Order passed as part of FATF conditions
The Sindh government has instructed mosques across the province to provide details regarding their sources of income to the Auqaf Department.
A questionnaire was sent to Sindh’s mosques on Saturday. The government has told the administration of the mosques to provide income details of the shops and houses owned by them as well.
The prayer leaders and imams of the mosques have been asked for details of the donations collected on Fridays.
The government said that information has been summoned under FATF conditions.
Earlier this year in February, the Financial Action Task Force decided to keep Pakistan on its grey list, with another review scheduled for June 2021.
The FATF is an inter-governmental body that combats threats to international financial system. A potential downgrade to the FATF blacklist has serious implications for Pakistan.
Being on the blacklist means the country’s banking system will be regarded as one with poor controls over Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT).
FATF doesn’t impose any sanctions directly, but its guidelines are taken seriously by global financial institutions. This means overseas Pakistanis who send remittances to Pakistan will be subject to more scrutiny. The traders who deal in imports and exports will suffer because they have to make and receive payments with the help of international banks that may either increase the cost for Pakistani banks or simply not do business with them.
The implications for the economy as a whole can be far more serious. Being placed on FATF’s blacklist can affect capital inflows and lower investment to Pakistan, thus hurting the ongoing IMF programme. Raising funds from global capital markets will be difficult, which will undermine the country’s ability to pay foreign debt.
In February 2020, the FATF expressed concerns over “Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the Terrorist Financing risks emanating from the jurisdiction,” it said in a report.
The global watchdog for illicit financial activities had put Pakistan on its grey list in June 2018 because of weaknesses in the country’s AML and CFT regimes.
The grey list refers to countries or jurisdictions under increased monitoring because of strategic AML and CFT deficiencies. After being placed on the grey list, Pakistan had developed an action plan with the FATF to address those deficiencies, but fell short of targets.
The deadline was initially June 2020. But it was first extended to September 2020 and then to February 2021. It has now been extended until June 2021.