ISLAMABAD : The Asia Pacific Group (APG), an FATF-style regional body on money laundering, urged Pakistan on Monday to intensify actions against the non-profit organisations suspected of giving financial aid to terrorist groups and bring more transparency in the steps it is taking over proliferation matters.
Technical experts of the APG started the 3rd Mutual Evaluation process of Pakistan that will end on the 19th of this month. The technical experts from the US, the UK, Turkey, Maldives, Indonesia and China have started assessing the steps taken by Pakistan to meet the FAFT recommendations.
The purpose of the visit is to gauge the effectiveness of Pakistan’s Anti-Money Laundering (AML) and Counter Terrorism Financing (CTF) regime under the FATF effectiveness methodology.
The APG visit has begun six days before the FATF plenary meeting in Paris from the 14th of this month.
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Pakistan is exposed to the scrutiny of the APG and the FATF after being grey-listed with effect from June this year.
“In Paris, a joint group would submit its analysis report to FATF’s International Cooperation Review Group (ICRG) and its recommendations on the basis of Pakistan’s Action Pan,” sources in the finance ministry said. A four-member Pakistani delegation would visit Paris to represent the country.
On the first day, discussions with the technical experts took place on assessing risks to the AML and CTF regimes in the light of the FATF guidelines.
Both the sides also discussed targeted financial sanctions related to terrorism and terrorist financing, targeted financial sanctions related to proliferation, non-profit organisations and secrecy laws of financial institutions.
On Monday, the APG delegation met the officials of the Financial Monitoring Unit (FMU), the Federal Intelligence Agency (FIA) and the Anti-Narcotics Force (ANF).
The FMU informed the delegation about the legal and regulatory changes that Pakistan has made in the past couple of months.
Pakistan has also decided to enact a law to create deterrence against the transfer of money through non-banking channels by enhancing punishments.
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The Pakistani authorities have decided to bring amendments to the FIA Act of 1974, the Foreign Exchange Regulations Act of 1947 and the Anti-Monetary Laundering Act of 2010.
The FIA informed the APG delegation that it would have the authority to access bank accounts to check money laundering.
“Moreover, use of cash in the Pak-Afghan trade would also be discouraged in order to curb smuggling of currency across the borders,” said the sources.
The FIA shared with the APG experts that it has technical abilities to investigative the NPOs that are suspected of supporting terrorism financing.
However, the sources said the APG delegation had some reservations over slow action on high-risk areas like banks, securities, insurance companies and asset management companies.
Their concern was that some of those sectors have not yet been regulated adequately.
On the issue of non-proliferation, the APG delegation was informed that Pakistan was taking all necessary steps against Iranian and North Korean designated persons without any delay, according to the sources.
The visiting delegation was informed that the existing laws and regulations were adequate to address the concerns related to Iran and North Korea.
But the APG experts sought more transparency in those actions, urging the Pakistani authorities to made public notifications issued in the past to curb proliferation with regard to North Korea and Iran, the sources said.
The Pakistani authorities were required to issue guidelines related to proliferation, they added.
While discussing the actions against terrorist outfits under the United Nations Security Council resolutions, the APG underscored that there was a need for further coordination and oversight by the federal and provincial authorities, the sources added.
Another issue that Pakistan faces is the identification of non-profit organisations according to the methodology determined by the FATF guidelines.
In this regard, the SECP has recently taken a number of measures to improve compliance.
The APG authorities were satisfied with Pakistan’s actions to implement the FATF guidelines on secrecy laws of the financial institutions.
The experts were informed that the laws did not contradict the FATF guidelines. The companies are also filing cash and suspicious transactions reports to the FMU.