failure to fulfil FATF’s international requirements is a matter that we take very significantly,” FATF President Xiangmin Liu mentioned whereas addressing a information convention in Paris final month.
The FATF Plenary will once more assessment Pakistan’s case in February subsequent 12 months.
To a query, Azhar mentioned that it was not clear what would be the standing of Pakistan from February 2020 to October 2020 when the FATF will take a choice on the idea of the MER.
Technically, Pakistan might not be on the gray checklist within the intervening interval however the FATF plenary can also determine to delay the choice until October, he added.
Azhar mentioned that not like the FATF’s 27-point motion plan, the MER-based plan might be simple to implement.
Final month, the APG had introduced Pakistan’s mutual analysis report on the FATF plenary assembly, which mentioned intimately the nation’s compliance with 40 suggestions of the FATF.
The mutual analysis report discovered cash laundering and terror financing as high-risk class areas in Pakistan.
The report confirmed that of 40 suggestions of the FATF on curbing cash laundering and combating terror financing, Pakistan was totally compliant on one solely. It was “largely compliant” on 9, “partially compliant” on 26 and “non-compliant” on 4 suggestions.
On account of these antagonistic findings, the APG positioned Pakistan on its expedited enhanced follow-up reporting checklist.
The minister mentioned that Pakistan would submit its preliminary report back to the Joint Group of the FATF on December 2 and the ultimate report might be shared on January 7.
On the idea of the ultimate report, the Joint Group will give its findings to the FATF that can take up Pakistan’s case once more in mid of February.
Challenges that Pakistan is going through are better than every other nation due to excessive threat profile, which additionally led to organising excessive thresholds, mentioned Azhar.
PML-N’s Dr Aisha Ghaus Pasha noticed that if the FATF blacklisted Pakistan, the nation wouldn’t be capable to problem international sovereign bonds.
Azhar downplayed the difficulty of blacklisting and mentioned that Pakistan had twice been blacklisted prior to now, first in 2010.
He mentioned during the last one 12 months the federal government has constructed an institutional mechanism to reply to the challenges and the intelligence businesses and the armed forces had been additionally serving to the civilian authorities on this regard.
Pakistan has accomplished mapping of all non-profit organisations and in consequence out of 64,000, round 33,000 NPOs have been de-registered, mentioned Mansoor Siddique, the Director Normal of Monetary Administration Unit.
He mentioned the nation’s charity legal guidelines had been additionally developed in mild with the FATF pointers.
The director normal mentioned that money couriers, investigation and prosecution of terror financing circumstances and the confiscated belongings of banned outfits had been just a few excellent areas the place the FATF declared Pakistan non-complaint.
“We’ve seized over 1,000 belongings and at the moment are required to analyze their sources and unearth beneficiaries,” mentioned Siddique.