BackPakistan likely to seek more time to comply with FATF conditions
In its February meeting, the FATF acknowledged the significant progress made in addressing deficiencies in 24 of the 27 action plan items, and asked the Pakistan authorities to complete the remaining items by June 2021
PremiumNew Delhi: Pakistan may seek more time to complete the last three actions it has to take to exit the Financial Action Task Force (FATF)’s grey list, citing delays amid the pandemic and capacity constraints.
Pakistan revealed this in its submission to the International Monetary Fund (IMF). Late on Thursday, the Washington-based multilateral lender released its staff-level report for Pakistan’s $6 billion loan programme and the country rev-iew report, wherein Pakistan reiterated its commitment to comply with FATF conditions.
“We have made progress towards the completion of our AML/CFT (anti-money laundering/combating the financing of terrorism) action plan to support our exit from the FATF’s list of jurisdictions under increased monitoring (grey list), but owing to capacity constraints, we require additional time to complete two outstanding SBs (structural benchmarks), namely the adoption of measures to effectively: (i) strengthen the AML/CFT framework and (ii) address terrorism financing consistent with FATF," then finance minister Abdul Hafeez Shaikh and State Bank of Pakistan governor Reza Baqir said in the joint statement to the IMF during the country review in March.
At its February 2021 meeting, FATF acknowledged the significant progress made in addressing deficiencies in 24 out of the 27 actions, and asked Pakistani authorities to complete the remaining items by June 2021, which would allow it to exit the FATF grey list.
“In light of the efforts to build capacity and the challenges presented by the covid-19 pandemic, we will need additional time to demonstrate effectiveness of our AML/CFT regime towards a substantial level of effectiveness in line with our AML/CFT action plan," Pakistan added.
Islamabad claimed that it has enacted amendments in 14 laws to address the technical compliance requirements and align with the FATF standards.
“An internal roadmap has been developed to phase-wise implement the mutual evaluation report recommended actions. Dedicated teams have also been formed for implementing the recommended actions on all 11 immediate outcomes," it added.
IMF warned that substantial risks cloud Pakistan’s growth outlook, amplified by the coronavirus pandemic. “Failures to meet programme objectives, including those related to the authorities’ AML/CFT action plan with the FATF, could hamper external financing and investment," it cautioned.
Pakistan’s economy is projected to grow at 1.5% in FY21 after contracting 0.4% in FY20.
FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system.
It has 39 members, including regional organizations—the European Commission and Gulf Cooperation Council.
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