Pakistan Fails FATF Test, to Stay On Terror Watchdog’s Grey List

Pakistan Prime Minister Imran Khan
Pakistan Prime Minister Imran Khan (Representative Image/ TIH)

NEW DELHI: While acknowledging “substantial” progress made by Islamabad in addressing strategic deficiencies in its AML/CFT (anti-money laundering/combating the financing of terrorism) regime, global terror watchdog FATF on Friday retained Pakistan on its grey or Increased Monitoring List.

There was no reprieve for Pakistan even as the Paris-based body admitted Islamabad had now largely addressed 26 of the 27 items in its 2018 action plan to combat terror financing. The one remaining unaddressed item, because of which Pakistan couldn’t exit the grey list, relates to the need to demonstrate that terror-financing investigations and prosecutions target senior leaders and commanders of UN-designated terrorist groups. FATF president Marcus Pleyer described it as a key issue that Pakistan needed to address.

As NSA Ajit Doval said at an SCO meeting this week, India has repeatedly emphasised the need for full implementation of UN resolutions and targeted sanctions against UN-designated terrorist individuals and entities. Significantly, Doval had also proposed an MoU between FATF and SCO for countering terror financing.

Pleyer said after the plenary meeting there was also a high-level commitment made by Pakistan this month to address strategic deficiencies, as identified by FATF’s regional partner Asia Pacific Group on Money Laundering in 2019, in keeping with a new action plan that focused on combating laundering.

While acknowledging Pakistan’s “political commitment” that led to what FATF described as significant progress across a comprehensive CFT action plan, Pleyer said Pakistan’s delisting will take place only after it complies with all the agenda items in both the action plans. He said an on-site evaluation will take place for both FATF and APG action plan.

FATF called upon Pakistan to address its strategically important AML/CFT deficiencies as identified by the APG mutual evaluation report. These include the need to demonstrate that assistance is being sought from foreign countries in implementing counter-terror UNSCR 1373 designations and also to demonstrate an increase in money laundering investigations and prosecutions and that “proceeds of crime continue to be restrained and confiscated in line with Pakistan’s risk profile, including working with foreign counterparts to trace, freeze, and confiscate assets”.