PAKISTAN TO REMAIN ON GRAY LIST UNTIL JUNE DESPITE ‘SIGNIFICANT PROGRESS’

Fri 26 February 2021:

The Financial Action Task Force (FATF) on Thursday decided to keep Pakistan on its ‘grey list’, with the country’s status set to be reviewed next at an extraordinary plenary session in June 2021.

The announcement was made by FATF President Dr Marcus Pleyer at a press briefing from Paris on the outcomes of the FATF’s four-day virtual plenary meeting.

“Pakistan remains under increased monitoring,” Pleyer said, adding that while Islamabad had made “significant progress”, there remained some “serious deficiencies” in mechanisms to plug terrorism financing.

“Three out of 27 [points] need to be fully addressed,” he said, referring to the action plan agreed to by Pakistan.

While reiterating that Pakistan has made “progress”, the FATF president said: “[We] strongly urge completion of the plan [by Pakistan].”

He said Pakistan “must improve their investigations and prosecutions of all groups and entities financing terrorists and their associates and show [that] penalties by courts are effective. As soon as Pakistan shows it has completed these items, FATF will verify and members of FATF will vote.”

FATF President Dr Marcus Pleyer.

Responding to a question by an Indian journalist about prosecution of terrorists in Pakistan, Pleyer clarified that the FATF was not an investigative organisation. “What we assess is the entire system of anti-money laundering [and] the framework. This does not change with incidents per se,” he said.

“What is now essential is that Pakistan completes the action plan.”

Islamabad has been on the global money-laundering watchdog’s radar since June 2018, when it was placed on its gray list for alleged terrorist financing and money-laundering risks.

In recent years, Islamabad has taken some major steps as part of the plan, under which the country will allow no foreign currency transactions without a national tax number and ban currency changes of up to $500 in the open currency market without the sides submitting a copy of their identification documents.

In addition, Pakistan has also proscribed several militant groups and seized their assets, including Jamaat ud Dawah and Jaish-e-Mohammad (JeM) — the groups blamed for several terrorist attacks such as the 2009 deadly Mumbai attacks, killing over 150 people.

Hafiz Mohammad Saeed, the chief of the Jamaat ud Dawah, and other group leaders have been convicted in several terror-financing cases during the last one year — a development widely seen as an attempt to woo the FATF members.

Pakistan’s reaction

Reacting to the decision, Pakistan’s Minister for Industries Hammad Azhar, who led his country’s delegation in the FATF, said Islamabad has completed almost 90% of its current FATF action plan with 24 out of 27 items rated as “largely addressed” and remaining three items “partially addressed”.

“FATF has acknowledged Pakistan’s high level political commitment since 2018 that led to significant progress,” he said in a series of tweets.

Azhar added: “It was also noted by the FATF member countries that Pakistan is subject to perhaps the most challenging and comprehensive action plan ever given to any country.”

“Pakistan remains committed to complying with both FATF evaluation processes and I would like to commend the hard work done by dedicated teams in multiple government departments at federal and provincial tiers,” he concluded.