Pakistan, South Africa to ink MoU on money laundering

Pakistan has decided to sign a memorandum of understanding (MoU) with South Africa to curb money laundering and enable an exchange of information between the two countries on terror financing.

Fresh out of the inglorious ‘grey list’ of the Financial Action Task Force (FATF), Pakistan’s decision to sign the agreement is part of its continuing measures to strengthen the effectiveness of its regime for anti-money laundering and combating terror financing.

Sources said the federal cabinet has also greenlighted the signing of the agreement with South Africa after it was moved for approval through circulation.

A delegation of the Financial Monitoring Unit (FMU) in Pakistan and the Financial Intelligence Unit in South Africa for the establishment of a channel facilitating the efficient exchange of financial intelligence.

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Under the memorandum of understanding, the two countries will exchange financial intelligence related to money laundering cases and terror financing.

The ministry of law and justice has also approved the draft of the agreement while a no-objection certificate (NOC) has also been obtained from the foreign ministry, sources added.

In October, the global money laundering and financing watchdog removed Pakistan from its list of countries under “increased monitoring” after four years.

Pakistan had been on the “grey list” of the FATF since 2018 because of “strategic counter-terrorist financing-related deficiencies”.

At the FATF meeting in June, the organisation had said Pakistan would be kept on the list until a visit to the country took place to verify progress.

Subsequently, a FATF technical team travelled to Pakistan in late August and the visit was declared a “success” by Pakistan’s foreign office, which said it expected a “logical conclusion” at the next evaluation meeting in October – following which it was finally taken off the list

After placing the country on the grey list in 2018, FATF had given Pakistan a 27-point action agenda, which was later increased to 34-points, related to money laundering, terrorist financing, and action against armed groups and individuals.