FATF’s regional body retains Pak on ‘enhanced follow-up’ for sufficient outstanding requirements

PTI, Jun 5, 2021, 12:15 PM IST

Islamabad: The Asia Pacific Group (APG) on Money Laundering, a regional affiliate of Paris-based FATF, has retained Pakistan on ”enhanced follow-up” status for sufficient outstanding requirements while improving the country’s rating on 21 of the 40 technical recommendations of the global watchdog against money laundering and terror financing.

Pakistan was put on the grey list by the Paris-based Financial Action Task Force (FATF) in June 2018 and the country has been struggling to come out of it.

The second Follow-Up Report (FUR) on the Mutual Evaluation of Pakistan released by the APG also downgraded the country on one criterion.

The report said Pakistan was re-rated to ‘compliant’ status on five counts and on 15 others to ‘largely compliant’ and on yet another count to ‘partially compliant.’

Dawn newspaper reported that overall, Pakistan is now fully ‘compliant’ with seven recommendations and ‘largely compliant’ with 24 others. The country is ‘partially compliant’ with seven recommendations and ‘non-compliant’ with two out of a total of 40 recommendations.

All in all, Pakistan is now compliant or largely compliant with 31 out of 40 FATF recommendations.

The reporting date for this evaluation was October 1, 2020, which means Islamabad may have made further progress since then that would be evaluated at a later stage.

“Pakistan will move from enhanced (expedited) to enhanced follow-up, and will continue to report back to the APG on progress to strengthen its implementation of anti-money laundering and combating financing terror (AML/CFT) measures,” the APG said.

Pakistan submitted its third progress report in February 2021 which is yet to be evaluated.

“Overall, Pakistan has made notable progress in addressing the technical compliance deficiencies identified in its Mutual Evaluation Report (MER) and has been re-rated on 22 recommendations,” the APG added.

In the first FUR of February last year, Pakistan’s progress was largely found unchanged — non-compliant on four counts, partially compliant on 25 counts and largely compliant on nine recommendations.

Since then, the government worked aggressively and improved its effectiveness on the AML/CFT system.

Minister for Energy Hammad Azhar, who is also head of the task force on FATF, welcomed the re-rating, saying the results proved the sincerity along with the resolve of the government in complying with the FATF requirements.

FATF’s Mutual Evaluation Report (MER) of jurisdictions is assessed in two domains — technical compliance or legal instruments (40 FATF recommendations) and demonstration of effectiveness (11 immediate outcomes).

Pakistan’s MER was adopted in October 2019 in which the country was rated compliant and largely complaint in 10 out of 40 recommendations.

After the adoption of MER, Pakistan was placed under a post-observation period by the FATF, which expired in February this year.

During the said period, Pakistan carried out major legal reforms with the enactment of 14 federal laws and three provincial laws along with relevant rules and regulations, the paper reported.