FATF acknowledges Pakistan’s commitment to sustainable AML/CFT frameworks

International financial watchdog observes Pakistan has completed 26 of 27 action items in its 2018 action plan


New York: The Financial Action Task Force (FATF) in its review meeting recognized Pakistan’s continuing commitment to a sustainable and robust Anti-Money Laundering and Combating the Financing of Terrorism (AML)/CFT) frameworks.

The Financial Action Task Force (FATF) reviewed Pakistan’s progress on both FATF Action Plans in its plenary meeting held on March 4, said a press statement issued by the finance ministry on Saturday.

“The FATF members while participating in discussion on Pakistan’s progress, recognized Pakistan’s continuing commitment to a sustainable/robust AML/CFT frameworks,” the statement said.

It added that Pakistan presented its case in an effective manner and also reaffirmed its political commitment to continue with the efforts to complete the Action Plans.

With regard to the 2018 Action Plan, Pakistan has already completed 26 of the 27 Action Plan items while there was recognition by FATF that Pakistan had made significant progress towards addressing the last remaining action item.

The FATF encouraged Pakistan to continue to make progress to address, as soon as possible, the one remaining item by continuing to demonstrate that terrorist financing investigations and prosecutions are completed against the specified individuals.

With regard to 2021 Action Plan, Pakistan has made swift progress, the statement said adding in just two plenary cycles, Pakistan has completed 6 of the 7 action items while during the current plenary cycle, Pakistan has completed two more action plan items.

The action items that have been completed during February 2022 Plenary cycle, include UN designations and restraining & confiscating proceeds of crime in line with Pakistan’s risk profile.

The remaining one action item includes investigations and prosecutions of money laundering cases in line with Pakistan’s risk profile, on which major work has already been completed and acknowledged by the FATF.

Pakistan is making endeavors to complete the last two remaining items of both the action plans, as early as possible.

It is pertinent to mention here that the FATF Plenary meetings were held in hybrid format from 1-4 March 2022.

The Pakistan delegation attended this meeting virtually and was led by Federal Minister for Energy and Chairman National FATF Coordination Committee, Muhammad Hammad Azhar.

The finance ministry in statement reiterated government’s commitment to take all necessary measures to ensure completion of remaining two Action Plan items during the upcoming FATF plenary cycle, to become eligible for exiting from FATF’s Grey list.

This time around, the watchdog added the UAE to the grey list as well. “Following review, the FATF now also identifies the United Arab Emirates [in the grey list],” the statement said, adding that in February 2022, the UAE made a high-level political commitment to work with the FATF and MENAFATF to strengthen the effectiveness of its AML/CFT regime.

“Since the adoption of its MER in February 2020, the UAE has made significant progress across its MER’s recommended actions to improve its system, including by finalising a TF Risk Assessment, creating an AML/CFT coordination committee, establishing an effective system to implement targeted financial sanctions without delay, and significantly improving its ability to confiscate criminal proceeds and engage in international cooperation,” the FATF statement said. “Additionally, the UAE addressed or largely addressed more than half of the key recommended actions from the MER.”

Among other things, the FATF stated that UAE would work to implement its action plan by demonstrating a sustained increase in outbound MLA requests through case studies and statistics to help facilitate investigation of TF, ML, and high-risk predicates.

According to the statement, the UAE would also identify and maintain a shared understanding of the ML/TF risks between the different DNFBP sectors and institutions.

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