Pakistan has done ‘everything’ to get off FATF’s grey list: law minister

Law Minister Dr Farogh Naseem has said that Pakistan has done “everything” to get off the Financial Action Task Force (FATF) grey list, adding that the country’s case is now “actually a test of the FATF’s fairness.”

Talking to Anadolu Agency, Naseem said that the FATF is being used to play politics.

“I’m not being critical against them … but as long as these (FATF) standards are universally applied, and not applied only to Pakistan, and as long as there is no international politics, then we welcome the FATF. Let it be applied to everyone,” he said.

“There should be no international politics, but FATF is being used to arm-twist. Then what can we say?” questioned Naseem.

In June, Pakistan was kept on the FATF’s increased monitoring list — also called the grey list — after having met 26 of the 27 items on the action plan. It was also asked to work on “the deficiencies later identified in Pakistan’s 2019 Asia Pacific Group (APG) Mutual Evaluation Report (MER)”.

“I think we have met all objectives. At the (FATF) October session, Pakistan is going to give a very good roundup of whatever it has done,” Naseem said.

When asked whether Pakistan will exit the list, Farogh replied, “I’m very hopeful.”

Background

Last month, Scott Rembrandt, Head of the US Delegation to the Financial Action Task Force (FATF), who also serves as the Deputy Assistant Secretary for Strategic Policy in the Office, visited Pakistan to discuss the country’s action plan agreed with the forum.

In August, it was learned that Pakistan is now ‘compliant’ or ‘largely compliant’ in 35 of the 40 recommendations put forth by the APG, according to the follow-up MER, an upgrade from the previous assessment in which the country met 31 out of the 40 points in the action plan.

However, the country will stay on the “enhanced follow-up”, and continue to report back to the APG.

Pakistan has to meet all deficiencies identified in the APG action plan as well as one remaining item in the Financial Action Task Force (FATF)’s action plan to move off the ‘grey list’.

“Pakistan has 35 Recommendations rated C/LC (compliant/largely compliant),” said the APG in the ‘3rd Follow-Up Report Mutual Evaluation of Pakistan July 2021’.

“Pakistan will remain on enhanced follow-up, and will continue to report back to the APG on progress to strengthen its implementation of AML/CFT (anti money-laundering/combating the financing of terrorism) measures. Pakistan’s fourth progress report is due 1 February 2022.”

Pakistan has been on the monitoring list since 2018 along with several other countries with deficiencies in the AML/CFT regime.

In June, Pakistan was retained on the FATF increased monitoring list (grey list), after the global anti-money laundering watchdog said that the country had completed 26 out of the 27 action items in its 2018 action plan.

FATF President Marcus Pleyer had said “all deficiencies” must be addressed if a country wishes to be removed from the increased monitoring list, adding that in Pakistan’s case it will have to “largely comply with FATF’s 27 action plan items as well as the deficiencies later identified in Pakistan’s 2019 APG MER”.

With this latest update, Pakistan has another 5 points in the APG action plan, and another 1 remaining item in the FATF action plan.

While the FATF did not give a timeline to Islamabad, Minister for Energy Hammad Azhar, who heads the Pakistani delegation at the FATF, had said in June that the country would complete the remaining item on the action plan in the next three to four months. On the separate APG’s MER action plan, Azhar said Pakistan would address the money-laundering items in the next 12 months.

In order to be removed from FATF monitoring, a jurisdiction must address all or nearly all the components of its action plan.

Once the FATF has determined that a jurisdiction has done so, it will organise an on-site visit to confirm that the implementation of the necessary legal, regulatory, and/or operational reforms is underway and there is the necessary political commitment and institutional capacity to sustain implementation.

If the on-site visit has a positive outcome, the FATF will decide on removing the jurisdiction from public identification at the next FATF plenary. The concerned jurisdiction will then continue to work within the FATF or the relevant FSRB, through its normal follow-up process, to improve its AML/CFT regime.