The FATF Plenary met under the German Presidency of Dr. Marcus Pleyer that included delegates of 205 members and observer organizations such as the IMF, UN and Egmont Group of Financial Intelligence Units. The plenary reviewed the report of the Asia Pacific Group (APG) on Pakistan’s compliance with the Action Plan of the FATF. It was once again decided to maintain Pakistan’s status on the “Grey List”, while noting that “continued political commitment has led to significant progress”. With 26 out of 27 points implemented, one point remains unimplemented for which no timeline has been given.

Through various bills and amendments, the government had diligently worked to satisfy the FATF. These related to laws against money laundering, freezing of assets and filing of cases against proscribed organizations, and all of this was reflected in the APG’s report that was published earlier this month.

Following the last plenary in February, the watchdog had noted that despite “significant progress”, Pakistan would remain under increased monitoring as “there remained some serious deficiencies in mechanisms to plug terrorism financing”.

To recall, earlier this month the Asia Pacific Group (APG) on Money Laundering had upgraded Pakistan’s rating on 22 out of the 40 technical recommendations of the FATF that related to money laundering and terror financing. Looking at the overall picture, Pakistan has implemented 26 out of 27 points in the FATF Action Plan. As far as the technical recommendations are concerned, Pakistan is compliant or largely compliant with 31 out of 40 recommendations: “compliant” with 7 recommendations, “largely compliant” with 24, “partially compliant” with 7 recommendations, and “non-compliant” with 2 recommendations.

The recommendations on which Pakistan had been upgraded to “compliant” related to money/value transfer services, higher risk countries, reporting of suspicious transactions, confidentiality and power of supervisors. Recommendations on which Pakistan is “largely compliant” relate to risk assessment, targeted financial sanctions related to proliferation, non-profit organizations, politically exposed persons and reliance on third parties. There were two recommendations on which Pakistan was down-graded to “non-compliant” that related to mutual legal assistance (MLA) with other countries and freezing/confiscation of assets and accounts.

Courtesy – AHL Research