The Financial Action Task Force (FATF) based in Paris is an intergovernmental body established in 1989 to combat money laundering, terrorist financing, and other related threats to the integrity of the international financial system.
Currently placed on the FATF ‘gray list’, Pakistan has struggled in recent months to avoid being added to the list of countries deemed to be in compliance with anti-money laundering and terrorist financing regulations, a move that officials fear could damage its economy. , which is already under heavy pressure.
The global watchdog will review Pakistan’s performance to meet international commitments and standards in the fight against money laundering and terror financing at a meeting scheduled to be held in Beijing on June 21-26, according to the Dawn report.
Not yet clear whether the meeting could be postponed because it is global coronavirus a pandemic that occurred in downtown Wuhan China.
In February, the FATF gave Pakistan a four-month grace period to finalize a 27-point plan of action against money laundering and terror financing carried out with the international community when the country noted that Pakistan had given 14 points and missed 13 other targets.
A senior government official said Pakistan’s performance would be reviewed at a joint FATF and Eurasian Group working group meeting scheduled in Beijing and the assessment would lead to a final announcement in October this year if Pakistan had to get off the gray list.
He said certain action points had not been met with commitments mainly due to ongoing coronavirus locking.
He said that Pakistan had implemented a broad-based strategy to take the actions needed to complete its extraordinary commitment with FATF in February and actively make progress.
The FATF announced on February 21 that all deadlines given to Pakistan to complete the 27-point action plan had ended, but only 14 items had been mostly completed, leaving 13 targets unachieved.
He strongly urged Pakistan to immediately complete its full action plan by June 2020 or be moved to a list of monitored jurisdictions, commonly known as a blacklist.
“Otherwise, if significant and sustained progress, especially in the prosecution and punishment of TF (Terrorist Funding) is not made by the next Plenary, FATF will take action, which may include FATF calling on its members and urging all jurisdictions to advise their Financial Institutions. ( FI) to pay special attention to business relations and transactions with Pakistan, “the FATF said in an official announcement in February.
The FATF has noted “recent and important improvements” but “once again expressed concern given Pakistan’s failure to complete its action plan according to the agreed time schedule and given the risk of TF originating from jurisdiction”.
Pakistan must demonstrate compliance with 13 remaining action points in eight main categories. The state must demonstrate that remedial actions and sanctions are applied in Anti Money Laundering and Funding Countermeasures cases Terrorism Violation of Law (AML / CFT), related to TF risk management and TFS (Terrorist Funding Sanctions) obligations.
Pakistan must demonstrate that competent authorities work together and take action to identify and take enforcement actions against illegal remittance or value services and prove the implementation of cross-border currencies and ‘negotiable instruments’ at all ports of entry, including implementing them effectively , proportional and dissuasive sanctions.
It must also demonstrate that law enforcement agencies identify and investigate the widest range of TF activities and that TF investigations and prosecutions target designated persons and entities, and those who act on behalf of or on the directives of designated persons or entities in addition to showing TF prosecutions produce sanctions that are effective, proportionate and dissuasive.
Pakistan’s extraordinary area of action also includes effective implementation of targeted financial sanctions (supported by comprehensive legal obligations) against all 1,267 and 1,373 designated terrorists and those acting for or on their behalf, including preventing fundraising and transferring funds, identifying and freezing assets (movable and immovable), and prohibit access to funds and financial services.
It must demonstrate enforcement of TFS violations, including administrative and criminal penalties and provincial and federal authorities that work together in law enforcement cases and prove that facilities and services owned or controlled by the person designated lose their resources and use resources.
The FATF plenary officially put Pakistan on the gray list in June 2018 due to ‘strategic shortcomings’ in the AML / CFT regime after encouragement from India was supported by the US, Britain and several European countries.
Pakistan then committed to the highest level for the 27-point action plan but failed to meet the deadline. It has completed major amendments to at least a dozen laws to meet FATF requirements in June, according to the report.
FATF currently has 39 members, including two regional organizations – the European Commission and the European Commission Gulf Cooperation Council.
India is a member of the FATF consultation and Asia Pacific Group.
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