The Paris-based global watchdog said Pakistan has strengthened its anti-money laundering setup and worked on combating terror financing, besides addressing technical deficiencies.
By Staff Reporter
ISLAMABAD: The Financial Action Task Force (FATF) a global money laundering and terrorism financing watchdog, on Friday removed Pakistan from its gray monitoring list after four years.
The decision was taken at the end of a two-day meeting in Paris, Financial Action Task Force (FATF) president T Raja Kumar said.
“We welcome Pakistan to come out from the grey list of FATF for implementing 34 points action plans. Pakistan’s political leadership assured during onsite inspection team that they will continue undertaking required reforms to continue combating money laundering and terror financing,” Kumar said at a virtual news conference.
The Paris-based global watchdog said Pakistan has strengthened its anti-money laundering setup and worked on combating terror financing, besides addressing technical deficiencies.
“Pakistan had addressed technical deficiencies to meet the commitments of its action plans regarding strategic deficiencies that the FATF identified in June 2018 and June 2021.”
It said Pakistan is no longer “subject to FATF’s increased monitoring process; to continue to work with APG (Asia/Pacific Group on Money Laundering) to further improve its AML/CFT (anti-money laundering & counter-terrorist financing) system”.
The global financial watchdog had set out an action plan of 34 points for Pakistan, of which 27-point action plan was related to terror financing and 7-point action plan was related with money laundering.
Pakistan was placed into the grey list in June 2018. It was given just one year to comply with these 27 action plans, however they failed to comply within reasoned deadline. Then the Covid-19 struck and implementation on 27 action plans slowed down.
The country placed institutional mechanism to fulfill all 27 action plan and passed legislation related to strengthen laws of money laundering and terrorist financing. Then law enforcing agencies strengthened to ensure execution and conviction of proscribed organisations and their affiliates.
When Pakistan successfully implemented most of 27 action plans, the country was handed over a second action plan simultaneously and it became a unique example where two different plans were given for implementing both at the same time. In the last plenary the country was found largely compliant on both action plans.
Then the review mission visited the county last month to gauge whether the country placed institutional and other mechanisms on a permanent basis or not.
A 15-member team of the FATF visited Pakistan from August 29 to September 2, and met officials concerned about the financial system of Pakistan, including the state bank, finance ministry, after which it prepared an onsite report on the country.
Brokerage Arif Habib Limited said the immediate ramification of exiting in the grey list carries reputational implications for Pakistan, whose image was recently further dented by the downgrading of rating by international credit rating agencies like Moody’s.
“With the international community —investors, in particular, the removal from the grey list is likely to strengthen Pakistan’s position, especially with regards to the soundness of our financial systems, and help regain their confidence,” it said.
“Markets are expected to react positively to this news and overall sentiment is likely to remain upbeat for a while. Moreover, going forward, this should also help strengthen Pakistan’s case of re-rating and upgrading by the international credit rating agencies.”
Copyright © 2021 Independent Pakistan | All rights reserved
