–Pakistan told to address strategic counter-terror financing deficiencies if it wishes to be de-listed from grey list
–FATF asks Pakistan to act against facilities, services owned or controlled by designated terrorists
The Financial Action Task Force (FATF) on Friday issued its appraisal of Pakistan’s progress regarding combating terrorism financing and money laundering, urging that the country should quickly meet the deadline of May 2019, if it wishes to be de-listed from the grey list.
In 2018, the Paris-based FATF had placed Pakistan on a money laundering “grey list” but given it time to take action before a further downgrade.
“Since June 2018, when Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT [anti money laundering/combating financing of terrorism] regime and to address its strategic counter-terrorist financing-related deficiencies, Pakistan has taken steps towards improving its AML/CFT regime, including by operationalising the integrated database for its currency declaration regime,” the FATF acknowledged in the statement.
The statement, however, was critical with respect to the work that remains to be done.
“Pakistan has revised its TF [terrorism financing] risk assessment; however, it does not demonstrate a proper understanding of the TF risks posed by Da’esh, Al Qaeda, Jamaatud Dawa, Falah-e-Insaniyat Foundation, Lashkar-e-Tayyaba, Jaish-e-Muhammad, the Haqqani Network, and persons affiliated with the Taliban,” it said.
In order to qualify for a de-listing, the FATF has suggested Pakistan to “continue to work on implementing its action plan to address its strategic deficiencies, including by:
- Adequately demonstrating its proper understanding of the TF risks posed by the terrorist groups above, and conducting supervision on a risk-sensitive basis;
- 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;
- Demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS);
- 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;
- improving inter-agency coordination including between provincial and federal authorities on combating TF risks;
- 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;
- Demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions and enhancing the capacity and support for prosecutors and the judiciary; and
- 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;
- Demonstrating enforcement against TFS violations including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases;
- Demonstrating that facilities and services owned or controlled by designated person are deprived of their resources and the usage of the resources.
“Given the limited progress on action plan items due in January 2019, the FATF urges Pakistan to swiftly complete its action plan, particularly those with timelines of May 2019,” the statement concluded.
The latest FATF plenary and its various group meetings were held from Feb 18 to 22.
A four-member Pakistani delegation in Paris had been witnessing a review of Islamabad’s performance by an expert group of the task force on its compliance with global guidelines against terror financing and money laundering.
The Asia-Pacific Group (APG), an associate firm of the FATF, presented Pakistan’s report and responses to five specific queries it was asked last month to the International Country Risk Guide (ICRG) — Political Risk Services (PRS) group.
Any further demotion from the so-called “grey list”, it is feared, could deter foreign investors and hinder Pakistan’s access to international markets amid a fiscal crisis.
On Thursday, the country’s National Security Committee had maintained a ban on the Jamaatud Dawa and Falah-e-Insaniyat Foundation while authorising accelerated action against extremist groups in the country.