Despite vociferous claims made by official circles, Pakistan did not succeed to get out of FATF grey list. The Financial Action Task Force (FATF) gave fourth extension to Pakistan to fully implement a 27-point action plan and “strongly urged” it to meet the remaining three conditions about terror financing investigations and the United Nations Security Council resolutions. President Dr. Marcus Pleyer announced the outcome of the FATF’s four-day virtual plenary meeting by stating that Pakistan remains under increased monitoring adding that while Islamabad had made significant progress there remained some serious deficiencies in mechanisms to plug terrorism financing.
The virtual FATF plenary was held in Paris from 22 to 25 February and considered cases of various countries on the grey list, including Pakistan. The four day meeting reviewed Pakistan’s progress and mentioned that Pakistan must improve their investigations and prosecutions of all groups and entities financing terrorists and their associates and show that penalties by courts are effective. As soon as Pakistan shows it has completed these items, FATF will verify and members of FATF will vote.
Responding to a question by an Indian journalist about prosecution of terrorists in Pakistan, Pleyer clarified that the FATF was not an investigative organisation adding that what we assess is the entire system of anti-money laundering and the framework. He added that this does not change with incidents per se obliquely alluding to recent acquittal of Omar Shaikh by the Supreme Court and its impact on the decision of FATF but it was more than clear that as the agenda relates to a very specifically defined list of items on its Action Plan-none of which is related to Sheikh.
The FATF president noted that Pakistan was working towards its commitment made at a high level to implement the illicit financing watchdog’s recommendations, saying that is not the time to put a country on the blacklist. He added that as soon as Pakistan completed the action, the watchdog will verify the sustainability of the reforms and discuss in next plenary in June.
Meanwhile, a note on the FATF website said Pakistan should continue to work on implementing the three remaining items in its action plan to address its strategically important deficiencies, namely by:
- Demonstrating that TF (terrorism financing) investigations and prosecutions target 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
- Demonstrating effective implementation of targeted financial sanctions against all 1,267 and 1,373 designated terrorists, specifically those acting for or on their behalf.
FATF after October 2020 Plenary has strongly urged Pakistan to continue working on implementing its action plan to address its strategic deficiencies, including by (i) demonstrating that law enforcement agencies are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and those acting on behalf or at the direction of the designated persons or entities; (ii) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions; (iii) demonstrating effective implementation of targeted financial sanctions against all 1,267 and 1,373 designated terrorists and those acting for or on their behalf, preventing the raising and moving of funds including in relation to non-profit organisations (NPOs), identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services; and (iv) demonstrating enforcement against TFS violations, including in relation to non-profit organisation NPOs, of administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases.
Pakistan had already complied with the six recommendations and also submitted details to the FATF secretariat. Pakistan had submitted a detailed response in October 2020 to FATF. Even then, it demanded more from Islamabad. Some analysts have expressed views that some European countries, especially the host France, had recommended to FATF to continue to keep Pakistan on the grey list and had taken the position that not all points had been fully implemented by Islamabad. Other European countries are also supporting France. France apparently, is not happy with the recent response of Islamabad on the cartoon issue. Pakistan has not even posted a regular ambassador in Paris indicating that diplomatic and economic relations between the two countries were not up to the mark.
Pakistan was focusing on the implementation of all recently enacted laws to come out of the grey list of FATF. In the last plenary, two action plans given to Pakistan by the watchdog were the most challenging and comprehensive ever given to any country. In 2020, the government had got three laws — the Anti-Money Laundering (second amendment) Bill-2020, Anti-Terrorism Act (ATA) (third amendment) Bill-2020 and Islamabad Capital Territory Waqf Properties Bill-2020 — passed in a joint sitting of parliament to fulfill the legal requirements of FATF. TW