Paris October 21, 2021: The Financial Action Task Force (FATF) has reviewed Pakistan’s progress on FATF Action Plans in its plenary meeting held on 21st October 2021. The FATF has recognized considerable progress made by Pakistan on both the Action Plans.
With regard to the 2021 Action Plan, Pakistan has completed four of the seven Action Plan Items. Pakistan has completed these four Action Plan items much before the timelines prescribed by FATF. While progress on remaining three action items is well underway and it is aimed to complete three action items ahead of timelines set by the FATF.
The Action items that have been completed include amendments in the Mutual Legal Assistance Act, 2020, AML/CFT supervision of Designated Non-Financial Businesses and Professions (DNFBPs), transparency of beneficial ownership information and implementation of Targeted Financial Sanctions for Proliferation Finance by DNFBPs. The remaining action items in 2021 Action Plan include investigation & prosecution of ML cases, confiscation of assets and UN listings.
Regarding the 2018 Action Plan, Pakistan submitted a comprehensive progress report on the last remaining Action Plan item. The FATF acknowledged Pakistan’s continued political commitment, which led to significant progress across a comprehensive CFT Action Plan and encouraged Pakistan to report further progress on investigation and prosecution.
The Plenary meeting decided to maintain status quo with respect to Pakistan, for the time being. Considerable work has already been carried out on remaining items of both Action Plans. FATF will undertake next review of Pakistan’s Progress in February 2022.
The FATF Plenary meetings were held virtually from 19-21 October 2021, where its members discussed a variety of topics including Pakistan’s progress. The Pakistan delegation was led by Mr. Muhammad Hammad Azhar, Federal Minister for Energy / Chairman National FATF Coordination Committee.
Pakistan is fully committed to completing its both Action Plans in cooperation with FATF and its international partners. The high-level political commitment, which is driving its revamped AML/CFT regime, is widely recognized by international community.
Pakistan has been on the FATF’s increased monitoring list, also known as the grey list, for deficiencies in its counter-terror financing and anti-money laundering regimes since June 2018.
The 100% compliance report submitted by Pakistan states that Pakistan has completed the implementation of the remaining last point,” a source said. “The decision to remove from or retain the name on the grey list will now be based on the progress.
The virtual meeting of the FATF Plenary took place under the presidency of Dr Marcus Pleyer today, while delegates representing 205 members of the Global Network and observer organisations including the International Monetary Fund, the United Nations and the Egmont Group of Financial Intelligence Units will also take part in the meeting.
The FATF in its last session in June has Kept Pakistan on the watchdog’s “increased monitoring list” till it addressed the single remaining item on the original action plan agreed to in June 2018 as well as all items on a parallel action plan given by the Asia Pacific Group — the FATF’s regional affiliate.
“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,” FATF President Dr Marcus Pleyer had said at a post-plenary presser.
He had, however, pointed out that the remaining 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”.
The FATF, after discussion, had decided to maintain status quo for Pakistan — countries in increased monitoring. It hoped the remaining action item would be completed before the FATF’s next plenary scheduled for October.
Shortly after the announcement, the then minister for industries and production Hammad Azhar had said that the APG had given seven additional action points under a parallel mutual evaluation mechanism under which Islamabad had largely completed 75 out of 82 action points.
Azhar had said Pakistan would complete within three-four months the only remaining FATF target on speedy prosecution of the UN-designated terror groups’ leaders. He had said the government had set a target for itself to complete APG’s seven action points within 12 months — a target most jurisdictions achieve in two years.
Pleyer had made it clear that Pakistan’s delisting from grey list would not take place until both action plans were completed and the members then came to a conclusion that systems and efforts against financial risks were sustainable. He had said the rules were very clear and equally applicable that jurisdictions under increased monitoring list had to complete all action points and fully address the risks.
Under the new action plan, Pakistan will have to address its strategically important AML/CFT deficiencies. These include enhancing international cooperation by amending the MLA law, demonstrating that assistance is being sought from foreign countries in implementing UNSCR 1373 designations and also that supervisors are conducting both on-site and off-site supervision commensurate with specific risks associated with designated non-financial businesses & professions (DNFBPs), including applying appropriate sanctions where necessary.
