FATF says Pakistan will remain on its 'grey list'

Islamabad: Pakistan will remain on the 'grey list' of the Financial Action Task Force (FATF) until it further demonstrates that action is being taken against Jamaat-ud-Dawah chief Hafiz Saeed and Jaish-e-Mohammed founder Masood Azhar who are listed as global terrorists by the United Nations, the global anti-money laundering and terror financing watchdog said on Thursday.

The decision came following the virtual meeting of the Paris-based FATF Plenary which was attended by delegates from 205 members of the Global Network and observer organisations including the International Monetary Fund, the United Nations and the Egmont Group of Financial Intelligence Units.

Addressing a post-plenary conference, FATF President Dr Marcus Pleyer announced that Pakistan remains on the "increased monitoring list", which is another name for the “grey list”.

He said Pakistan has two concurrent action plans with a total of 34 action plan items. "It has now addressed, or largely addressed 30 of the items."

Pakistan was placed on the grey list by the FATF in June, 2018 and was given a plan of action to complete it by October, 2019. Since then the country continues to be in that list due to its failure to comply with the FATF mandates.

The FATF in June retained Pakistan on its 'grey list' for failing to check money laundering, leading to terror financing, and asked Islamabad to investigate and prosecute leaders and commanders of the UN-designated terror groups, including Saeed and Azhar.

It also asked Pakistan to work to address its strategically important deficiencies.

With Pakistan's continuation in the grey list, it is increasingly becoming difficult for the country to get financial aid from the International Monetary Fund, the World Bank, Asian Development Bank and the European Union, thus further enhancing problems for the country.

Pakistan has so far avoided being on the blacklist with the help of China, Turkey and Malaysia.

In a statement, Pakistan said that the FATF in its review recognised considerable progress made by Pakistan on both the Action Plans.

"With regard to the 2021 Action Plan, Pakistan has completed four of the seven Action Plan Items. Pakistan has completed these four Action Plan items much before the timelines prescribed by FATF, while progress on remaining three action items is well underway and it is aimed to complete three action items ahead of timelines set by the FATF,” it said.

The Pakistan delegation in the meeting was led by Energy Minister Hammad Azhar, who is Chairman National FATF Coordination Committee.

"Pakistan is fully committed to completing its both Action Plans in cooperation with FATF and its international partners. The high-level political commitment, which is driving its revamped AML/CFT regime, is widely recognised by the international community,” according to the statement.

Dawn reported that under the new action plan, Pakistan will have to address its strategically important AML/CFT (anti-money laundering/combating the financing of terrorism) deficiencies, including amending various law, demonstrating that assistance is being sought from foreign countries in implementing UNSCR 1373 designations.

The new actions also require Pakistan to demonstrate that proportionate and dissuasive sanctions are applied consistently to all legal persons and legal arrangements for non-compliance with beneficial ownership requirements, show increase in Money Laundering investigations.

Also, the government has to demonstrate that designated non-financial businesses and professions (DNFBPs) are being monitored for compliance with proliferation financing requirements and that sanctions are being imposed for non-compliance.

The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system.

The FATF currently has 39 members including two regional organisations -- the European Commission and Gulf Cooperation Council. India is a member of the FATF consultations and its Asia Pacific Group.