FATF excludes Pakistan from grey list

The Financial Action Task Force (FATF) Friday excluded Pakistan from its grey list, reported 24NewsHD TV channel.

FATF president Raja Kumar announced this in a press conference in Paris.

A decision to this effect was taken in a four-day FATF Plenary session held in Paris from October 16 to 21. 

The session was chaired by FATF President Raja Kumar while representatives of the 206-member global network and observer organizations participated in the meetings. Members of the IMF, the World Bank, the UN, and the Financial Intelligence Unit also participated in the meetings. 

Minister of State for Foreign Affairs Hina Rabbani Khar represented Pakistan at the meeting during which the global anti-money laundering watchdog discussed Islamabad's efforts to exit its grey list.

Pakistan first entered the list in 2008 and exited in 2010. The country was placed again on the list from 2012 to 2015. It has been back on the ‘grey list’, also known as the “increased monitoring list”, since 2018.

In 2021, the global body emphasised that Pakistan needs to prosecute members of the UN-designated terror groups, including Jaish-e-Mohammed chief Masood Azhar, Lashkar-e-Taiba founder Hafiz Saeed, and commander Zakiur Rehman Lakhvi.

At the last plenary meeting in March 2022, FATF retained Pakistan in its “grey list” and directed it to do more in investigating and prosecuting senior leaders and commanders of UN-designated terrorist groups for terror financing.

Pakistan has fully complied with both FATF action plans. Islamabad has implemented 34 points under two different action plans. Pakistan has fulfilled all conditions to stop money laundering and financial support of terrorists.

Removal from the FATF list will provide Pakistan a boost after the country's sovereign credit rating has been downgraded by Moody's. It will also improve sentiment, important from a foreign direct investment perspective.

https://www.youtube.com/watch?v=e59TRscWlmU

Islamabad made high-level political commitments to address these deficiencies under a 27-point action plan. But later the number of action points was enhanced to 34. The country had since been vigorously working with FATF and its affiliates to strengthen its legal and financial systems against money laundering and terror financing to meet international standards in line with 40-recommendations of the FATF.

A 15-member joint delegation of the FATF and its Sydney-based regional affiliate — Asia Pacific Group — paid an onsite visit to Pakistan from Aug 29 to Sept 2 to verify the country’s compliance with the 34-point action plan committed with the FATF.

The authorities that had kept the countrywide visit of the delegation low profile later termed it “a smooth and successful visit”. The delegation had detailed discussions with relevant agencies pursuant to the authorisation of onsite Visit by FATF Plenary in June 2022.

According to the Foreign Office, the focus of the visit was to validate on ground Pakistan’s high-level commitment and sustainability of reforms in AML/CFT regime and [it] looked forward to logical conclusion to the evaluation process. The report of FATF Onsite team will be discussed in FATF’s International Cooperation Review Group and plenary meetings.

Pakistan believed that as a result of strenuous and consistent efforts over the past four years, it has not only achieved a high degree of technical compliance with FATF standards but also ensured high level of effectiveness through implementation of two comprehensive FATF action plans.

In June this year, FATF had found Pakistan “compliant or largely compliant” on all the 34 points and had decided to field an onsite mission to verify it on ground before formally announcing the country’s exit from the grey list that finally took place in August and September.

In terms of technical compliance with FATF standards, Pakistan has been rated by APG as “compliant or largely compliant” in 38 out of 40 FATF recommendations in August this year, which placed the country among the top compliant countries in the world.

Last month, the Foreign Office said a FATF technical team had conducted a “successful” visit and Islamabad was expecting a “logical conclusion” of the evaluation process in October.