Pakistan likely to exit FATF’s grey list during global money laundering watchdog’s October 20-21 plenary: Report

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Pakistan is likely to exit the grey list of the Financial Action Task Force (FATF) this week after it was placed in the infamous category since 2018 for failing to check money laundering and terrorist financing, a media report said on Monday.

Pakistan was included in the increased monitoring list in June 2018 for deficiencies in its legal, financial, regulatory, investigations, prosecution, judicial and non-government sector to fight money laundering and combat terror financing considered serious threat to global financial system, the Dawn newspaper reported.

The Paris-based global watchdog on money laundering and terrorist financing said that the first FATF Plenary under the two-year Singapore Presidency of T. Raja Kumar will take place on October 20-21.

Pakistan has made high-level political commitments to address these deficiencies under a 27-point action plan. But later the number of action points was enhanced to 34.

The country had since been vigorously working with FATF and its affiliates to strengthen its legal and financial systems against money laundering and terror financing to meet international standards in line with 40-recommendations of the FATF.

With Pakistan’s continuation on the grey list, it had increasingly become difficult for Islamabad to get financial aid from the IMF, the World Bank, the Asian Development Bank (ADB) and the European Union, thus further enhancing problems for the cash-strapped country.

A 15-member joint delegation of the FATF and its Sydney-based regional affiliate — Asia Pacific Group– paid an onsite visit to Pakistan from August 29 to September 2 to verify the country’s compliance with the 34-point action plan committed with the FATF.

The authorities here had kept the countrywide visit of the delegation low profile and later termed it a smooth and successful visit .

According to the Pakistan’s Foreign Office, the focus of the visit was to validate on ground Pakistan’s high-level commitment and sustainability of reforms in Anti-Money Laundering and Combating the Financing of Terror (AML/CFT) regime and [it] looked forward to logical conclusion to the evaluation process.

The report of the FATF onsite team will be discussed in FATF’s International Cooperation Review Group and plenary meetings.

Delegates representing 206 members of the Global Network and observer organisations, including the International Monetary Fund, the United Nations, the World Bank, Interpol and the Egmont Group of Financial Intelligence Units, will participate in the Working Group and Plenary meetings in Paris.

On the conclusion of the two-day deliberations, decisions of the plenary would be announced.

In June this year, FATF had found Pakistan compliant or largely compliant on all the 34 points and had decided to field an onsite mission to verify it on ground before formally announcing the country’s exit from the grey list that finally took place in August and September.

According to the Dawn newspaper report, the government had given a commitment to the IMF to review by end-June 2022 the implementation of AML/CFT controls by financial institutions with respect to the tax amnesty programme for the construction sector and promised to meet the timelines for the implementation of APG’s 2021 Action Plan.

Pakistan has so far avoided being on the black list of the FATF with the help of close allies like China, Turkey and Malaysia.

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.