Aamir Latif
25 June 2021•Update: 25 June 2021
KARACHI, Pakistan
Pakistan will continue to stay on the gray list of the Financial Action Task Force (FATF), the global money-laundering watchdog announced on Friday.
Announcing the decision after a five-day virtual plenary session, FATF President Marcus Pleyer said that Islamabad has made “significant” progress on 26 points of the watchdog’s 27-point action plan for the South Asian nuclear Muslim country.
However, he added one “key issue” of the action plan still needs to be completed, which is about the investigation and prosecution of senior leaders of the UN-designated terror groups.
This is the third extension given to Islamabad since 2018. However, contrary to the past practice, no time period has been given this time. Previously, Islamabad was placed on the gray list for six months.
“Pakistan’s continued political commitment has led to significant progress,” Pleyer said.
The FATF, he added, encourages Pakistan to continue to make progress to address as soon as possible the one remaining item.
The watchdog, he went on to say, recognizes Pakistan’s progress and efforts to address the action plan.
Since February 2021, he noted, Pakistan has made progress to complete two of the three remaining action items.
He said since February 2019, Pakistan has made significant improvements in raising awareness in the private sector about Pakistan's money-laundering risks, and developing and using financial intelligence to build cases.
However, he added, Pakistan is still failing to effectively implement the global standards across a number of areas.
This means, he opined, the risks of money laundering remain high, which in turn can fuel corruption and organized crimes.
“I want to thank the Pakistani government for its continued strong commitment to this process. And I know the authorities will continue to work to make the necessary changes,” he maintained.
Islamabad’s steps
Islamabad has been on the global money-laundering watchdog's radar since June 2018, when it was placed on its gray list for terrorist financing and money laundering risks after an assessment of the country's financial system and security mechanism.
The South Asian nuclear nation has since thrice escaped being placed on the watchdog's financial crime blacklist with the support of Turkey, China and Malaysia.
According to the FATF charter, a country must have the support of at least three member states to avoid blacklisting.
In recent years, Islamabad has taken some major steps under the plan, which include strict checks on opening of new bank accounts, and ban on foreign currency transactions without a national tax number and currency changes of up to $500 in the open currency market without the sides submitting a copy of their identification documents.
In addition to that, 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.
Last year, an anti-terrorism court sentenced Hafiz Mohammad Saeed, the chief of the Jamaat ud Dawah (JuD), to 11 years in jail in two terror-financing cases – a development widely seen as an attempt to woo FATF members.
Uranium seizure in India
Responding to a question about news reports of the seizure of natural uranium in India last month, Pleyer said: “I am not going to comment on something we haven't assessed.”
The questioner asked if Pakistan is being scrutinized for terror financing, what kind of action plan is there for India to stop it from nuclear proliferation?
“I am aware of the media reports but I am not going to comment on something we haven't assessed. The FATF assesses country's anti-money-laundering and counter-terrorism financing frameworks and comments on the strength of their systems following an assessment,” Pleyer said.
As soon as things are clear vis-à-vis COVID-19 situation, he said, the FATF will schedule the start of the new calibration process for India.
