ISLAMABAD: The Asia Pacific Group (AGP) of the Financial Action Task Force (FATF) upgraded Pakistan’s compliance ratings, which is a sign that the country is on way to an exit from the gray list.
The AGP has upgraded Pakistan’s compliance with the following recommendations.
- Recommendation 28 (Regulation and supervision of Designated Non-Financial Businesses and Professions or DNFBPs) upgraded from Partially Compliant to Largely Compliant
- Recommendation 33 (Statistics) upgraded from Partially Compliant to Compliant
- Recommendation 37 (Mutual Legal Assistance) upgraded from Non-Compliant to Largely Compliant
- Recommendation 38 (Mutual Legal Assistance- Freezing and Confiscation) upgraded from Non-Compliant to Partially Compliant
Pakistan is now compliant or largely compliant on 38 out of 40 FATF recommendations — sufficient compliance level to get Pakistan off of the gray list.
Earlier in 2022, FATF had acknowledged Pakistan’s efforts to discourage money laundering and terror financing. FATF said that Pakistan has completed 34 action items it was assigned.
However, a final decision on taking Pakistan off of the gray list remained contingent upon the onsite visit and verification of Pakistan’s compliance and the decision will be announced in October.
However, the country has taken another step in that direction by getting AGP approval on technical compliance. Pakistan had submitted its 4th Follow-up Report in February 2022 requesting upgrades in four recommendations
“The submissions were made in the light of amendments made to the Mutual Legal Assistance Act, establishments of comprehensive data collection and management systems and supervisory activities undertaken by the regulatory authorities for designated law enforcement authorities i.e. FBR-DNFBP, ICAP, ICMAP and Ministry of Law and Justice (MoLJ),” the financial monitoring unit of the government of Pakistan said.
Before the FATF met in June this year, the follow-up report was reviewed by experts from China, Hong Kong, and APG Secretariat
The report was also discussed at the APG’s Mutual Executive Committee meeting held in June 2022 and in July 2022 it was adopted with the upgrades in the rating of all four recommendations.
The country is fully compliant on 9 recommendations or action items, largely compliant on 29 items, and partially compliant on two items. It no longer faces the blemish of being non-compliant on any of the items.
While upgrading Pakistan’s compliance ratings in its July 2022 report, the APG concluded that “overall, Pakistan has made good progress in addressing the technical compliance deficiencies identified in its MER and has been re-rated on Compliant with R.33, Largely Compliant with R.28 and R.37 and Partially Compliant with R.38.”
“Pakistan has 38 Recommendations rated C/LC. Pakistan will remain in enhanced follow-up. Pakistan’s next progress report is due 1 February 2023,” it said.
