Pakistan’s ‘grey list’ status to be decided after FATF on-site visit

Islamabad: The global illicit financing watchdog on Friday announced that Pakistan has completed its action plan and the country’s ’grey list’ status will be decided after an on-site visit.

During its June 2022 plenary, the Financial Action Task Force (FATF) said that it will “conduct an on-site visit at the earliest possible date” to verify the implementation of Pakistan’s relevant anti-money laundering and terrorism-financing reforms.

The outcome was announced after the FATF plenary meeting was held in Berlin, Germany, from June 14 to June 17. The group noted that Pakistan largely addressed its 2021 action plan ahead of the set times.

The international financial crime monitoring group said that “Pakistan has substantially completed its two action plans, covering 34 items, and warrants an on-site visit to verify that the implementation of Pakistan’s AML/CFT reforms has begun and is being sustained and that the necessary political commitment remains in place to sustain implementation and improvement in the future.”

The group in its statement lauded Pakistan’s “high-level political commitment” since June 2018 to work with the FATF and Asia Pacific Group on Money Laundering (APG) to address deficiencies in its anti-money laundering (AML) and combating the financing of terrorism (CFT) regime that led to “significant progress.”

In particular, the country that there is a positive upwards trend in the number of money laundering investigations and prosecutions being pursued in Pakistan.”

Pakistan’s Ministry of Foreign Affairs said in its statement that FATF has acknowledged the completion of Pakistan’s 2018 and 2021 action plans and “has authorized an onsite visit to Pakistan, as a final step to exit from the FATF’s grey list.”

The FATF members while participating in the discussion on Pakistan’s progress, congratulated Pakistan for completing both Action Plans covering 34 items, and especially on the completion of the 2021 action plan in a record timeframe.

“The engagement with FATF has led to the development of a strong AML/CFT framework in Pakistan and resulted in improving our systems to cope with future challenges” the statement reads.

State Minister for Foreign Affairs Hina Rabbani Khar, who is also the head of national FATF coordination committee, led Pakistan’s delegation and presented the overall progress at the FATF plenary meeting this week.

Pakistani officials were confident that the global money-laundering watchdog would remove the country from its grey in June 2022 after complying with all of the FATF action plans. Hammad Azhar, who had been overseeing the implantation of FATF-related legislation in Pakistan until April 2022, expressed hopes that persistent efforts during the Imran Khan government from September 2018 to March 2022 would soon pay off and get the country off the grey list. Azhar lauded the efforts of all ministries and security departments and agencies involved in this regard.

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 but the listing impacts the country’s ability to attract foreign investment as well as the country’s imports, exports, remittances and access to international lenders.