Unsatisfactory terrorist financing and money laundering controls lands Pakistan to the UK government’s list of undesirable 21 high-risk countries.
This list, released by the UK Government, clones the list of countries termed by the Financial Action Task Force (FATF) as “high-risk or under increased monitoring”.
Pakistan is on the list at number 15 and share it with conflict-ridden countries such as Uganda, Syria, Yemen and Zimbabwe.
The full list of includes: Senegal, Syria, Uganda, Barbados, Botswana, Burkina Faso, Albania, Morocco, Myanmar, Nicaragua, Pakistan, Cambodia, Democratic People’s Republic of Korea, Ghana, Iran, Jamaica, Cayman Islands, Mauritius, Yemen, Panama, and Zimbabwe.
According to details released by the UK government, the nations in this category are a threat because of weak or no tax controls and lack of checks and balances on money-laundering and terror-financing.
In December 2020, a UK government report revealed that laundered money flows unstopped from Pakistan into the UK and vice versa.
The UK government’s list has come into effect from March 26, 2021 after a new definition of a high-risk third country has been identified in a new Schedule 3ZA.
The “Money Laundering and Terrorist Financing (High-Risk Countries) Regulations 2021” list is part of post-Brexit developments.
Until Brexit transition period, the list was determined by the European Union (EU) under its 4th Anti-Money Laundering Directive. Now, the UK Government has its own standalone list and this time, Pakistan’s featuring in it.
The new UK Government legislation says that a “high-risk third country” is a country which is specified in Schedule 3ZA”. It further states that “any country which is identified by the European Commission as a high-risk third country in acts adopted under fourth money laundering directive’s Article 9.2” is “a high-risk third country”.
The list of high-risk third countries is issued for enhanced customer due diligence requirements.