Saturday, February 4, 2023

Pakistan removed from FATF grey list after 4 years

The global money laundering and terrorism financing watchdog has removed Pakistan from a list of countries under “increased monitoring”, also known as the “grey list” after four long years.

The FATF welcomed “Pakistan’s significant progress in improving” its anti-money laundering and counter-terrorism financing policies.

“Pakistan has strengthened the effectiveness of its AML/CFT regime and addressed technical deficiencies to meet the commitments of its action plans regarding strategic deficiencies that the FATF identified in June 2018 and June 2021… Pakistan is therefore no longer subject to the FATF’s increased monitoring process,” announced FATF on Friday.

The announcement was made by Raja Kumar, the president of the Financial Action Task Force, at a news conference in Paris.

Pakistani Deputy Foreign Minister Hina Rabbani Khar, who led the Pakistani delegation to Paris, expressed hope that the decision would “give a much-needed boost to our economy and increase our economic and financial engagement with the outside world.”

Prime Minister Shehbaz Shareef commended the role & efforts of Foreign Minister Bilawal Bhutto, Army Chief General Qamar Javed Bajwa, and their teams in helping Pakistan exit the FATF grey list.

Background

Pakistan was added to the FATF grey list in June 2018. Later Pakistan was given an action plan to address counter-terrorist financing-related deficiencies through legislation and reforms. In August 2022, FATF said that the country has completed all items in its action plan except for one which was related to demonstrating investigations and prosecutions against senior leadership of a UN-declared militants group.

Later, a 15-member technical team of FATF, including counterterrorism experts, visited Pakistan from Aug. 29 to Sept. 5 and met the country’s leadership to know critical measures and reforms implemented, especially regarding anti-money laundering and counter-terrorism financing.

First FATF plenum

This was the first FATF plenum held under T. Raja Kumar’s presidency in Paris. Delegates representing 206 members of the Global Network and observer organizations, including the World Bank, United Nations, IMF, INTERPOL, and the Egmont Group of Financial Intelligence Units participated in the working group’s meetings.

The FATF

Established in 1989, the Financial Action Task Force (FATF) is an inter-governmental body that leads global actions to combat money laundering and terrorist financing in a bid to safeguard the international financial system It has 39 members, including two regional organizations — the European Commission and Gulf Cooperation Council.

Timeline of Pakistan’s case at the FATF

Jun 28, 2018: FATF placed Pakistan on the grey list

Aug 16, 2018: APG highlighted deficiencies in Pakistan’s FATF action following a 12-day scrutiny

May 11, 2019: Pakistan Customs introduced a policy to curb terror financing

July 25, 2019: FBR set up FATF cell

Aug 25, 2019: PM formed a committee to help meet FATF targets

Oct 18, 2019: FATF keeps Pakistan on the grey list and asks authorities to complete full action plan by February 2020

Oct 29, 2019: FATF cell established in the interior ministry

Feb 21, 2020: FATF retains Pakistan on its grey list until June 2020, calls for further actions

Feb 24, 2020: FBR introduces measures for FATF compliance

June 24, 2020: Pakistan’s case not discussed in FATF’s plenary meeting

Aug 17, 2020: Senate passes FATF-related bill

Aug 18, 2020: Senate approves two more FATF-related bills

Sept 16, 2020: Parliament okays three FATF-related bills

Oct 6, 2020: SECP meets all FATF conditions

Oct 23, 2020: Pakistan complies with 21 out of 27 points of the action plan, FATF demands full compliance

Nov 19, 2020: JuD chief Hafiz Saeed is convicted in terror financing case

Jan 8, 2021: SBP amends AML laws to meet FATF conditions

Feb 25, 2021: Pakistan remains on the grey list owing to partial compliance on three actions

June 25, 2021: FATF retains Pakistan on grey list owing to a lack of convictions

July 4, 2021: NAB sets up cell to counter terror financing, money laundering

Oct 21, 2021: Pakistan remains on the FATF grey-list

March 4, 2022: FATF retains Pakistan on the grey list

April 8, 2022: Hafiz Saeed is sentenced to 33 years in jail

June 17, 2022: FATF announces on-site visit to Pakistan to verify implementation and sustainability of the AML/ CFT measures

Sept 2, 2022: FATF and APG delegations conclude their visit to Pakistan

Oct 21, 2022: FATF removes Pakistan from grey list

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