FATF’s Asia Pacific Group keeps Pakistan on ‘Enhanced Follow-up List’

Financial Action Task Force (FATF) Asia Pacific group has kept Pakistan in its ‘Enhanced Follow Up’ list. The organisation had downgraded Pakistan status from “regular follow-up” to “enhanced follow up”. The Asia-pacific group of FATF submitted its report called “Follow up report on mutual evaluation of Pakistan”. In the report, it was highlighted that the progress of Pakistan to combat the Financing of terror system and anti-money laundering made by the Financial Action Task Force has remained unchanged in 2020 as compared to that of 2019.

Highlights

  • Enhanced follow up status means the country need to provide monthly reports of its compliance to the Financial Action Task Force.
  • As per the report, Pakistan complied with only two of the 40 recommendations of Financial Action Task Force.

Mutual Evaluation Report (MER)

  • The MER also highlighted the gaps in the process of developing and identifying threats, vulnerabilities and risks.
  • This report came after Pakistan published a National Risk Assessment (NRA) 2017, on Money Laundering and Terrorism Financing.
  • The MER highlighted that 2017 NRA had not been circulated to private sector stakeholders and they were are not yet subjected to  the comprehensive Anti-money Laundering and Terrorist Financing measures.

Pakistan’s Stand

After the reports were published,  Pakistan highlighted its “significant progress” to implement the FATF’s plan of action. Officials said that Pakistan is unlikely to be placed in the FATF’s black list. They cited tgat the country is getting support from China, Malaysia and Turkey to veto upon such move.

Pakistan’s actions against terrorism

Pakistan was put under the FATF grey list in 2019. After that, Pakistan passed three bills to combat the terrorism and money laundering:

  1. Anti-terrorism act (Amendment) Bill 2020,
  2. Anti-money laundering (Amendment) Bill and
  3. Islamabad capital territory Waqf properties bill.