Pakistan on FATF grey list: Legislation still needed to meet benchmarks

Pakistan will have to make further legislation on at least two counts to meet three outstanding benchmarks of the 27-point action plan of the Financial Action Task Force (FATF) before the June deadline.

Also, the government will have to submit an updated report within a month to the FATF on the progress on legislation and other steps to be taken to address the outstanding concerns. It was observed that since the government had changed almost three dozen laws over the past year to meet the FATF requirements, there should not be any hurdle in the way of making two more amendments.

Presiding over a meeting of the National Executive Committee (NEC) on Anti-Money Laundering, Finance Minister Dr Abdul Hafeez Shaikh asked the Financial Monitoring Unit (FMU) and chairman of the FATF Coor­dination Committee and Industries and Production Minister Hammad Azhar to immediately finalise the timelines for additional legislation in consultation with agencies of the federal government and the armed forces.

The deadlines should be reasonable to be shared with the FATF and all agencies and stakeholders should act in close coordination to meet the deadlines well in advance. It was observed that Pakistan had made robust progress over the past two years and was being appreciated by the international community, but at the same time it did not send a good message when international commitments and deadlines were missed repeatedly.

The NEC was informed that Pakistan had to update the Paris-based global watchdog on financial crimes on the way forward and its timelines on the basis of observations of FATF plenary and shortcomings pointed out by the FATF assessors within 30 days.

The additional legislation has to cover some weaknesses in the existing framework that limited the authorities from taking action, including imposing sanction or apprehending those acting for or on behalf of designated terrorist entities or individuals and prosecuting targeted persons and entities or those working for them, within certain deadlines.

The three outstanding action points include (i) demonstrating that TF investigations and prosecutions target persons and entities acting on behalf or at the direction of the designated persons or entities, (ii) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions, and (iii) demonstrating effective implementation of targeted financial sanctions against all designated terrorists, specifically those acting for or on their behalf.

An official statement said FMU Director General Lubna Malik briefed the committee on the overall progress achieved on the FATF action plan and outlined efforts under way for the remaining targets to be achieved in due course of time.

She said Pakistan had received international recognition and support for making strides vis-à-vis an exigent action plan given by the FATF.

Sources said the meeting was also informed that reasonable progress had already been achieved on one out of three remaining points, but two areas that required additional legislation would be time consuming.

The finance minister commended the efforts made by the government’s coordination team led by Industries Minister Hammad Azhar in achieving major milestones with reference to the 27-point FATF action plan. “The unity of purpose, team work and meticulous coordination among various ministries and departments concerned have brought Pakistan closer to achieving the target of completing FATF action plan despite enormous challenges,” Mr Shaikh was quoted as saying.

Acknowledging the robust progress demonstrated by the relevant stakeholders, the finance minister called for expediting efforts to fulfil the requirements in the remaining areas. “The strict adherence to timelines would culminate into successful completion of the FATF action plan,” he stressed.

The meeting was attended by the minister for industries, secretaries of finance and law and senior officials of the FMU, FATF secretariat, National Accountability Bureau, Ministry of Foreign Affairs, State Bank of Pakistan, Federal Investigation Agency and military operations.

(Dawn)