Pakistan Stays on 'Grey List' of Global Terror Financing Watchdog FATF

Pakistan has been on the grey list for deficiencies in its counter-terror financing since June 2018.

Pakistan Prime Minister Imran Khan.

(Photo: PTI / Altered by The Quint)

Pakistan continued to remain on the "grey list" of the the global terror financing watchdog, Financial Action Task Force (FATF), for not being able to meet two out of 34 target action points under the additional criteria, according the a report released by the organisation on Friday, 5 March.

FATF, a Paris-based global money laundering and terrorist financing watchdog, however, appreciated Pakistan’s "significant progress" in meeting its commitments.

Pakistan has been on the grey list for deficiencies in its counter-terror financing and anti-money laundering regimes since June 2018.

“Since June 2021, Pakistan has taken swift steps towards improving its AML/CFT regime and completed six of the seven 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,” the FATF report said.

“Pakistan should continue to work to address the one remaining item in its 2021 action plan by demonstrating a positive and sustained trend of pursuing complex [money laundering] investigations and prosecutions,” it added.

Responding to the report, Pakistan's Energy Minister Hammad Azhar, said, "Our fight against ML & TF continues with an unwavering national resolve. We wage war on these activities not just for global compliances but first & foremost for our own sake."

In October 2021, the FATF acknowledged Pakistan's progress on a 27-point action plan on completion of 26 items but retained the country on its "increased monitoring list" to exhibit terror financing investigations against and prosecutions of top cadres of UN-designated terror groups.

At the time, FATF President Marcus Pleyer said Pakistan had to complete two concurrent action plans with a total of 34 items.

"It has now addressed or largely addressed 30 of the items," he said.

The most recent action plan of 2021 on money laundering from FATF's regional affiliate — the Asia Pacific Group (APG) — largely focused on money laundering and had found serious deficiencies.

In this new action plan, four out of the seven items now stood addressed or largely addressed, the report said.

In October last year, FATF encouraged Pakistan to continue to make progress in addressing the one remaining CFT-related item as soon as possible by continuing to demonstrate that terror financing investigations and prosecutions target senior leaders and commanders of UN-designated terrorist groups.

In response to additional deficiencies later identified in Pakistan's 2019 APG Mutual Evaluation Report in June 2021, Pakistan provided further high-level commitment to address these strategic deficiencies pursuant to a new action plan that primarily focuses on combating money laundering.

(With inputs from IANS.)