The Asia-Pacific Group of the FATF, a global watchdog on terrorist financing and money laundering, rated Pakistan’s level of effectiveness as “low” on 10 out of 11 international anti-money laundering targets. and terrorist financing, according to a media report said Tuesday.
The Asia-Pacific Group (APF), the regional affiliate of the Financial Action Task Force (FATF) based in Sydney, released an update on September 2 on the rating of its regional members suggesting that Pakistan had a “level moderately effective” on just one out of 11 results, Dawn reported.
As part of this “immediate outcome”, Pakistan expands international cooperation on proper information, financial intelligence and evidence and facilitates action against criminals and their assets.
A joint 15-member FATF and APG delegation conducted an on-site visit to Pakistan from August 29 to September 2 to verify the country’s compliance with a 34-point action plan undertaken with the FATF no later than high level in June 2018, according to the report.
The task force had found Pakistan compliant or largely compliant on all 34 points in February this year and decided to send a mission there to verify it on the ground before officially announcing the country’s exit from the gray list. .
Under the FATF-APG assessment mechanism, actual ratings on “immediate outcomes” reflect the extent to which a country’s measures are effective.
The assessment is conducted on the basis of 11 immediate outcomes, which represent the key objectives that an effective anti-money laundering and countering the financing of terrorism (AML/CFT) system should achieve.
However, this has no direct bearing on an expected removal of Pakistan from the FATF gray list at its October 18-22 plenary in Paris.
Last month, the APG rated Pakistan “compliant” or “largely compliant” with 38 of the FATF’s 40 technical recommendations on combating money laundering and terrorist financing. It had, however, withheld Islamabad on “enhanced follow-up” until further progress was made on the two remaining recommendations.
This means that Pakistan has made major progress on the FATF technical recommendations to qualify to be removed from the “grey list”, but it is still far behind the FATF immediate results in effectiveness.
The APG noted that Pakistan had a low level of effectiveness out of 10 “immediate results (IO)” under international standards against money laundering and terrorist financing.
The first IO on which effectiveness is rated moderate is that money laundering and terrorist financing is understood and, where appropriate, coordinated actions at the national level to combat money laundering and terrorist financing and proliferation, the report says.
There are nine other IOs for which Pakistan has been classified as having a “low level of effectiveness”.
Objectives 7 and 8 require that ML offenses and activities are investigated and that offenders are prosecuted and subject to effective, proportionate and dissuasive sanctions are taken and that the proceeds and instrumentalities of crime are confiscated .
Similarly, Objectives 9 and 10 require that terrorist financing offenses and activities be investigated and that those who finance terrorism be prosecuted and subject to effective, proportionate and dissuasive sanctions and that terrorists , terrorist organizations and terrorist financiers are prevented from raising, moving and using funds, and from abusing the non-profit sector.
Immediate outcome 11 requires that individuals and entities involved in the proliferation of weapons of mass destruction are prevented from collecting, moving and using funds, in accordance with relevant United Nations Security Council resolutions, according to the Dawn report.
Coming off the FATF gray list will restore Pakistan’s image and give confidence to foreign investors to do business in the country. The gray list makes it difficult for countries to conduct financial transactions and increases the cost of doing business.
Pakistan’s removal from the gray list will help give a boost to its struggling economy, experts say.PTI SH RUP RUP RUP RUP
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