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Updated June 25th, 2021 at 17:57 IST

Pakistan's sham fools nobody as FATF keeps Imran Khan's nation on terror funding grey list

In a big embarrassment for Pakistan, the FATF has decided to keep the Imran Khan-led nation on the grey list, upholding its status as a terror sponsor

Reported by: Koushik Narayanan
Pakistan
PTI composite image | Image:self
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In a big embarrassment for Pakistan, the Financial Action Task Force (FATF) has on Friday decided to keep the Imran Khan-led nation on the grey list, refusing to clear Pakistan over being a 'terror sponsor'. This means Pakistan's last-ditch attempt to play the victim card over a suspicious terrorist attack at terrorist-in-chief Hafiz Saeed's residence in Lahore seemingly flopped as the FATF highlighted that it should address the remaining combating financing terror (CFT)-related items by demonstrating that TF (terror finance) investigations and prosecutions target senior leaders and commanders of UN-designated terror groups. 

Keeping Pakistan on the grey list, FATF noted that the Imran Khan-led nation should address the strategically important AML/CFT deficiencies by following six recommendations. FATF urged Pakistan to consider enhancing international cooperation by amending the MLA law while demonstrating that assistance is being sought from foreign countries in implementing UNSCR 1373 designations.

FATF won't let Pakistan off the hook for terror financing

FATF asked Pakistan to demonstrate that supervisors were conducting both on-site and off-site supervision commensurate with specific risks associated with DNFBPs, including applying appropriate sanctions where necessary while also ensuring that proportionate and dissuasive sanctions were applied consistently to all legal persons and legal arrangements for non-compliance with beneficial ownership requirements. 

Further, FATF asked Pakistan to make an increase in ML investigations and prosecutions and that the proceeds of crime continue to be restrained and confiscated in line with the country's risk profile, including working with foreign counterparts to trace, freeze, and confiscate assets. Lastly, it asked Pakistan to demonstrate that DNFBPs are being monitored for compliance with proliferation financing requirements and that sanctions are being imposed for non-compliance.

FATF somehow noted that Pakistan had completed 26 of the 27 items mentioned in its 2018 action plan and noted that the country had made progress to complete two out of three remaining action items on demonstrating that effective sanctions were imposed on terror financing (TF) convictions, but this was insufficient for removal from the grey list.

In June 2018, FATF placed Pakistan on the 'grey list' and asked Islamabad to implement a plan of action to curb money laundering and terror financing by the end of 2019. But later on, due to the COVID-19 pandemic, the deadline was extended. Pakistan has been struggling to avoid being added to a list of deemed countries with anti-money laundering and terrorist financing regulations by the FATF.

APG retains Pakistan on 'enhanced follow-up' status

Last week, FATF's regional affiliate, the Asia Pacific Group (APG) on money laundering had retained Pakistan on ‘enhanced follow-up’ status for enough outstanding requirements. APG also improved the country’s rating on 21 of the 40 technical recommendations of the global watchdog against money laundering and terror financing. The second follow-up report (FUR) on Mutual Evaluation of Pakistan by APG further downgraded the country by one more criteria. 

As per PTI, the APG report stated that the country was re-rated to ‘compliant’ status on five counts and on 15 others to ‘largely compliant.’ Dawn also reported that overall, Pakistan’s status is now fully ‘compliant' with seven recommendations and ‘largely compliant’ with 24 others. Meanwhile, the country is ‘partially compliant’ with seven recommendations but remains ‘non-compliant’ with two out of the 40 recommendations. Overall, Pakistan is now compliant or largely compliant with 31 out of 40 FATF recommendations. The reporting date for this evaluation was October 1, 2020, implying that the nation might have made some progress since then in order for it to be evaluated at a later stage. 

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Published June 25th, 2021 at 17:57 IST

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