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FATF confirms compliance with Pakistan’s most recommended

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Financial Action Task Force (FATF)

On 2 June 2021, the Asia Pacific Group (APG) on Money Laundering issued the results of Pakistan’s second Mutual Evaluation follow-up Report.

According to the study, Pakistan has a compliant/largely compliant grade in 31 of 40 FATF Recommendations in Technical Compliance. These findings demonstrate the government’s sincerity as well as its determination to meet FATF guidelines.

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These outcomes also demonstrate the irreversibility and sustainability of the whole process of bringing Pakistan up to global AML/CFT norms. These outcomes are the consequence of a whole-government approach to achieving the same goal. According to a statement made by the Ministry of Finance, an upgrading of 21 Recommendations in such a short period of time is unique in FATF history.

“This is the parallel inspection being performed at FATF in addition to our present action plan,” stated Hammad Azhar, Minister of Energy, on his Twitter page on Friday.

“This accomplishment is the product of important legal reforms (14 federal + 3 provincial legislation with matching regulations),” he said, adding that it is also the product of the FATF team’s consistent work (20 ministries plus organizations).

The FATF Mutual Evaluation Report (MER) of jurisdictions is graded in two areas: technical compliance/legal instruments (40 FATF Recommendations) and demonstration of effectiveness (11 Immediate Outcomes). Pakistan’s MER was implemented in October 2019, and Pakistan was deemed compliant and generally compliant in 10 of 40 FATF Technical Compliance Recommendations.

Following the approval of MER, Pakistan was put under FATF’s Post-Observation Period, which terminated in February 2021. During the specified time, Pakistan implemented important legal reforms, including the introduction of 14 Federal Laws and three Provincial Laws, as well as pertinent norms and regulations. The legislation not only reinforced Pakistan’s systems, but also ensured their long-term viability. On October 1st, 2020, Pakistan filed their report to FATF on Technical Compliance.

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Pakistan has made significant progress in addressing the Technical Compliance issues noted in its MER, and has been re-rated compliant/largely compliant in 31 of 40 FATF Recommendations, according to APG. Pakistan has also filed re-rating requests to APG on four more suggestions in the next follow-up report, which APG is now reviewing. The technological improvements made will aid in the accomplishment of efficacy in 11 of the APG MER process’s immediate objectives.

As a consequence of this significant progress, the APG has chosen to transition Pakistan from enhanced (expedited) to enhanced follow-up; and Pakistan will continue to report back to the APG on progress toward strengthening its implementation of AML/CFT measures.

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