Pakistan fears global financial sanctions


If failed in implementing the anti-money laundering and counter-terrorism financing legislation by October this year, the country could become victim of serious financial sanctions imposed by leading world financial institutions under the cover of Financial Action Task force, an international “policy-making body” working under the United Nations.
Sources told Pakistan Today that a team from the attorney general of Pakistan’s office is going abroad to improve the counterterrorism financing and anti-money laundering legislation. A policy guideline followed by proper legislation would be implemented across the country.
In its last meeting on June 21 in Oslo, Norway, the global standard setting body for anti-money laundering and combating the financing of terrorism (AML/CFT) titled, The Financial Action Task Force (FATF), has included 12 of its member states, including Pakistan facing with anti-money laundering and counterterrorism financing deficiencies with insufficient progress in addressing these deficiencies.
The FATF, in its meeting, said, “The jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies. The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction.”
These 12 countries or the jurisdictions with strategic AML/CFT deficiencies includes Pakistan, Turkey, Syria, Indonesia, Yemen, Myanmar, Tanzania, Kenya, Ethiopia, Vietnam, Sao Tomé and Principe and Ecuador.
It was decided in the three-day meeting that this jurisdiction has not made sufficient progress since being identified in the public statement. If this jurisdiction does not take significant actions by October 2013, the FATF will call upon its members to apply counter-measures proportionate to the risks associated with the jurisdiction.
If still failed with coming up with proper and combating the financing of terrorism and anti-money laundering legislations the country may face severe financial sanctions that may affect its financial deals with the World bank, the Asian Development Bank and other top financial institutions.
Regarding Pakistan it was clearly stressed in its last meeting, “Pakistan needs to take additional steps to meet the international standards regarding the identification and freezing of terrorist assets, including by further amending its Anti-Terrorism Act. The FATF encourages Pakistan to address the remaining deficiencies and continue the process of implementing its action plan.”
The expected deadline for the proper improvement of the legislation is October this year as FATF holds three meetings every year.
The FATF is an inter-governmental body that was established in 1989 by the ministers of its member jurisdictions.
Its top objectives are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.


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