ISLAMABAD: The Asia Pacific Group (APG) on Cash Laundering has improved Pakistan’s score on 4 extra of the 40 technical suggestions of the Monetary Motion Activity Pressure (FATF) in opposition to cash laundering and terror financing (AML/CFT) however retained it on ‘Enhanced Follow up’ to satisfy the excellent necessities.
“Pakistan has 35 recommendations rated compliant or largely compliant (C/LC). Pakistan will remain on enhanced follow-up, and will continue to report back to APG on progress to strengthen its implementation of AML/CFT measures,” introduced APG, a regional affiliate of the Paris-based FATF.
Total, Pakistan is now absolutely ‘compliant’ with eight suggestions and ‘largely compliant’ with 27 others, in line with third Observe-Up Report (FUR) on Mutual Analysis of Pakistan launched by APG. The re-rating to compliant standing was one-notch up and three others on largely compliant standing.
The nation is ‘partially compliant’ with three suggestions in comparison with seven in June this 12 months and ‘non-compliant’ with two (unchanged in opposition to June) out of whole 40 suggestions. All in all, Pakistan is now compliant or largely compliant with 35 out of 40 suggestions of the FATF.
“Pakistan has made good progress in addressing the technical compliance deficiencies identified in its Mutual Evaluation Report (MER) and has been re-rated on R.10, R.18, R.26 and R.34,” the APG stated.
As such, Pakistan confirmed passable progress on one suggestion and upgraded to be compliant. This re-rating happened as Pakistan launched complete AML/CFT obligations for Central Directorate of Nationwide Financial savings (CDNS) and the entities that present the monetary actions beforehand supplied by Pakistan Put up are topic to the identical AML/CFT obligations as different SBP and SECP regulated individuals. Microfinance Banks (MFBs) and Alternate Firms (ECs) are additionally now topic to the identical AML/CFT obligations as different SBP regulated individuals.
Likewise, on three counts the place Pakistan was re-rated to ‘largely compliant’ standing from ‘partially compliant’ pertained to suggestions 18, 26 and 34. Advice 18 is about screening of workers and staff referring to monetary establishments, CDNS, MFBs and ECs and so forth.
This meant Pakistan additionally addressed deficiencies with respect to the worker screening necessities for banks and DFIs with new 9 provisions in SBP and SECP Rules. Amendments have been handed within the CDNS and Pakistan Put up Rules to offer enforceable AML/CFT necessities. Nevertheless, minor deficiencies stay with the SBP Regulation protection of necessities for monetary teams.
On Advice 26, the APG famous that deficiencies remained with respect to obligations for monetary teams and a scarcity of express provisions for SBP to revise threat assessments of REs or monetary teams in response to developments of their administration and operations. Gaps will stay with Pakistan Put up till the switch of its enterprise banking has concluded. Nevertheless, it was re-rated to the class of largely compliant.
Equally, on R-34, the APG stated Pakistan issued a variety of steering and performed suggestions sharing periods with REs to help implementation of their obligations, which largely aligns with ML/TF threat. Minor deficiencies stay with respect to the restricted sector particular suggestions and steering issued to attorneys, and with the standard of the pink flag indicators issued to REs however was re-rated to largely compliant.
The reporting date for this analysis was February 1, 2021 which implies that Islamabad might have made additional progress since then that might be evaluated at a later stage. In February 2021, Pakistan submitted its third progress report, requesting re-ratings for R.10, 18, 26 and 34. The APG welcomed the steps Pakistan had taken to enhance its technical compliance with all of the 4 suggestions.
The Ministry of Finance and head of the duty power on FATF Hammad Azhar individually welcomed the re-rating saying Pakistan was properly positioned in technical compliance compared to many different nations. For instance, if Pakistan’s place is in contrast in opposition to G20 nations, then Pakistan is on the fourth after Italy (38), Kingdom of Saudi Arabia (38) and the UK (38).
“Pakistan is now in the top tier of countries that have achieved a rating of C/LC for over 35 of the 40 FATF Recommendations,” the finance ministry stated, including that the nation additionally achieved the score of largely compliant or compliant in all of the six main suggestions of the FATF. The cash laundering offence, terror financing offence, focused monetary sanctions associated to terrorism and terrorist financing, buyer due diligence, report preserving and reporting of suspicious transactions.
Pakistan would proceed this momentum in addressing the remaining gaps recognized within the MER-2019 and would search upgrades within the remaining 5 suggestions, within the fourth follow-up report, the finance ministry added.
Pakistan’s MER was adopted in August 2019 during which the nation was rated compliant and largely grievance in 10 of the 40 FATF suggestions for technical compliance.
Printed in Daybreak, August 14th, 2021
