Country given four months to implement 27-point action plan
The Financial Action Task Force – an inter-governmental body that combats money laundering, terrorist financing and threats to the international financial system – has decided to keep Pakistan on its grey list for another four months.
The decision was taken at the end of the FATF meeting that was held in Paris from October 13 to October 18. Pakistan has been given till February 2020 to fully implement the FATF’s 27-point action plan.
During the meeting, a Pakistani delegation led by Minister for Economic Affairs Hammad Azhar presented its compliance report.
“Despite a high level commitment by Pakistan to fix these weaknesses, Pakistan has not made enough progress,” Xiangmin Liu, president of the FATF, said in Paris.
“If by February 2020 the country has not made significant progress, we will consider further actions which potentially could include placing the country… on the blacklist,” he said.
Only two countries, North Korea and Iran, are on the FATF blacklist, which severely crimps their access to the global financial system as well as international aid.
The Pakistani government has demonstrated strong political will to implement its action plan,” Liu said.
“We will provide all the necessary training and assistance, and we have called on our members and our global network to help in that regard,” he added.
The FATF, in its statement, said that the country has made major progress on only five of 27 action items, with varying levels of progress made on the rest of the action plan.
Pakistan urged to swiftly implement 10 crucial points
Pakistan has been urged to swiftly implement 10 crucial points of the FATF action plan. The points are listed below:
Earlier, Pakistan had failed to meet the January and May deadlines set by the FATF for implementing its action plan.
The FATF had put Pakistan on its grey list in June 2017 because of deficiencies in the country’s Anti-Money Laundering and Countering of Terrorist Financing regulations.
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.