NACTA says it is unable to prepare crucial report for FATF

Published: August 3, 2018
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A FATF meeting. PHOTO: FATF

A FATF meeting. PHOTO: FATF

A FATF meeting. PHOTO: FATF PHOTO: EXPRESS

ISLAMABAD: The National Counter Terrorism Authority (Nacta) has shied away from taking responsibility of preparing the crucial National Risk Assessment report, which is critical to demonstrating to the world that Pakistan is able to combat terrorism financing.

The country’s counterterrorism authority is unwilling to play its national duty at a time when a team of Asia Pacific Group (APG) is arriving Pakistan on Monday on a pre-assessment mission.

The team will reach Pakistan on August 13. The APG is a Financial Action Task Force (FATF) style regional body and reports to FATF on the compliance of its member countries.

“Nacta on Thursday showed its inability to prepare the national document during a meeting of the National Executive Committee (NEC) on Anti-Money Laundering and Terrorism Financing,” according to government officials.

Caretaker Finance Minister Dr Shamshad Akhtar chaired the meeting.

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“NACTA officials informed the NEC that it lacked the capacity to prepare such a comprehensive document,” said the sources.

They requested that the task should be given to the Federal Investigation Agency (FIA), which was earlier responsible for preparing the report, the sources added.

“But,” the sources said, “the FIA also showed its inability to prepare the document, citing the same reasons.”

The NACTA spokesman had not gotten back with a reply when this story was filed.

With effect from June, the FATF has placed Pakistan on the list of countries that financially aid terrorism and promote money laundering.

It has given Pakistan 15 months to prove that the country remains complaint to the AML and the Counter Terrorism Financing framework.

The NEC agreed to form a review group to finalise critical components of the National Risk Assessment (NRA), according to a handout that the Ministry of Finance issued after the meeting.

The NEC also agreed to launch work on the mutual evaluation by APG soon, it added.

What is NRA?

The National Risk Assessment (NRA) report is the most vital document for proving to the world that Pakistan is committed to the global efforts to curb terrorism financing and money laundering.

One of the reasons for placing Pakistan on the greylist was that despite taking numerous steps, Pakistani authorities could not convince the world about its commitments in the absence of any credible documentation.

In its report to the FATF, the International Cooperation Review Group (ICRG) of APG noted that “Pakistan has not provided a copy of its NRA or the SBPs risk assessment to the ICRG, so authorities have not demonstrated whether financial institutions are applying their risk-based approach adequately with the TF risks emanating from Pakistan”.

It further underlined that many terrorist groups are operating in Pakistan and the country needed to demonstrate that it was also applying administrative or criminal sanctions against all UN terrorist groups.

“Information on its national risk assessment of terrorism and TF risk is also needed in order to assess” that Pakistan was also implementing the United National Security Council resolutions to fight against terrorism.

The APG’s pre-assessment mission will also review whether Pakistan was on the right track to achieve its targets – the first few of these to be delivered in January next year.

One of such goals is to “Demonstrate that terrorist financing risks are properly identified, assessed and understood by supervisors and this includes supervisors obtaining up to date and region-specific risk information from Law Enforcement Agencies and the Financial Monitoring Unit to guide their evolving risk-based approach”.

The NEC was informed that in order to ensure compliance with the FATF framework, the SECP took a lead and enforced regulations to better monitor capital markets, non-banking finance companies, insurance companies and associations with charitable and not for profit objects licensed under section 42 of the Companies Act, 2017. The NEC appreciated the SECP’s efforts.

Last week, the SECP and Nacta signed a Memorandum of Understanding (MoU) to coordinate with each other to promote effective implementation of AML/CFT regimes.

The finance ministry stated that the NEC decided to strengthen the federal-provincial coordination to ensure effective coordination among the law enforcing agencies and the concerned provincial departments.

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“Pakistan is committed to take all possible steps in compliance with the FATF Action Plan and ensure effective institutional coordination and swift action to curb the menace of terror financing and money laundering,” said the finance minister.

The caretaker federal cabinet also approved a plan last month to strengthen Pakistan’s institutional framework to ensure compliance with AML and CFT framework.

The cabinet had decided to strengthen the Financial Monitoring Unit that is working without a full-time director-general, indicating that the previous government did not pay much attention to improve FMU working.

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