A delegation of the Financial Action Task Force (FATF) will be arriving in Islamabad today (Monday) to meet Pakistani officials and evaluate the measures taken to curb terror financing and money laundering in the country.
The team will be meeting officials of the finance ministry, interior ministry, Foreign Office, FIA and National Counter Terrorism Authority.
The Pakistani authorities will be briefing the FATF team on the measures the country has implemented to stop money laundering and curb the financing of terrorist activities.
It is expected that discussions between the FATF delegation and Pakistani authorities will continue till Wednesday.
The delegation will present its report on the state of money laundering and terror financing in Pakistan at its review meeting. What’s in that report will either land Pakistan on the black list or get its name off the grey list.
Pakistan has criminalised both money laundering and terrorist financing but has not been able to enforce these laws effectively. Being on the grey list doesn’t come with any sanctions, but if we remain on this list, we face the risk of being put on the black list. This is where it gets problematic.
Being on the black list means our banking system will be regarded as one with poor controls over AML and CFT standards — forget bringing PayPal to Pakistan, expatriates will find it difficult to send remittances and traders’ cost of business will increase because our banks will face higher scrutiny in international payments and foreign banks might not even do business with Pakistani banks. The government, too, will struggle to raise funds from international markets if we are placed on the black list.
Pakistan has been on and off the grey list in the past. The last time we were removed from the grey list was in February 2015. If the ongoing consultations between the FATF and the Pakistani government are successful, we will be taken off the grey list and placed on the white list.
Pakistan is among 83 countries with a risk score of 5.0 or above. These are countries that could be loosely classified as having a significant risk of money laundering and terrorist financing, according to the Basel AML Report 2018, an independent annual ranking that assesses the risk of money laundering and terrorist financing in 129 countries.
Recently, Pakistan froze the accounts and seized the assets linked to organisations banned by the United Nations Security Council.