New Delhi, Oct 13 : In June, the Financial Action Task Force (FATF) had slammed Pakistan for failing to do enough to check terror financing and warned of action if it did not comply with the requirements by October.
The FATF, which was created by Group of 7 industrialised nations (G-7) in 1989 and is tasked to develop policies to combat money laundering and terror financing, had said Pakistan failed to complete an action plan with regard to these issues by the deadlines of January and May this year.
“The FATF strongly urges Pakistan to swiftly complete its action plan by October 2019 when the last set of action plan items are set to expire. Otherwise, the FATF will decide the next step at that time for insufficient progress,” the global body had warned.
Pakistan is already in the ‘Grey List’ of the FATF, which means under watch, and runs the risk of being placed in ‘Black List’, after which it cannot get aid or loan from international financial institutions like IMF and World Bank.
Its case will be reviewed at the meeting of FATF to be held in Paris from Sunday till October 18.
After its meeting in June, the FATF had said Pakistan should show “effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1267 and 1373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services.”
The 1267 refers to the UN Sanctions Committee, which has listed Pakistan-based Jaish-e-Mohammad chief Masood Azhar and Lashkar-e-Taiba (LeT) chief Hafiz Saeed as global terrorists and proscribed their outfits.
The FATF had said Pakistan also must demonstrate that “facilities and services owned or controlled by designated person are deprived of their resources and the usage of the resources.”
The global watchdog had said Pakistan, since June last year, made “a high-level political commitment to work with the FATF and APG (Asia-Pacific Group on Money Laundering) to strengthen its AML/CFT (Anti-Money Laundering and Terrorist Financing) regime and to address its strategic counter-terrorist financing-related deficiencies.”
It said, “Pakistan has taken steps towards improving its AML/CFT regime, including the recent development of its TF (Terrorist Financing) risk assessment addendum; however, it does not demonstrate a proper understanding of Pakistan’s transnational TF risk.”
A statement issued by FATF on June 22, after its three-day deliberations, said, “The FATF expresses concern that not only did Pakistan fail to complete its action plan items with January deadlines, it also failed to complete its action plan items due May 2019.
Outlining a series of steps that Pakistan needs to take, the FATF said it should continue to work on implementing its action plan to address its “strategic deficiencies”, including by “adequately demonstrating its proper understanding of the TF risks posed by the terrorist groups , and conducting supervision on a risk-sensitive basis”.
It also asked Pakistan to demonstrate that “remedial actions and sanctions are applied in cases of AML/CFT violations, and that these actions have an effect on AML/CFT compliance by financial institutions.”
Pakistan also needs to demonstrate that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS).
The FATF also asked Pakistan to demonstrate that “law enforcement agencies (LEAs) are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and persons and entities acting on behalf or at the direction of the designated persons or entities.”
Pakistan must demonstrate that TF prosecutions result in “effective, proportionate and dissuasive sanctions and enhancing the capacity and support for prosecutors and the judiciary,” the FATF said.