The Financial Action Task Force (FATF), a global money laundering and terrorism financing watchdog has removed Pakistan from a list of countries under “increased monitoring”, also known as the “grey list”.
Addressing the press conference at the conclusion of its plenary in the French capital, Paris, FATF President Raja Kumar noted that Pakistan had been on the grey list since 2018.
“It has two concurrent action plans. After a lot of work by Pakistani authorities, they have largely addressed all of the action plan items,” he said.
He stated that the task force had conducted an onsite visit at the end of August. The onsite team verified that there is a high-level of commitment from the Pakistani leadership, sustainability of reforms and commitment to make improvements in the future, he said.
“As a result of these action plans, Pakistan has made significant improvements to strengthen the effectiveness of this framework for combating terrorism financing.”
Kumar said steps had also been taken to strengthen risk-based supervision of financial and non-financial institutions, improve asset confiscation outcomes, and investigate and prosecute money laundering.
“As a result of this, Pakistan has been removed from the increased monitoring list,” he said.
In its handout, the FATF stated that it welcomed Pakistan’s “significant progress” in improving its anti-money laundering and combating financing terror (AML/CFT) regime.
“Pakistan has strengthened the effectiveness of its AML/CFT regime and addressed technical deficiencies to meet the commitments of its action plans regarding strategic deficiencies that the FATF identified in June 2018 and June 2021, the latter of which was completed in advance of the deadlines, encompassing 34 action items in total.
“Pakistan is, therefore, no longer subject to the FATF’s increased monitoring process,” the handout said, adding that the country would continue to work with the Asia-Pacific Group to further improve its AML/CFT system.
Prime Minister Shehbaz Sharif said Pakistan’s exiting the FATF grey list was a “vindication of our determined and sustained efforts over the years”.
He congratulated the civil and military leadership as well as all institutions whose hard work led to today’s success. “Aap sab ko bohat bohat Mubarak,” the premier said, following up with a text smiley.
PM Shehbaz particularly commended the role and efforts of FM Bilawal, Army Chief General Qamar Javed Bajwa, their teams and all political parties for putting up a united front to get Pakistan out of the grey list.
Finance Minister Ishaq Dar said the efforts of the civil-military team, under the leadership of PM Shehbaz, in achieving this goal were “highly commendable”.
Minister of State for Foreign Affairs Hina Rabbani Khar said this “long and arduous journey” had only been made possible through strong political ownership across the political spectrum.
“It shows Pakistan can achieve much when we work together for Pakistan’s interest,” she said.
“There are many people who consistently worked through the four years to achieve success today. A few of them are here in Paris who were part of the final lap, but many others in a wide array of ministries/organisations/institutions are in Pakistan. I particularly want to congratulate them also,” she said.
Pakistan was included among jurisdictions under increased monitoring list in June 2018 for deficiencies in its legal, financial, regulatory, investigations, prosecution, judicial and non-government sector to fight money laundering and combat terror financing considered serious threat to global financial system.
Islamabad made high-level political commitments to address these deficiencies under a 27-point action plan. But later the number of action points was enhanced to 34.
The country had since been vigorously working with FATF and its affiliates to strengthen its legal and financial systems against money laundering and terror financing to meet international standards in line with 40-recommendations of the FATF.
A 15-member joint delegation of the FATF and its Sydney-based regional affiliate — Asia Pacific Group — paid an onsite visit to Pakistan from Aug 29 to Sept 2 to verify the country’s compliance with the 34-point action plan committed with the FATF.
The authorities that had kept the countrywide visit of the delegation low profile later termed it “a smooth and successful visit”. The delegation had detailed discussions with relevant agencies pursuant to the authorisation of onsite Visit by FATF Plenary in June 2022.
According to the Foreign Office, the focus of the visit was to validate on ground Pakistan’s high-level commitment and sustainability of reforms in AML/CFT regime and [it] looked forward to logical conclusion to the evaluation process. The report of FATF Onsite team will be discussed in FATF’s International Cooperation Review Group and plenary meetings.