Financial Action Task Force
On October 21, Pakistan is anticipated to finally leave the Financial Action Task Force’s (FATF) infamous “enhanced surveillance list,” often known as the “grey list,” after spending over 52 months on.
The Paris-based global watchdog on black money announced that the inaugural FATF Plenary will take place on October 20-21, 2022, during T. Raja Kumar’s two-year Singapore Presidency. Participants in the Working Group and Plenary sessions in Paris will represent the 206 Global Network members and observer organisations, such as the International Monetary Fund, the United Nations, the World Bank, Interpol, and the Egmont Group of Financial Intelligence Units.
Decisions made by the plenary would be made public after the two days of deliberations.
Global Financial System
In addition to other important issues, the plenary will focus on jurisdictions that have been identified as posing a risk to the global financial system. This includes guidance on improving beneficial ownership transparency to stop the use of shell companies and other opaque structures for the purpose of laundering illicit funds, as well as an update to public statements that identify jurisdictions as high risk or being subject to increased monitoring.
Due to shortcomings in its legal, financial, regulatory, investigations, prosecution, judicial, and non-government sectors to combat money laundering and combat terror financing, Pakistan was added to the list of jurisdictions subject to increased monitoring in June 2018 and was deemed a serious threat to the global financial system.
Pakistan’s Journey Under FATF
Under a 27-point action plan, Islamabad made high-level political pledges to resolve these shortcomings. However, later on, 34 action points were added. Since then, the nation has actively collaborated with FATF and its affiliates to strengthen its legal and financial systems against money laundering and the financing of terrorism in order to comply with 40 FATF recommendations and meet international standards.
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FATF and Asia Pacific Group
From August 29 to September 2, a joint delegation of 15 people from the FATF and Asia Pacific Group, the regional affiliate of the FATF with a base in Sydney, visited Pakistan to check on the status of the nation’s adherence to the FATF’s 34-point action plan.
The authorities who had kept the delegation’s visit to the country under wraps later referred to it as “a smooth and successful tour.” Following the authorization of an on-site visit by the FATF Plenary in June 2022, the delegation undertook in-depth discussions with pertinent agencies. The objective of the visit, according to the Foreign Office, was to confirm in person Pakistan’s high-level commitment to and sustainability of reforms in the AML/CFT regime. The Foreign Office also stated that it looked forward to the evaluation process’ logical conclusion. The FATF International Cooperation Review Group and plenary meetings will consider the report of the on-site team.
Pakistan said that after four years of persistent and arduous work, it had not only achieved a high level of technical conformity with FATF standards but also assured high levels of efficacy by putting into practise two extensive FATF action plans.
Pakistan was determined to be “compliant or mainly compliant” with all 34 items by FATF in June of this year. FATF then opted to send an onsite team to confirm this on the ground before publicly declaring Pakistan’s removal from the grey list, which eventually happened in August and September.