FATF wants Pakistan to impose financial sanctions on designated terrorists

–Task force asks Pakistan to provide first report on actions taken until Nov 19

The Financial Action Task Force (FATF) on Friday demanded Pakistan impose “financial sanctions” on the designated terrorists as well as entities, in addition to other measures against money laundering and financial assistance to terrorists.

Pakistan and FATF’s Asia Pacific Group (AGP) delegation recently held talks for a week and half in the capital. In the last meeting on Friday, the FATF delegation held talks with Pakistani officials and presented them an initial report.

“In June 2018, Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counter-terrorist financing-related deficiencies,” the task force said in its press statement.

RECOMMENDATIONS:

The FATF stressed upon Pakistan to implement its action plan to accomplish the following objectives:

(1) demonstrating that TF risks are properly identified, assessed, and that supervision is applied on a risk-sensitive basis; (2) demonstrating that remedial actions and sanctions are applied in cases of AML/CFT violations, and that these actions have an effect on AML/CFT compliance by financial institutions; (3) demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS); (4) demonstrating that authorities are identifying cash couriers and enforcing controls on illicit movement of currency and understanding the risk of cash couriers being used for TF; (5) improving inter-agency coordination including between provincial and federal authorities on combating TF risks; (6) demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and persons and entities acting on behalf or at the direction of the designated persons or entities; (7) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions and enhancing the capacity and support for prosecutors and the judiciary; and (8) demonstrating effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1267 and 1373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services; (9) demonstrating enforcement against TFS violations including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases; (10) demonstrating that facilities and services owned or controlled by designated person are deprived of their resources and the usage of the resources.

The task force has also asked Pakistan to provide the first report until November 19. Its team will visit Pakistan next in March or April of 2019. The FATF said it will closely monitor the implementation of the action plan.

The FATF Asia Pacific Group will make the report related to Pakistan public in July 2019, thus Pakistan has six more months to be de-list from the grey list, according to reports.

It is pertinent to mention that in July, the FATF had included Pakistan in its ‘grey list’ upon failure to stop financial aid to terrorists.

THURSDAY’S MEETING:

A nine-member team of the Asia-Pacific Group (APG) on Thursday recommended various actions to help Pakistan get delisted from Financial Action Task Force’s (FATF) grey list of countries from September 2018.

The APG delegation which is on an 11-day visit to Pakistan has proposed measures in its report after on-site evaluation of existing legal and institutional framework to control terror-financing and money laundering in Pakistan, a local media house reported.

In the report presented to the Pakistani government on Friday, it was deliberated upon all leading government departments and agencies, mainly the Financial Monitoring Unit (FMU), Federal Board of Revenue (FBR), Federal Investigation Agency (FIA) and Anti-Narcotics force, to answer queries raised in the exit report.

The ‘exit report’ from the APG includes 40 suggestions which have been separated into 11 outcomes performance benchmarks.

The report further stated that Pakistan is in conformity with over 50% of the recommendations. But it wasn’t clear whether it would be enough for Pakistan to come out of the greylist.

In the present meetings held during the APG delegations visit, officials from the assessment team and agency officials exhaustively deliberated with Pakistani officials regarding Islamabad’s compliance with international AML/CFT measures, draft of the technical compliance annexure forward on October 5th, Pakistan’s answers to these measures and commitment on how it intends to meet the core issue of the immediate outcomes.

Moreover, the report said it had been underlined in the previous meetings that Pakistan was mostly in conformity in regard to legislation of various laws for AML/CFT, but most issues were linked to its enactment.

The report also added the laws were in existence but there were problems related to structural arrangements for the effective enactment of these laws.

‘FATF ACKNOWLEDGED PAKISTAN’S STEPS’:

On Thursday, Finance Minister Asad Umer said that the FATF had acknowledged Pakistan’s steps to curb money laundering.

The finance minister said that Pakistan was determined to adopt modern ways to stop money laundering and terror financing.

Umar went on to say that the Pakistani government will continue to cooperate with the body and take steps in accordance with the directions given by the FATF.

In August, the APG as part of the pre-site mutual evaluation identified a series of deficiencies in Pakistan s anti-money laundering or counter-terror financing (AML/CFT) laws and mechanisms. The report was sent to Pakistan with recommendations.

In response, Pakistan has provided details of measures taken in compliance with the recommendations. On October 5, Pakistan received another technical compliance annexure from the APG which further highlighted deficiencies in the AML/CFT measures that Islamabad needs to take.

Pakistan has been scrambling in recent months to avoid being added to a list of countries deemed non-compliant with anti-money laundering and terrorist financing regulations by the Paris-based FATF, a measure that officials here fear could further hurt its economy.