Pakistan no longer on global financing watchdog FATF grey list

Paris:   The global illicit financing watchdog on Friday removed Pakistan from its ‘grey list’ after four years.

The Financial Action Task Force (FATF) said that Pakistan is “no longer subject to the FATF’s increased monitoring process.” The FATF statement welcomed Pakistan’s significant progress in improving its anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.

Addressing a press conference in Paris, FATF President Raja Kumar said that “Pakistan has made significant improvements to strengthen the effectiveness of this framework for combating terrorism financing.” He noted that Pakistan had been on the grey list since 2018 and had two concurrent action plans which “Pakistani authorities have largely addressed.”

“Pakistan has strengthened the effectiveness of its AML/CFT regime and addressed technical deficiencies to meet the commitments of its action plans regarding strategic deficiencies that the FATF identified in June 2018 and June 2021, the latter of which was completed in advance of the deadlines, encompassing 34 action items in total.”

The statement added that Pakistan will continue to work with the Asia Pacific Group on Money Laundering (APG) to further improve its AML/CFT system. FATF sets standards for anti-money laundering and fighting terrorist financing.

Pakistani officials welcomed the move saying they were confident that the global money-laundering watchdog will remove the country from its grey after complying with all of the FATF action plans.

Prime Minister Shehbaz Sharif said that “Pakistan exiting the FATF grey list is a vindication of our determined and sustained efforts over the years.” He congratulated civil and military leadership as well as all institutions whose hard work led to success.

Pakistan's foreign ministry said in a statement the decision was "much-awaited good news". "FATF has unanimously decided to remove Pakistan from the 'list of jurisdictions under increased monitoring'," the foreign ministry said.

"In simpler terms, Pakistan has been whitelisted by FATF." "Congratulations to the people of Pakistan," Foreign Minister Bilawal Bhutto Zardari tweeted.

Minister of State for Foreign Affairs Hina Rabbani Khar who led the Pakistani delegation at the FATF meeting said that the “FATF lauded the efforts by Pakistan” to improve its financial system. She added that the government and all institutions made joint efforts to implement the FATF action plans.

Hammad Azhar, who had been overseeing the implantation of FATF-related legislation in Pakistan until March 2022, said that the “FATF had given Pakistan one of the most challenging and comprehensive action plans ever” but persistent efforts from 2018 to 2022 during Imran Khan’s tenure finally proved to be successful in getting the country off the grey list.

Azhar, a Pakistan Tehreek-e-Insaf (PTI) leader, lauded the efforts of federal and provincial ministries, security departments, and agencies involved in completing “two very difficult action plans” in a limited duration.

Pakistan was placed on the FATF grey list in June 2018 and was urged to strengthen anti-money laundering and increase the fight against financing terror.

Since then, Pakistan enacted several laws against money laundering and terror financing and initiated legislative amendments to comply with FATF criteria.

Being on the FATF list means the country will face enhanced monitoring procedures. While there are no direct economic consequences, the listing impacts the country’s ability to attract foreign investment.