Islamabad: Pakistan faces high risks of money-laundering and terror- financing and has complied with just one the 40 recommendations set by the Financial Action Task Force (FATF) at the time of the country’s inclusion in its grey list, according to a report by the Asia Pacific Group (APG).
The APG released its much-awaited 228-page ‘Mutual Evaluation Report’ Saturday, days ahead of the key FATF plenary meeting which will give its decision on Pakistan’s ‘grey list’ status.
Pakistan was placed on the list by the Paris-based anti-money laundering watchdog in June last year and was given a plan of action to complete it by October 2019, or face the risk of being placed on the black list with Iran and North Korea.
The cut-off date for Pakistan to show improvement to APG was October 2018 and the Pakistani authorities insisted that they made a lot of progress during the past year.
According to the report, out of FATF’s 40 recommendations on curbing money laundering and combating the financing of terrorism, Pakistan was fully compliant only on one. It was largely compliant on nine, partially compliant on 26 and non-compliant on four recommendations, ‘The Express Tribune’ reported.
Pakistan faces high risks of money-laundering and terror-financing and it needs to improve the understanding of these risks that are also animating from various terrorist groups operating in the country, the report said.
“After the APG report, chances are high that Pakistan would be retained on the grey list during the FATF plenary meetings from October 13 to 18 in Paris,” according to the APG report.
On the level of effectiveness of Pakistan’s Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT), the country was found moderately effective only on one benchmark while on the remaining nine its effectiveness was declared as low as of October 2018 cut-off date, the report said.
“Due to these adverse findings, the APG has already decided to place Pakistan on its Expedited Enhanced Follow up reporting list,” the APG said.
The report highlighted that Pakistan’s regulators – the State Bank of Pakistan and Securities and Exchange Commission of Pakistan – have very limited understating of the money-laundering and terror-financing regimes.
“The terror financing cases are identified by a number of mechanisms but not via financial intelligence,” the report said.
Meanwhile in a separate development Pakistan objected Monday to the recent remarks by Defence Minister Rajnath Singh that FATF can any time blacklist the neighbouring country. It described it as India’s attempts to ‘politicise’ the international money-laundering watchdog’s proceedings. Pakistan was placed on the grey list by FATF in June last year.
Rajnath Singh during the Defence Accounts Department Day event last week said that the FATF can anytime blacklist Pakistan for terror- financing.
The Pakistan foreign office (FO) in a statement said Rajnath Singh’s remarks ‘reinforces Pakistan’s concerns, repeatedly highlighted to the FATF membership, about India’s attempts to politicise the FATF proceedings to further its narrow, partisan objectives’,
“Our concerns in this regard have been previously brought to the attention of FATF members,” the foreign office said in the statement.
Agencies