ISLAMABAD: A 26-point action plan has been designed spanning a period of 15 months in order to avoid being blacklisted by the Financial Action Task Force (FATF), a local media house reported.
The idea of the plan being passed is to stop the financing of terrorist groups like Da’ish and the Haqqani network.
Moreover, the discussion on the action plan began by the global intergovernmental body working to combat money laundering and terrorist financing.
A formal announcement about Pakistan’s fate is expected on Friday. This is for the first time that all 26 actions have been published in detail.
The plan that the International Cooperation Review Group (ICRG) of Asia Pacific Group (APG) submitted to the FATF Plenary also requires Pakistani authorities to proactively cooperate with counterpart bilateral agencies.
According to reports, the Ministry of Finance stated that Pakistan will have to deliver on the first goal by January next year and complete all the 26 actions by September 2019.
In February 2018, the FATF approved the nomination of Pakistan for monitoring under its International Cooperation Review Group (ICRG) commonly known as Grey List.
The ICRG of the APG has identified four key areas of concerns, including deficiencies in the supervision of Anti-Money Laundering (AML) and Counter-Terrorism Financing regimes, cross-border illicit movement of currency by terrorist groups, progress on terrorism financing investigation and prosecution and implementation of the United Nations Security Council resolutions 1267 and 1373, for curbing terror financing.
It was further reported that the number of conditions taken into account are the concerns of the UNSC resolutions. This is followed by eight commitments to address the issues regarding terrorism financing prosecution, four are about curbing currency movement across the border and five recommendations relate to improvement in the supervision mechanisms of banks and companies.
Concern 1
It was found that the global bodies highlighted faults in supervision and enforcement of the AML and the CFT controls by financial institutions. The ICRG also found deficiencies in imposing sanctions against financial institutions for AML/CFT violations.
However, Pakistan informed the FATF that it imposed roughly Rs1.7 billion in penalties since 2015 on 31 banks for violating the AML and CFT regimes.
Concern 2
The ICRG assessment was that Pakistan did not demonstrate cooperation between the federal and provincial authorities to prosecute terrorism financing commensurate with its terrorism financing risks.
To address those concerns Pakistan has committed that by January 2019, it will identify, assess and understand both domestic and transnational terrorism financing risks to guide such investigations.
By September 2019, Pakistan will address the key concern of identifying and investigating the widest range of terrorism financing activities like the collection, movement or use of funds by September next year.
It will give special focus to curb cash smuggling, narcotics trafficking, misuse of non-profit organisations, particularly funding of the terrorist groups including Da’ish, Al Qaeda, JuD, Faleh-e-Insaniat Foundation, Lashkar-e-Taiba, Jesh-e-Mohammad, Haqqani Network and persons affiliated with the Taliban.
More importantly by May, Pakistan will show that terrorism financing prosecutions successfully result in effective, proportionate and dissuasive sanctions against natural and legal persons convicted of terrorism financing offences.
It will also proactively provide international cooperation in cases of targeting, investigating and prosecuting terrorism financing cases.
Furthermore, by January 2019 it will determine the risks for financing these terrorist organisations are identified properly and assessed by the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan, in order to tackle the problem.
Concern 3
The global bodies also showed concerns over lack of measures to prevent illicit cross-border transportation of currency, and lack of cooperation with the customs.
Pakistan has committed that within six months it will make sure that the nature of risks of cash couriers being used for terrorism financing are tackled properly.
Concern 4
The lack of implementation of targeted financial sanctions under the UNSC Resolutions 1267 and 1373 was also highlighted by the ICRG.
Moreover, the inability to not freeze the property of UN-designated groups by Pakistan was also identified. Not only that, it needed to make sure that Pakistan was applying administrative sanctions against all UN terrorist groups.
The problem is to be tackled by Pakistan within a year by providing risk assessment-based guidelines. Moreover, it will show that Pakistani financial institutions take immediate actions against designated persons and entities.
Pakistan will also demonstrate effective implementation of TFS against the assets of 1267 and 1373-designated persons and entities and the affiliates of the terrorist organisations.