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FATF Retains Pakistan on ‘Grey List’

by Staff Report

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Islamabad still has two remaining action items of the 34 it is required to complete to be whitelisted by the Paris-based watchdog

The Financial Action Task Force (FATF) on Friday retained Pakistan on its terrorism financing “grey list,” noting that even though the country had made “significant progress,” it must complete the remaining two points of the 34 action items to address the remaining deficiencies in its financial system.

Noting that Islamabad had already completed 26 of the 27 action items of its 2018 action plan, the Paris-based global money laundering and terrorist financing watchdog said it had also completed six of the seven action items that had been added in June 2021.

“Since June 2018, when Pakistan made a high-level political commitment to work with the FATF and APG [Asia-Pacific Group] to strengthen its Anti-Money Laundering (AML) and Combating the Financing of Terrorism (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,” read a statement issued after a plenary meeting of the watchdog.

Encouraging Pakistan to continue its progress in addressing the remaining action items by continuing to demonstrate that terror financing investigations and prosecutions target senior leaders and commanders of U.N.-designated terrorist groups, the FATF noted Islamabad had also provided further high-level commitment to address the “strategic deficiencies [identified by the APG] pursuant to a new action plan that primarily focuses on combating money laundering.”

“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,” it added.

In a statement, the Finance Division said the FATF had “recognized Pakistan’s continuing commitment towards sustainable, robust AML/CFT frameworks.” Maintaining that Pakistan had presented its case “in an effective manner and also reaffirmed its political commitment to continue with the efforts to complete the action plans,” it said the country aimed at completing the last two remaining items of both action plans “as early as possible.”

Officials have said Pakistan hopes to fully comply with both remaining action items by the end of January 2023.

In a series of posts on Twitter, Energy Minister Hammad Azhar—who headed Pakistan’s team during FATF’s review—reiterated the country had only 2 items left to complete its action plan. “A number of countries believe that we have already completed this plan,” he claimed. “Pakistan’s completion of FATF technical parameters shall be acknowledged soon, despite challenges. Our fight against ML and TF continues with an unwavering national resolve. We wage war on these activities not just for global compliances but first and foremost for our own sake,” he added.

Pakistan was placed on the grey-list in 2018, which made foreign firms more cautious about investing in the country.

The FATF also added the United Arab Emirates to its increased monitoring list, also known as the “grey list”, of countries with inadequate controls over terrorism financing.

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