Pakistan Remains on FATF’s Grey List: Two Action Plans Need to Be Completed Before its Status Is Reassessed

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Washington, DC: The global terrorist hub of Pakistan continues to remain on the Financial Action Task Force’s (FATF) grey list with one item yet to be addressed on the original action plan from June 2018. Pakistan also has to address an additional six items on an action plan assigned by FATF’s regional partner, the Asia Pacific Group (APG). Although Islamabad avoided getting blacklisted, it cannot be delisted unless both action plans are completed.

FATF President Dr. Marcus Pleyer, in a virtual press conference on June 25, noted that Pakistan had yet to address an item on the original action plan on financial terrorism relating to the “investigations and prosecutions of senior leaders and commanders of UN-designated terror groups”.

In its 2019 Mutual Evaluation Report (MER) on Pakistan, APG had identified additional deficiencies related to money laundering. This action plan requires Pakistan to continue to work to address its strategically important AML/CFT deficiencies, by:
(1) enhancing international cooperation by amending the MLA law;
(2) demonstrating that assistance is being sought from foreign countries in implementing UNSCR 1373 designations;
(3) demonstrating that supervisors are conducting both on-site and off-site supervision commensurate with specific risks associated with DNFBPs, including applying appropriate sanctions where necessary;
(4) demonstrating that proportionate and dissuasive sanctions are applied consistently to all legal persons and legal arrangements for non-compliance with beneficial ownership requirements;
(5) demonstrating an increase in ML investigations and prosecutions and that proceeds of crime continue to be restrained and confiscated in line with Pakistan’s risk profile, including working with foreign counterparts to trace, freeze, and confiscate assets; and
(6) demonstrating that DNFBPs are being monitored for compliance with proliferation financing requirements and that sanctions are being imposed for non-compliance.

Dr. Pleyer added, “So the delisting will not occur before both action plans are completed and two onsite [assessments] have been granted and successfully completed and have shown that the improvements are sustainable before the FATF members decide on delisting.”

Recent events in Pakistan, however, point to Islamabad’s continued support of terrorism. A three-member bench of Pakistan’s supreme court headed by Justice Mushir Alam, had acquitted Ahmed Omer Saeed Sheikh, who is accused of beheading US journalist Daniel Pearl. Pakistani Prime Minister Imran Khan has referred to Osama bin Laden as a martyr, and Pakistani Foreign Minister Shah Mahmood Qureshi refused to condemn bin Laden.

The next FATF plenary is scheduled for October 2021.

Poonam Sharma
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Poonam Sharma, Managing Editor, India America Today

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