Pakistan likely to exit FATF ‘grey list’ this week
ISLAMABAD: After spending over 52 months on the dreaded “enhanced surveillance list” of the Financial Action Task Force (FATF), often known as the “grey list,” Pakistan is anticipated to finally be removed off the list on October 21.
The Paris-based global dirty money watchdog announced that the first FATF Plenary under T. Raja Kumar’s two-year Singapore Presidency will take place on October 20-21, 2022. The International Monetary Fund, the United Nations, the World Bank, Interpol, and the Egmont Group of Financial Intelligence Units are just a few of the organisations that will send delegates to the Working Group and Plenary meetings in Paris on behalf of 206 Global Network members and observer organisations.
The plenary’s choices would be made public after the two days of discussion.
In addition to other important topics, the plenary will focus on jurisdictions that have been identified as posing a risk to the global financial system. This will include an update on public statements that identify jurisdictions as high risk or being subject to increased monitoring, as well as recommendations on how to improve beneficial ownership transparency to stop the use of shell companies and other opaque structures to launder illicit funds.
In June 2018, Pakistan was added to the list of countries that require heightened monitoring due to shortcomings in its legal, financial, regulatory, investigative, prosecution, judicial, and non-government sectors that were deemed a severe threat to the world’s financial system.
Islamabad pledged at the highest leadership levels to solve these shortcomings with a 27-point action plan. The number of action points was eventually increased to 34. Since then, the nation has been actively working with FATF and its affiliates to enhance its legal and financial systems against money laundering and the funding of terrorism in order to meet global standards and adhere to the FATF’s 40 recommendations.
In order to assess Pakistan’s adherence to the 34-point action plan it committed to with the FATF, a combined delegation of 15 representatives from the FATF and its regional affiliate, Asia Pacific Group, located in Sydney, visited the nation there from August 29 to September 2.
Later, the authorities who had kept the delegation’s visit to the whole nation quiet described it as “a smooth and successful tour.” In accordance with the delegation’s authorization for an on-site visit by the FATF Plenary in June 2022, extensive discussions were held with pertinent authorities. The goal of the visit, according to the Foreign Office, was to confirm on the ground Pakistan’s high-level commitment and the durability of reforms in the AML/CFT regime. The Foreign Office also expressed excitement for the logical end to the review process. In the International Cooperation Review Group and plenary sessions of FATF, the report of the on-site team will be discussed.
Pakistan claimed that after four years of persistent and arduous work, it had not only achieved a high level of technical compliance with FATF standards but also assured high levels of efficacy by putting into practise two extensive FATF action plans.
In June of this year, the FATF determined that Pakistan was “compliant or largely compliant” with all 34 of the points and made the decision to send an onsite mission to confirm this on the ground before formally announcing Pakistan’s removal from the grey list, which eventually happened in August and September.
In terms of technical adherence to FATF standards, Pakistan was deemed “compliant or mainly compliant” by APG in 38 out of the 40 FATF recommendations in August of this year, placing it among the top adherent nations in the world.
A structural benchmark set by the IMF for the end of March 2022 was the completion of the FATF/APG action plan for effectiveness of AML/CFT, which was eventually completed in June after a slight delay. The government promised to “meet the timelines for the implementation of APG’s 2021 Action Plan, including on the mutual legal assistance framework, AML/CFT supervision, transparency of beneficial ownership information, and compliance with targeted financial sanctions for pr” and made a commitment to the IMF to review by the end of June 2022 the implementation of AML/CFT controls by financial institutions with respect to the tax amnesty programme for the construction sector.