Tuesday, July 5, 2022

Pakistan completes FATF action plan: A ride back in time

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Pakistan has completed the 34-point Financial Action Task Force (FATF) action plan, and the process of exiting the grey list has already started.

The removal from the grey list will be subject to an on-site visit to ensure the sustainable implementation of the reforms. It is a big day for the country, and the quest to secure the credit for the big achievement continued throughout the day.

Pakistan Tehreek-e-Insaf (PTI) is complementing itself for the triumph.

Imran Khan, political personalities, PTI

On the other hand, the incumbent coalition government considered it their golden star as, according to them, the world has regained confidence in the country under their leadership. So let’s take a ride back in time and see how it was actualized and are the people rightly thanking Imran Khan for this endeavor.

  • It all started when Pakistan was placed on the FATF grey list for the third time because it failed to meet the standards of Combating International Financing of Terrorism (CFT). Initially, Saudi Arabia, Turkey, and Chine opposed the US-Led initiative. Later US convinced KSA to give up the support, and on 28th February 2008, Pakistan was moved to the grey list.
  • On 16th August 2018, The Asia Pacific Group (APG) had a 12-day inspection and identified discrepancies in Pakistan’s FATF action plans. Pakistan largely addressed five of 27 action items, and other points were addressed on different levels.
  • On 8th March 2019, The government started examining and monitoring profiles and activities of Banned outfits in all layers of investigative, legal, financial, and administrative regimes to adhere to the Financial Action Task Force (FATF) requirement.
  • On 11th May 2019, Pakistan introduced a policy to limit terror financing. The procedures were changed, which led to better enforcement and limited currency smuggling. The Custom department was now working with cash carriers and developing profiles of currency traffickers.
  • On 25th July 2019, A department was established in the Federal Board of Revenue (FBR) to work on terror financing.
  • On 18th October 2019, FATF retains Pakistan in the gray list, identifying Pakistan’s slow-paced progress, and urges the country to proceed with the given targets swiftly by February 2020
  • 29th October 2019, a department was established in the interior ministry to implement the action plan.
  • On 21st February 2020, Pakistan was retained on the gray list. Pakistan’s commitment was acknowledged towards implementation, and FATF welcomed the high-level political commitment. At the same time, Pakistan was urged to complete the Action Plan by June 2020.
  • On 24th February 2020, the FBR established a department that monitored real estate and jewelry trades for FATF compliance.
  • On 17th August 2020, the Senate takes one of the five FATF-related bills.
  • On 18th August 2020, the Senate passed two more FATF-related bills.
  • On 16th September 2020, the Senate passed three more FATF-related bills.
  • On 6th October 2020, the Securities and Exchange Commission of Pakistan (SECP) fulfilled all FATF conditions.
  • On 23rd, 2020, Pakistan completed 21 out of 27 points of the action plan but remained on the grey list till the plan was implemented completely.
  • On 19th November 2020, Jamaatud Dawa (JuD) chief Hafiz Saeed was sentenced to 5 and a half years in prison in a terror-financing case.
  • On 8th January 2021, the State Bank of Pakistan amends AML regulations.
  • On the same day, 8th January 2021 Lahore anti-terrorism court sentenced Lashkar-e-Taiba’s (LeT) Zakiur Rehman Lakhvi to 5 years imprisonment for terror financing.
  • On 25th February 2021, Pakistan is kept on the grey list. Three out of 27 points were not met regarding combating financing terror and anti-money laundering.
  • On 25th March 2021, the government starts registering all tax returns-filing real estate dealers as Designated Non-Financial Businesses and Professions (DNFBPs).
  • On 22nd April 2021, Regulators are strengthened to monitor and control money laundering.
  • On 19th May 202, the Federal Investigation Agency (FIA) established a separate department to monitor and control money laundering.
  • 25th June 2021, Pakistan remains in the grey.
  • 4th July 2021, the National Accountability Bureau (NAB) establishes a department to counter money laundering and terror financing.
  • On 16th August 2021, the banks started using politically exposed persons’ databases.
  • 21st October 2021, Pakistan remains on the watch list as the action plan was not fully implemented. After completing 26 out 27 points and additional Pakistan was given additonal seven-point action plan to counter money laundering.
  • 4th March 2022, Pakistan remains on the grey list. Emphasis was made to take action to implement the plan swiftly and address the deficiencies fully. By this time, Pakistan compeleted implemented 32 of the 34 items in the two action plans.
  • On 7th April 2022, the detailed report of the last two remining points was submitted.
  • On 8th April 2022, Hafiz Saeed was sentenced to 33 years in jail.
  • On 17th June 2022, Pakistan completed the 34 points action plan. Removing from the grey list was subject to an on-site visit in October 2022, ensuring sustainable reform implementation.

FATF plenary session was under progress in Berline from June 14-17, 2022. In the press conference, FATF president Marcus Pleyer complimented Pakistan’s efforts to complete the two action plans ahead of time. It was tough to ride for the Imran Khan government, but they never stopped trying and pushing themselves to attain the given targets.

This is when Pakistan found itself in the center of the evolving geopolitical and economic situation, which mounted pressure on the country. Pakistan has successfully sustained Covid, but international oil price hikes and inflation have strained the country’s economy. Even with severe arm twisting, Pakistan had found its way out.

When he was in power, Imran Khan’s dedication and commitment were phenomenal and must be appreciated. Indeed it’s a time to thank ex-prime minister Imran Khan, a leader who never gives up on Pakistan and its people.

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