Pakistan not on FATF's terror financing watch-list, public announcements reveal

PARIS: Financial Action Task Force (FATF), a global money-laundering watchdog, did not place Pakistan on terrorist financing watchlist as reported by a section of Indian and international media, a public statement detailing the outcome of the body’s plenary meeting revealed.

As part of its on-going review of compliance with the AML/CFT  (countering money laundering and combating financing for terrorism) standards, the FATF identifies jurisdictions that have strategic AML/CFT deficiencies and according to reports in Indian media, a decision had been made to include Pakistan in the list.

But the list of jurisdictions identified to have strategic AML/CFT deficiencies does not include Pakistan and instead lists Ethiopia, Iraq, Serbia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, Vanuatu and Yemen.

A section of Indian media reported that Pakistan has again been placed on the list three years after a removal acknowledging Pakistan’s efforts to combat money laundering and terror financing.

Earlier in the day, Foreign Office Spokesman Muhammad Faisal told media during the weekly briefing that US and UK jointly submitted a letter to the FATF nominating Pakistan for placement in the “Grey List” with France and Germany subsequently joined this nomination.

“Pakistan has serious concerns over and objections to the introduction of this new nomination procedure which is unprecedented and in clear violation of established rules/practices of FATF. Most of the concerns raised by the US side regarding deficiencies in our CFT/AML regime had already been addressed in 2015 when Pakistan got an exit from the grey list,” Dr Faisal told media.

He added that in 2009 FATF identified “strategic deficiencies” in Pakistan’s AML/CFT regime and to overcome these deficiencies, Pakistan agreed to implement FAFT’s Action Plan.

“As a consequence, the State Bank of Pakistan introduced a comprehensive set of new rules and guidelines on CFT/AML. Stand alone legislation on Money Laundering was also enacted by the Parliament to deal with AML issues. Moreover, an operationally independent and administrative Financial Monitoring Unit (FMU) was established under the AML law with the sole mandate of receiving, analyzing and disseminating Suspicious Transaction Reports (STRs) and Currency Transaction Reports (CTRs),” Dr Faisal added.

In June 2015, after strenuous efforts and the implementation of this action plan, Pakistan was de-listed from FATF’s grey list.

What is FATF?

The Financial Action Task Force (FATF) is an inter-governmental body established in 1989. The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

The FATF’s decision making body, the FATF Plenary, meets three times per year.