The Paris-based Financial Action Task Force (FATF) It is unlikely quite yet to drop Pakistan from its grey list, if the findings advanced last Saturday are any indication. True the country’s rating has improved on 21 of the 40 technical recommendations of the FATF against money laundering and terror financing.
But any euphoria on that count must be premature not the least because the country has been retained for what they call “enhanced follow-up” on sufficient outstanding requirements. The second Follow-Up Report (FUR) on Mutual Evaluation of Pakistan released by the Asia Pacific Group (APG) on Money Laundering ~ a regional affiliate of the Paris-based FATF ~ also downgraded the country on one criteria.
The report said Pakistan was re-rated to ‘compliant’ status on five counts and on 15 others to ‘largely compliant’ and on yet another count to ‘partially compliant’. The performance to the west of the Radcliffe Line has been less than satisfactory, to say the least. Overall, Pakistan is now fully ‘compliant’ with seven recommendations and ‘largely compliant’ with 24 others.
The country is ‘partially compliant’ with seven recommendations and ‘non-compliant’ with two out of total 40 recommendations. In a word, Pakistan is now compliant or largely compliant with 31 out of 40 FATF recommendations. The reporting date for this evaluation was 1 October 2020, which means Islamabad may have made further progress since then and that would be evaluated at a later stage.
“Pakistan will move from enhanced (expedited) to enhanced follow-up, and will continue to report back to the APG on progress to strengthen its implementation of anti-money laundering and combating financing terror (AML/CFT) measures,” the APG said. Pakistan submitted its third progress report in February this year and is yet to be evaluated.
“Overall, Pakistan has made notable progress in addressing the technical compliance deficiencies identified in its Mutual Evaluation Report (MER) and has been re-rated on 22 recommendations,” the APG added. At least five recommendations had been rerated to compliant. These pertain to money or value transfer services, higher risk countries, reporting of suspicious transactions, tipping-off and confidentiality and powers of supervisors.
The finance ministry and the Energy minister,Hammad Azhar, who is also head of the task force on FATF, separately welcomed the re-rating, saying the results proved the sincerity along with resolve of the government in complying with FATF requirements.