FATF ‘largely satisfied’ with Pakistan’s efforts to curb money laundering, terror financing | Pakistan Today

FATF ‘largely satisfied’ with Pakistan’s efforts to curb money laundering, terror financing

ISLAMABAD: The Financial Action Task Force (FATF) on Thursday appreciated the steps taken by Pakistan on its action-plan to curb money laundering and terror financing, setting February to review the implementation status.

An eight-member high-level Pakistani delegation led by Finance Secretary Arif Ahmed Khan concluded a three-day conference of the FATF in Sydney, Australia on Thursday.

The delegation comprised representatives of the State Bank of Pakistan (SBP), National Counter Terrorism Authority (NACTA), Federal Investigation Agency (FIA), Federal Board of Revenue (FBR) and Financial Monitoring Unit.

An official, who was a part of Pakistan’s team in Sydney, told Pakistan Today that the FATF delegation termed the meeting as a “meaningful engagement” and welcomed the steps taken by Pakistan to choke the illegal channels being allegedly used by individuals. The official said that State Minister for Interior Shehryar Khan Afridi was in touch with the delegation holding talks with the FATF team in Sydney and he overlooked the ongoing talks.

“The minister also briefed the federal cabinet over the Sydney talks,” the official added.

“Although the FATF delegation was largely satisfied with Pakistan’s performance in most of the areas, however, the meeting also identified some areas where Pakistan needs to take more actions against law violators. It was also decided to have another review meeting in February to reevaluate the implementation status,” the official said.

“In today’s meeting, National Risk Management (NRA) – a document prepared by NACTA – was discussed. Moreover, Pakistan’s implementation of the action plan was also evaluated. We have three more weeks to submit its final progress report to the FATF before we go for a vote by member-states due in May/June this year,” the official added.

The official also said that the FATF team was satisfied with Pakistan’s overall efforts and action plan to combat money laundering and choke down terror-financing under international obligations and indicated certain areas to do more before May this year to get out of the grey list.

The official said that FATF reviewed most of the 10-point action plan envisaging 27 benchmarks.

The official said that FATF would hold the next review meeting in Paris in February to be followed by a broader examination of the full compliance with international commitments at another meeting in May – possibly in Sri Lanka or Sydney. The May vote meeting would determine whether or not Pakistan is on the course to exit from the grey list by September.

The official said that FATF had gone through the report dispatched by Pakistan last week before the review meetings with the Pakistani delegation involving questions and answers on the performance so far and the way forward. The official said that the FATF team appeared convinced over the steps and measures which were taken by the authorities to combat terror financing and money laundering in line with the United Nations (UN) resolutions.

The Pakistani delegation explained the implementation status of the plans for various government agencies. The report identified Pak-Afghan and Pak-Iran borders as key routes for terror-financing and money laundering and stated that 4,643 suspected transactions relating to terror financing and money laundering have been identified and blocked since 2015, including 3,677 suspected transaction reports and 966 financial intelligence reports. A total of 1,167 transactions have been captured during 2018 alone, including 975 suspected transaction reports and 210 financial intelligence reports.

To address the challenge at the two borders, the report stated, checking and security systems at Pak-Afghan border have been strengthened with improved technology and vigilance while security has also been beefed up at Pak-Iran border.

The report stated that the long coastal belt is also a source of smuggling and security is being tightened through law enforcement agencies, including through marine and coast guards. It stated that Afghan transit trade is also a source of such unregistered financial flows. All these channels are also being misused by foreign agencies to support terror-related activities.

The tools being used for financial transactions for terrorism include donations, cash smuggling, natural resources, drugs, non-governmental organisations and foreign agencies, the report stated. The FBR identified about 1,185 illegal transactions since 2015, followed by 1,049 by the SBP and about 1,295 by the FIA.

During the May and September meetings, regulators and law enforcement agencies will be expected to demonstrate results in the form of investigations, prosecutions, convictions, supervisory actions, sanctions with resulting impacts on compliance by financial institutions, implementation of cross-border currency and border controls and enforcement of regulatory regime at the borders.

NACTA will be expected to enhance coordination with law enforcement agencies and the Counter Terrorism Department coupled with effective implementation of sanctions under the United Nations Security Council (UNSC) resolutions.

It merits mention here that in June 2018, Pakistan made a high-level political commitment to work with the FATF and APG (Asia Pacific Group on money laundering) to strengthen its anti-money laundering /counter-terror financing regime and to address its strategic counter-terrorism financing-related deficiencies by implementing a 10-point action plan to accomplish these objectives.

The successful implementation of the action plan and its physical verification by the APG will lead the FATF to clear Pakistan out of its grey list or else move into the black list by September.

In August 2018, the APG, as part of the pre-site mutual evaluation, identified a series of deficiencies in Pakistan’s anti-money laundering/counter-terror financing laws and mechanisms.

The authorities are required to upgrade agencies and their human resources to enable them to handle foreign requests to block terror financing and freeze illegal and targeted assets. By the end of September, Pakistan has to comply with the action plan it has committed with the FATF in June to get out of the grey list or else fall into the black list.

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