FATF retains Pakistan on grey list until October despite 'significant progress'

Pakistan has tried hard to convince the ongoing Financial Action Task Force meeting that it has implemented 26 of the 27-point FATF action plan to move out of the Grey List.

Pakistan was put on the grey list by the Paris-based Financial Action Task Force (FATF) in June 2018 and the country has been struggling to come out of it.

The second Follow-Up Report (FUR) on the Mutual Evaluation of Pakistan released by the APG also downgraded the country on one criterion.

On February 25, FATF decided to keep Pakistan on its 'grey list', with the country's status set to be reviewed next at an extraordinary plenary session in June 2021.

“Under the German Presidency of Dr Marcus Pleyer, delegates representing 205 members of the Global Network and observer organisations including the International Monetary Fund, the United Nations and the Egmont Group of Financial Intelligence Units took take part in the virtual meeting of the FATF Plenary,” FATF said in a statement.

In a statement issued after the meeting, the FATF said that since June 2018, when 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, "Pakistan’s continued political commitment has led to significant progress across a comprehensive CFT action plan".

"The FATF recognises Pakistan’s progress and efforts to address these CFT action plan items and notes that since February 2021, Pakistan has made progress to complete two of the three remaining action items on demonstrating that effective, proportionate and dissuasive sanctions are imposed for TF (terror financing) convictions and that Pakistan’s targeted financial sanctions regime was being used effectively to targeted terrorist assets," the statement read.

FATF noted that Pakistan has now completed 26 of the 27 action items in its 2018 action plan.

"The FATF encourages Pakistan to continue to make progress to address as soon as possible the one remaining CFT-related item by demonstrating that TF (terror financing) investigations and prosecutions target senior leaders and commanders of UN-designated terrorist groups," said the statement.

According to the anti-money laundering agency, in response to additional deficiencies later identified in Pakistan’s 2019 APG Mutual Evaluation Report (MER), "Pakistan has made progress to address a number of the recommended actions [...] and provided further high-level commitment in June 2021 to address these strategic deficiencies pursuant to a new action plan that primarily focuses on combating money laundering".