Pakistan

FATF not convinced by Pakistan’s headway

/ IoK News /

Significant progress but ‘serious deficiencies in stopping money laundering and terrorism financing, FATF President

Global money laundering watchdog the Financial Action Task Force (FATF) on Thursday said it would keep Pakistan on its ‘grey list’. FATF had placed Pakistan on its grey list of countries with inadequate controls over terrorism financing in 2018, which made foreign firms more cautious about investing in Pakistan.

In an online Press briefing from Paris, FATF president Marcus Pleyer said Islamabad had made ‘significant progress but there remained ‘serious deficiencies in mechanisms to plug money laundering and terrorism financing. Pleyer said three out of 27 action points still needed work.

Following the announcement, Pakistan said it was committed to complying.

‘It was also noted by FATF member countries that Pakistan is subject to perhaps the most challenging and comprehensive action plan ever given to any country, Pakistani federal minister Hammad Azhar wrote on Twitter.

Azhar, who leads Pakistan’s effort to implement the FATF roadmap, said the country was ‘subject to dual evaluation processes of FATF with differing time lines.

Replying to a question, Pleyer said on Thursday that the risk of Pakistan being put on the blacklist had not gone, and that the country must continue to work on outstanding action points to fix its financial monitoring mechanisms.

The second Plenary of the FATF under the German Presidency of Dr Marcus Pleyer took place on 22, 24 and 25 February.

Delegates representing the 205 members of the Global Network and observer organisations, such as the IMF, the United Nations and the World Bank, worked through a full agenda to strengthen global safeguards to detect, prevent and disrupt the financial flows that fuel crime and terrorism.

Due to the ongoing COVID-19 pandemic, the Plenary met virtually for the third time. As the pandemic continues to impact families, healthcare services, communities and economies worldwide, criminals continue to exploit the crisis for financial gain.

During their discussions, delegates finalised work in a number of important areas. These included guidance to help countries take an effective, risk-based approach to supervision, guidance on investigating and prosecuting terrorist financing and work on illicit arms trafficking and terrorist financing, the latter two available to competent authorities.

Delegates also agreed to release for public consultation a draft guidance to assist countries, financial institutions and DNFBPs in identifying, assessing and mitigating the risks of the financing of the proliferation of weapons of mass destruction, and updated guidance on virtual assets and virtual asset service providers.

The FATF also advanced its work on ongoing key issues. These include digitalisation, which has the potential to make anti-money laundering and counter-terrorist financing (AML/CFT) action more effective and efficient.

In particular, the FATF agreed to start new work on digital transformation of AML/CFT for operational agencies. The FATF also continued discussions on the strategic review, which will shape the next round of mutual evaluations and make them more timely and risk-based.

Delegates explored potential amendments to further strengthen the FATF requirements on beneficial ownership. The FATF’s mutual evaluations, as well as high-profile examples of abuse, demonstrate that criminals are still able to hide their illicit assets behind anonymous or complex legal structures. 

Delegates discussed how to improve transparency and ensure that up-to-date beneficial ownership information is available to authorities. The FATF also discussed the preliminary findings in its ongoing work to overcoming the challenges linked to the effective recovery of criminals’ assets, tackle money laundering from environmental crimes and the financing of ethnically and racially motivated terrorism.

Source: FATF Presidency and News Agencies.

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