FATF retains Pakistan on ‘grey list,’ recognizes Islamabad’s ‘swift steps’ against money laundering

Financial Action Task Force plenary session in progress on Feb. 19, 2020 in Paris. (Photo courtesy: FATF/File)

• Global watchdog says Pakistan has to address only two remaining items from two action plans 
• Calls on Islamabad to target militant commanders designated as ‘terrorists’ by United Nations 

ISLAMABAD: The Financial Action Task Force (FATF), a global anti-money laundering watchdog, announced on Friday it was retaining Pakistan on its “grey list,” but recognized the “swift steps” taken by Islamabad to improve its anti-money laundering (AML) and combating the financing of terrorism (CFT) regimes.
Pakistan was placed on the FATF grey list of countries in 2018 for inadequate terror funding and money laundering controls. In June last year, FATF President Marcus Pleyer said Islamabad had made “significant progress” but there remained “serious deficiencies” in mechanisms to plug money laundering and terrorism financing.
The country was also handed another seven-point action plan to be implemented along with the original 27 points to exit the grey list. Countries placed on the list actively work with the FATF to address strategic deficiencies in their systems to counter money laundering, terrorist financing and proliferation financing.
The FATF released a statement late Friday at the end of its hybrid plenary meeting on March 1-4, recognizing Pakistan had fulfilled six of the seven action plan items highlighted by the watchdog’s Asia Pacific Group (APG) in 2021.
“Since June 2021, Pakistan has taken swift steps toward improving its AML/CFT regime and completed 6 of the 7 action items ahead of any relevant deadlines expiring, including by demonstrating that it is enhancing the impact of sanctions by nominating individuals and entities for UN designation and restraining and confiscating proceeds of crime in line with Pakistan’s risk profile,” it said in the statement.
The Paris-based watchdog urged Islamabad to complete the one remaining action item in its 2021 action plan “by demonstrating a positive and sustained trend of pursuing complex money laundering investigations and prosecutions.”
It called the South Asian country to target senior leaders and commanders of militant groups designated as “terrorists” by the United Nations (UN) in its terror financing investigations and prosecutions.
The FATF also recognized that Pakistan’s continued political commitment had led to a “significant progress” across a comprehensive counter-terrorism financing action plan and the country had fulfilled 26 of the 27 items of its 2018 action plan.
In response, the Pakistani finance ministry said Islamabad was striving hard to fulfill the two remaining action items.
“Pakistan is making endeavors to complete the last two remaining items of both the action plans, as early as possible,” it said in a statement.
“The Government of Pakistan reiterates its commitment to take all necessary measures to ensure completion of remaining two action plan items during the upcoming FATF plenary cycle, to become eligible for exiting from FATF’s Grey list.”