FATF takes Pakistan off ‘grey list’

Islamabad welcomes move as positive, timely


Kamran Yousaf October 21, 2022
PHOTO: REUTERS/FILE

ISLAMABAD:

In a major development, the Financial Action Task Force (FATF) on Friday took Pakistan off a global money laundering watchlist, officials said on Friday in a move Islamabad hopes will ease foreign investment and boost the country’s economy.

The international money-laundering watchdog put the country on its so-called grey list in June 2018, after Islamabad failed to implement policies aimed at stamping out money laundering and the financing of international terror groups.

The move severely curtailed exchange flows and discouraged foreign direct investment by putting reams of red tape around even the simplest projects.

In a statement on Friday, the Paris-based organisation said it "welcomes Pakistan's significant progress" in its anti-money laundering efforts.

"Pakistan is therefore no longer subject to the FATF's increased monitoring process," it added.

“The FATF welcomes Pakistan’s significant progress in improving its AML/CFT regime. Pakistan has strengthened the effectiveness of its AML/CFT regime and addressed technical deficiencies to meet the commitments of its action plans regarding strategic deficiencies that the FATF identified in June 2018 and June 2021, the latter of which was completed in advance of the deadlines, encompassing 34 action items in total. Pakistan is therefore no longer subject to the FATF’s increased monitoring process,” read the statement.

“Pakistan will continue to work with the APG to further improve its AML/CFT system,” the statement added.

Separately, the FATF president told a news conference that Pakistan required no further work to do.

Minister of State Hina Rabbani Khar told reporters via video link from Paris, where she attended the FATF plenary, the decision to remove from the FATF grey list was unanimous.

“Alhamdolillah, I am pleased to announce that as a result of our sustained efforts during last four years, acknowledgement of our unwavering political commitment and the successful On-site Visit, FATF has fully recognized completion all substantive, technical as well as procedural requirements of Pakistan’s 2018 and 2021 Action Plans,” she said.

“Consequently, FATF has unanimously decided to remove Pakistan from the list of jurisdictions under increased monitoring”. In simpler terms, Pakistan has been whitelisted by FATF. FATF has already issued a formal public statement announcing this decision,” she added.

Read Officials hopeful Pakistan will exit FATF ‘grey list’

The minister of state said all the political parties and stakeholders deserved the credit, saying there was a bipartisan consensus on the FATF issue.

“I would like to take this opportunity to especially thank our leadership for providing strategic direction, confidence and support to all institutions throughout the process to achieve this key national objective. The success we have achieved today is indicator of what we can achieve when we work together with a sense of purpose and commitment,” she noted.

The two-day plenary apart from other issues examined the assessment of an on-site team that visited Pakistan in September to verify the steps taken by the country to implement the plan of action.

The Foreign Office in a statement said the decision was "much-awaited good news".

"Congratulations to the people of Pakistan," Foreign Minister Bilawal Bhutto Zardari tweeted.

In September, a 15-member FATF team quietly visited Pakistan, a final step before the country’s exit from the grey list. The findings of the team would be discussed and reviewed in the next meeting of the FATF in its upcoming plenary session.

The FATF, in June, had hinted at Pakistan’s removal from the grey list after it concluded that Pakistan complied with the 34-point plan of action and agreed to send its team for the verification of those steps.

Pakistan was placed on the grey list by the FATF in June 2018 for deficiencies in its system to curb money laundering and terror financing. It was first given a 27-point action plan and later another 7-point plan to comply with the FATF’s standards.

The major stumbling block was the prosecution of certain UNSC designated individuals accused of terror financing. Just days before the June plenary FATF meeting in Berlin, Pakistani anti-terrorism court convicted Sajid Mir in terror financing case, something that convinced the FATF members to acknowledge Pakistan’s progress.

Pakistani officials were confident that the FATF team would give a positive assessment of the country’s progress. Officials, however, cautioned that the neighboring country might still use its influence to drag Pakistan’s case.

Also read Pakistan rubbishes India’s 'malicious campaign' ahead of FATF meeting

The United States is believed to have played a key role in ensuring the on-site visit for Pakistan as it expressed satisfaction with the country’s measures to curb terror financing, particularly prosecuting the certain individuals.

The exit from the FATF grey list will restore Pakistan’s image and give confidence to the foreign investors for doing ventures in the country. The grey-listing makes it hard for countries to do financial transactions and raises the cost of doing business.

Pakistan’s removal from the grey list will help give impetus to its struggling economy.

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