FATF Duplicity towards Pakistan



The Financial Action Task Force (FATF) has decided to keep Pakistan on its grey list while acknowledging that the country has fully implemented 26 out of 27 points of its action plan.

The anti-money laundering watchdog has also given another six-point action plan pertaining to the Mutual Evaluation Report (MER) Process to Islamabad.

As far as Pakistan is concerned, it has been under the radar of FATF for the past two decades and putting all of its efforts to fulfill the unconventional policy measures and plan of actions that have been subtle, discriminative. From being the frontline actor against the war on terror to the staunch advocate of global peace and prosperity it has contributed to the [cause] more than any other country in the world. Despite its resilient efforts and utmost cooperation in the year 2018, the global watchdog, the Financial Action Task Force (FATF) placed Pakistan on the so-called ‘grey list’ citing its measures minimum against the money laundering and terror financing Although, It has taken stringent reformative measures and able to address 26 of the 27 action items, nevertheless, to “avert grey list status,” FATF urged to overcome punitive residual strategic deficiencies through inclusive national policies aligned with the suggested recommendations in the given grace period till the next month. It is pertinent to highlight that the political and institutional commitment has never been taken into account by the FATF regional body by taking the final verdict against Pakistan. Over the period, different national institutional agencies- The NACTA, FIA FBR, State Bank of Pakistan, and the Securities and Exchange Commission of Pakistan have done a commendable job to ensure the enhanced surveillance over money laundering and terror financing activities in the country.

NACTA has taken radical measures to further robust counterterrorism measures through developing an integrated strategy for addressing the plausible vulnerability of Terror Financing and Money Laundering all across the country at the regional and provincial levels. One of the key successes that Pakistan has attained in its aligned principles to FATF is the successful adoption of proscribed UNSCR resolutions 1267/1989/1988, and UNSCR 1373 through two drafting two different reformative measures. Pakistan gives domestic effect to UNSCR 1267 by issuing Statutory Regulatory Order (SROs) following an update to listings by the UN. Despite recent improvements in implementing UNSCR 1267 without delay, there are numerous instances where SROs were issued several days after changes to listing at the UN, Pakistan has banned the proscribed 66 entities and approximately held 7,600 individuals, but the public list on NACTA’s website included very limited identification information.

In the financial sector, Pakistan has established twofold technical compliance with FATF proposals, and crucial enhancements that required for the viable execution of preventive measures. Despite unprecedented challenges, Pakistan has successfully implemented the FATF plan of action to curb money laundering and terror financing more swiftly than any other country in the world. FATF must acknowledge Islamabad’s efforts and also based on its performance and proactive engagement intent it must give concessions and exempt the grey list status. Any further coercive move would prove fatal for the role of Pakistan in combating the regional counterinsurgency measures and it will also hamper the previous reforms taken in compliance with the FATF Protocols. FATF should review its model about the ML/TF. No state can fully execute the idealistic approach to completely subvert the menace of ML/TF. The majority of the states in particular India despite clear pieces of evidence of Money laundering and Terror Financing went unchecked. This duplicity must be denounced to ensure, and appraise the performance of a state in true spirits.

The FATF has declared the UK AML policy model perfect in compliance with its policy reforms. However, on the other hand, the UK-based Royal United Services Institute (RUSI) and The US Department of State Bureau of International Narcotics and Law Enforcement Affairs designated the UK as one of the key actors in global illegal money inflow/ outflow. This creates a paradox and it also raises grave concerns regarding the FATF policy model. Given the assertion, the UK also hasn’t been able to curb the money laundering and terror financing activities completely because of its ambiguous configurations. Therefore, expecting Pakistan to implement 100 percent of its given policies is a wild goose chase in the dark. It has shown considerable improvement over the period and also vows full cooperation in the foreseeable future.

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