· Since its designation in the Financial Action Task Force (FATF) “grey list” of countries in 2018, Pakistan has made considerable progress on the recommended action items.
· Between February to September 2020, Pakistan’s legislative bodies gave ascent to 14 different laws and regulations in order to comply with the FATF action plans.
· According to an FATF statement in Oct’20, Pakistan had made “significant progress” on 21 out of 27 action items. Further, the FATF had strongly urged Pakistan to swiftly complete its full action plan by February, 2021, then.
· The outstanding items mainly relate to strategic deficiencies identified by the FATF, including demonstration of law enforcement agencies identifying, investigating, prosecuting and sanctioning Terrorist Financing (TF), along with financial sanctions against designated terrorists and non-profit organizations related to TF.
· In addition, we would like to point out that the Anti-Terrorism Court (ATC) has also been active of late, adjudicating multiple convictions in relation to terror financing in Pakistan.
· Meanwhile, Government representatives including from the Ministry of Finance, continue to reiterate that “substantial progress” has been made on the remaining action items.
· Nevertheless, we flag Commercial Banks to be the biggest beneficiaries of any positive developments on the FATF front due to its association with the international financial system.
· An exit from the grey list would also increase Pakistan’s global reputation including that with foreign investors. It is also likely to improve Pakistan’s access to multilateral financing.
· Upcoming FATF virtual meeting is scheduled to take place during February 22-25, 2021.
Full report here: