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FATF Affiliate Unhappy Over ‘Insufficient Physical Action’ Against Banned Outfits

A delegation of the Asia-Pacific Group (APG) on money laundering has expressed reservations over Pakistan’s ‘insufficient physical action’ to counter flow of funds and activities of banned outfits.

The delegation of APG, a body which is an affiliate of the Financial Action Task Force (FATF), is currently in Pakistan on a three-day visit. Dawn reported that the delegation is likely to issue a formal warning to Pakistan before its departure.

A senior official told Dawn that the APG delegation was satisfied with the country’s legislation, regulation, data collection and notifications mostly involving the federal government.

APG appreciated Pakistan for providing abundance of data on issuance of suspected transaction reports (STRs) and blocking funds of banned outfits through banking.

The delegation was also satisfied with Securities & Exchange Commission of Pakistan (SECP) laws and regulations against money laundering and State Bank of Pakistan’s controls.

However, they were not happy with action on provincial and district level, where the delegation said most of the banned outfits operate. APG believes that activities of banned outfits still go unchecked on the provincial and district level.

The delegation demanded that activities of the banned outfits must be strictly monitored and their funds and means of funding must be blocked at all costs. APG also asked authorities to keep a close eye on informal sources of funding e.g. cash couriers and passenger transport.

In February, the Paris-based FATF — which had placed Pakistan on a money laundering ‘grey list’ last year, but given the country time to act to avoid being blacklisted — acknowledged Pakistan’s progress with regards to eliminating money laundering and terrorism financing.

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Pakistan was urged to move quickly to meet a May 2019 deadline if it wishes to be removed from the grey list.

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