FATF statement says Pakistan does not demonstrate a proper understanding of the Terror Financing risks posed by Da'esh, Al Qaeda, Jamaatud Dawa, Falah-i-Insaniyat Foundation, Lashkar-e-Tayyaba, Jaish-e-Muhammad, the Haqqani Network, and persons affiliated with the Taliban.
The Paris-based Financial Action Task Force (FATF) — which had placed Pakistan on a money laundering “grey list” last year, but given the country time to act to avoid being blacklisted — on Friday acknowledged Pakistan's progress with regards to eliminating money laundering and terrorism financing. Pakistan was urged to move quickly to meet a May 2019 deadline if it wishes to be removed from the grey list.
"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 statement said.
However, the FATF statement maintained that some work remains to be done and was critical of Pakistan in this regard.
"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-i-Insaniyat Foundation, Lashkar-e-Tayyaba, Jaish-e-Muhammad, the Haqqani Network, and persons affiliated with the Taliban," it said.
Here’s what the FATF wants Pakistan to do if it wants to be grey-listed:
"Pakistan should 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," concluded the statement.
Pakistani officials seem to suggest that the task force is appreciative of the progress made by the country in January, but the last sentence of the statement tells otherwise.