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ISLAMABAD: The Financial Action Task Force (FATF) on Thursday decided to keep Pakistan on grey list till June 2021 at the end of its four-day plenary meeting.
The announcement was made by FATF President Dr Marcus Pleyer at a press briefing on the outcomes of the FATF plenary. “Pakistan remains under increased monitoring,” the president said.
“FATF recognises Pakistan’s counterterrorism efforts, however, there are still some serious deficiencies that the country needs to address,” Dr Pleyer said. “All of these areas relate to terror financing, three out of 27 points need to be fully addressed,” he added.
While reiterating that Pakistan has made “progress”, the FATF president said, “We strongly urge completion of the plan by Pakistan.”
The FATF had updated the overall performance of all countries. The country last week had submitted a progress report on the FATF Action Plan to the International Operations Review Group. In the last plenary held in October 2020, FATF had announced that Pakistan would continue to remain on its grey list till February 2021 for six out of 27 unmet action plan targets on anti-money laundering (AML) and combating the financing of terrorism (CFT).
Meanwhile, the Finance Ministry has said that FATF has appreciated Pakistan for the significant progress made on the entire action plan. The Plenary meetings of FATF were held virtually from 22-25 February 2021, where its members discussed a range of topics relating to Pakistan’s progress.
Pakistan’s delegation in the FATF Plenary was led by Muhammad Hammad Azhar, Chairman FATF Coordination Committee / Federal Minister for Industries and Production, and attended by senior officers from Ministry of Foreign Affairs, NACTA, FMU, National FATF Secretariat and other key stakeholders.
In its plenary meeting held on 25th February, FATF has stated: “To date, Pakistan has made progress across all action plan items and has now largely addressed 24 of the 27 action items.” The FATF has also acknowledged the continued high-level political commitment of Pakistan to combat terrorist financing which, according to FATF statement, has led to significant progress across a comprehensive countering financing of terrorism plan.
According to the statement, Pakistan has undertaken enormous work to strengthen its AML/CFT regime and address the strategic counter-terrorist financing related deficiencies.
In addition to the acknowledgement by FATF in its plenary statement that Pakistan has made significant progress on the entire action plan by addressing 24 out of the 27 items in the action plan, Pakistan has also made notable progress in the remaining 3 action items which also stand partially addressed.
As of now,all the 10 action items pertaining to the financial sector and border controls have been addressed. In relation to Terrorism Financing (TF) investigations and prosecutions, 6 of the 8 action items have been addressed, whereas for targeted financial sanctions, 8 of the 9 action items also stand addressed. The progress on the remaining 3 action items is well underway with significant progress made so far, said the statement.
The Ministry of Finance reaffirmed its commitment to continue strengthening the AML/CFT regime in line with the global standards.
Pakistan has sustained a staggering $38 billion economic losses due to the Financial Action Task Force’s (FATF) decision to thrice placed the country on its grey list since 2008, says a new research paper published by an independent think-tank, Tabadlab.
The research paper, published by Tabadlab – an Islamabad-based think tank – stated that grey-listing events spanning from 2008 to 2019, may have resulted in cumulative GDP losses worth $38 billion.
The losses are worked out on the basis of reduction in consumption expenditures, exports, and foreign direct investment (FDI).
The author argued that the data suggested that Pakistan’s removal from the grey list has at times led to the revival of the economy, as evident from an increase in the level of GDP for the years 2017 and 2018.
The paper also showed economic losses for the year of 2010, 2011 and 2016 when Pakistan was not on the grey list.
A large portion of $38 billion losses can be attributed to the reduction in household and government consumption expenditures, it added. – TLTP