FATF Session and Pakistan‘s Case

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The last Plenary of the FATF under the German Presidency of Dr. Marcus Pleyer concluded recently, following four days of hybrid meetings in Berlin, Germany. Delegates from over 200 jurisdictions of the Global Network participated in these discussions, with a significant number of participants once again able to travel for on-site meetings. FATF members approved a report that will help the real estate sector to better detect and prevent money laundering, and finalised a targeted update on implementation of the FATF requirements on virtual assets and virtual asset service providers. FATF also approved releasing a white paper for public consultation on potential revisions to Recommendation 25 on transparency and beneficial ownership of legal arrangements. Under the German Presidency, the FATF made it a priority to explore the opportunities and challenges of digitalisation in the fight against money laundering and terrorist financing. At this Plenary, the FATF finalised a report that shares good practices and recommendations for combating money laundering and terrorist financing by sharing information while adhering to data protection and privacy. This is the first report that provides tangible examples of information sharing initiatives with analysis of the data protection implications. It highlights the importance of collaboration and cooperation between anti-money laundering and data protection authorities. In Pakistan’s case, FATF has acknowledged the completion of Pakistan’s both Action Plans (2018 and 2021) 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 early completion of the 2021 Action Plan in a record timeframe. Pakistan continued its relentless efforts towards successful completion of these Action Plans despite many challenges including the COVID 19 pandemic. Pakistan remains under the FATF radar ever since the region raged with War on Terror. It emerged amongst the states that have shown maximum cooperation and intent to mitigate this global challenge nevertheless its status in the FATF remains steering and wobbling over the period. FATF added the terror financing clause in the year 2001 expanded its scope of surveillance, since then it has kept Pakistan under its critical scrutiny. The country has spent three years from the year 2012 to 2015 in the grey list status of the FATF. It has been dealing with the looming uncertainty of FATF compliance protocols through legislative measures and vowing full cooperation is aligned with the guiding principles of FATF protocols. Despite numerous constraints, Pakistan has effectively dealt with the challenges of money laundering and terror financing issues. It has carried out a comprehensive reformative measure mechanism to consolidate the surveillance, monitoring, and accountability. In particular, during the worst global pandemic crisis, it kept its ambitions and goals intact vis-à-vis addressing this alarming challenge. Addressing all key assigned points by FATF is an accomplishment that the majority of other grey list status designated states have not been able to contemplate so far. It is pertinent to mention that Pakistan worked on FATF compliance protocol to ensure 100% vigor and transparency in its domestic financial affairs.  Pakistan has positively executed key aspects of UNSC Resolutions 1267 and 1373 and frozen bank accounts and assets of proscribed organizations efficiently than any other state with greylist status. In the account of this through the National Action Plan (NAP), The National Counter Terrorism Authority (NACTA) has devised inclusive strategies to further consolidate 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. The World Bank had conducted a mutual evaluation on Pakistan, based on FATF’s assessment guidelines. The 218-page report lists in detail the steps that had already been taken by Pakistan till then in respect of prevention, criminalization of money laundering, and terrorist financing. The evaluators of that particular report acknowledged the government of Pakistan for their remarkable commitment to the assessment of the FATF.

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