FATF/Pakistan and upcoming years

A couple of month ago in the concluding session of the plenary meeting of the FATF, a Paris-based global money laundering and terrorist financing watchdog, includes Pakistan’s review on the agenda. Pakistan is now targeting the full completion of the 2021 action plan on anti-money laundering and combating terror financing by the end of January 2023.
Pakistan has been on the grey list for deficiencies in its counter-terror financing and anti-money laundering regimes since June 2018. In October 2021, the FATF acknowledged Pakistan’s progress on a 27-point action plan on completion of 26 items but retained the country on its “increased monitoring list” to exhibit terror financing investigations against and prosecutions of top cadres of UN-designated terror groups.

At the time, FATF President Dr Marcus Player said Pakistan had to complete two concurrent action plans with a total of 34 items. “It has now addressed or largely addressed 30 of the items,” The most recent action plan of 2021 on money laundering from FATF’s regional affiliate — the Asia Pacific Group (APG) — largely focused on money laundering and had found serious deficiencies. In this new action plan, four out of the seven items now stood addressed or largely addressed.
About the Jurisdictions under increased monitoring are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the “grey list”.
The FATF and FATF-style regional bodies continue to work with the jurisdictions below as they report on the progress achieved in addressing their strategic deficiencies. The FATF calls on these jurisdictions to complete their action plans expeditiously and within the agreed timeframes. The FATF welcomes their commitment and will closely monitor their progress. The FATF does not call for the application of enhanced due diligence measures to be applied to these jurisdictions but encourages its members and all jurisdictions to consider the information presented below in their risk analysis.
The FATF identifies additional jurisdictions, on an on-going basis, that have strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. Several jurisdictions have not yet been reviewed by the FATF or their FSRBs but will be in due course.
Since the start of the COVID-19 pandemic, the FATF has provided some flexibility to jurisdictions not facing immediate deadlines to report progress on a voluntary basis. The following countries had their progress reviewed by the FATF since October 2021: Albania, Barbados, Burkina Faso, Cambodia, Cayman Islands, Jamaica, Malta, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Philippines, Senegal, South Sudan, Uganda, and Zimbabwe. For these countries, updated statements are provided below. Jordan, Mali, Haiti, and Turkey were given the opportunity and chose to defer reporting; thus, the statements issued in June and October 2021 for these jurisdictions are included below, but they may not necessarily reflect the most recent status of the jurisdiction’s regime. Following review, the FATF now also identifies the United Arab Emirates.
About Pakistan
Since June 2018, when Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counter‑terrorist financing-related deficiencies, Pakistan’s continued political commitment has led to significant progress across a comprehensive CFT action plan. Pakistan has completed 26 of the 27 action items in its 2018 action plan. The FATF encourages Pakistan to continue to make progress to address, as soon as possible, the one remaining item by continuing to demonstrate that TF investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups.
In response to additional deficiencies later identified in Pakistan’s 2019 APG Mutual Evaluation Report (MER), in June 2021, Pakistan provided further high-level commitment to address these strategic deficiencies pursuant to a new action plan that primarily focuses on combating money laundering. Since June 2021, Pakistan has taken swift steps towards improving its AML/CFT regime and completed 6 of the 7 action items ahead of any relevant deadlines expiring, including by demonstrating that it is enhancing the impact of sanctions by nominating individuals and entities for UN designation and restraining and confiscating proceeds of crime in line with Pakistan’s risk profile. Pakistan should continue to work to address the one remaining item in its 2021 action plan by demonstrating a positive and sustained trend of pursuing complex ML investigations and prosecutions.

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