The Financial Action Task Force (FATF) announced to retain Pakistan on the grey watch list acknowledging its ‘high-level political commitment to work’.
“Since June 2018, when Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counter‑terrorist financing-related deficiencies, Pakistan’s continued political commitment has led to significant progress across a comprehensive CFT action plan,” a statement issued after the sixth Plenary of FATF under the German Presidency of Dr Marcus Pleyer concluded said.
The statement went on to add that Pakistan has completed 26 of the 27 action items in its 2018 action plan.
“The FATF encourages Pakistan to continue to make progress to address, as soon as possible, the one remaining item by continuing to demonstrate that TF investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups,” it added.
FATF stated that in response to additional deficiencies later identified in Pakistan’s 2019 APG Mutual Evaluation Report (MER), in June 2021, Pakistan provided further high-level commitment to address these strategic deficiencies pursuant to a new action plan that primarily focuses on combating money laundering.
“Since June 2021, Pakistan has taken swift steps towards improving its AML/CFT regime and completed six of the seven action items ahead of any relevant deadlines expiring, including by demonstrating that it is enhancing the impact of sanctions by nominating individuals and entities for UN designation and restraining and confiscating proceeds of crime in line with Pakistan’s risk profile,” the statement maintained.
“Pakistan should continue to work to address the one remaining item in its 2021 action plan by demonstrating a positive and sustained trend of pursuing complex ML investigations and prosecutions,” it concluded.
Meanwhile, FATF added United Arab Emirates to its grey list.
In addition to further FATF scrutiny, countries on the grey list risk reputational damage, ratings adjustments, trouble obtaining global finance and higher transaction costs, experts say.
The UAE, the region’s financial capital and a gold trading hub, will work to implement a FATF action plan to strengthen the effectiveness of its anti-money laundering and counter terrorism financing regime.
In response to the listing, the UAE government said it had a “strong commitment” to working closely with FATF on areas for improvement.
“Robust actions and ongoing measures taken by the UAE government and private sector are in place to secure the stability and integrity of the country’s financial system,” the UAE said in a statement.
