After 4 long years, FATF pulls Pakistan out of 'grey list'

FATF unanimously decides to remove Pakistan from “list of jurisdictions under increased monitoring”; country has been whitelisted

Business Desk
Government delegates and partner organisations from across the world attend the final day of the FATF plenary in Paris. — Twitter/@FATFNews
Government delegates and partner organisations from across the world attend the final day of the FATF plenary in Paris. — Twitter/@FATFNews

  • FATF whitelists Pakistan after four years.
  • Ruling alliance congratulates nation, give civil-military leadership credit.
  • PTI takes credit of addressing all action plan items.

PARIS: The Financial Action Task Force (FATF) — the world's money laundering and terror-financing watchdog — said on Friday that Pakistan has been removed from the grey list and is no longer subject to its increased monitoring process.

The Paris-based inter-governmental body had put Pakistan on its grey list of untrustworthy jurisdictions in June 2018 because of "strategic counter-terrorist financing-related deficiencies."

FATF President Raja Kumar, in his press conference at the conclusion of its plenary, stated that Pakistan had been on the grey list since 2018.

He said: “It has two concurrent action plans. After a lot of work by Pakistani authorities, they have largely addressed all of the action plan items."

Kumar maintained that the task force had conducted an onsite visit at the end of August. "The onsite team verified that there is a high level of commitment from the Pakistani leadership, sustainability of reforms and commitment to make improvements in the future," he said.

“As a result of these action plans, Pakistan has made significant improvements to strengthen the effectiveness of this framework for combating terrorism financing.”

Pakistan will continue to work with APG

In its brief statement, the financial watchdog welcomed Pakistan’s significant progress in improving its anti-money laundering and counter-financing of terrorism (AML/CFT) regime. 

"Pakistan has strengthened the effectiveness of its AML/CFT regime and addressed technical deficiencies to meet the commitments of its action plans regarding strategic deficiencies that the FATF identified in June 2018 and June 2021, the latter of which was completed in advance of the deadlines, encompassing 34 action items in total," it read.

It should be noted that Pakistan is therefore no longer subject to the FATF’s increased monitoring process.

"Pakistan will continue to work with Asia Pacific Group (APG) to further improve its AML/CFT system," it further added.

'Pakistan has been whitelisted'

Addressing a press conference, Minister of State for Foreign Affairs Hina Rabbani Khar said: “I am pleased to announce that as a result of our sustained efforts during the last four years, acknowledgement of our unwavering political commitment and the successful on-site visit, FATF has fully recognised completion all substantive, technical as well as procedural requirements of Pakistan’s 2018 and 2021 Action Plans.”

She further said that FATF has unanimously decided to remove Pakistan from the “list of jurisdictions under increased monitoring”.

“In simpler terms, Pakistan has been whitelisted by FATF,” she revealed.

Highlighting some of the main points she stated:

  • FATF has welcomed Pakistan’s significant progress in improving our AML/CFT regime
  • It has been recognised that Pakistan has strengthened the effectiveness of its AML/CFT regime and addressed technical deficiencies and commitments of its Action Plans comprising of total 34 action items
  • Pakistan has addressed all strategic deficiencies that FATF identified in June 2018 and June 2021
  • Pakistan completed the 2021 Action Plan in advance of the deadlines
  • Pakistan is no longer subject to the FATF’s increased monitoring process, which means, Pakistan has been whitelisted by FATF
  • To advance and promote international cooperation, Pakistan will continue to work with APG to further improve its AML/CFT system

'Long, arduous journey'

She recalled that during the last four years, Pakistan has undertaken broad-based and comprehensive legal, administrative and procedural reforms to improve all aspects of our domestic AML/CFT regime.

She listed the following reforms which were taken during these years:

  • Amendment of laws related to anti-money laundering and countering the financing of terrorism
  • Increased synergy in the system, streamlined the processes
  • Improved inter-agency coordination
  • Enhanced international cooperation with other jurisdictions and organisations
  • Instituted supervisory structures
  • Created necessary administrative protocols
  • Allocated sufficient financial and human resources to improve our compliance with the FATF recommendations

“As a result of all this effort and hard work, Pakistan is now in a position where we can not only sustain the trajectory of these reforms without any international monitoring or pressure but can also share our expertise and resources with our countries in our region and beyond,” she claimed.

Khar asserted that if there is one lesson that the country should take from the last four years is to build on this “momentum of reform and not allow the gains to be reversed”.

“We need to sustain the efforts for our own benefit and for the growth and development of our country,” she maintained.

'Vindication of our determined efforts'

Commenting on the development, Prime Minister Shehbaz Sharif said: "Pakistan exiting the FATF grey list is a vindication of our determined and sustained efforts over the years." 

"I would like to congratulate our civil [and] military leadership as well as all institutions whose hard work led to today's success," the premier wrote on Twitter congratulating the nation.

Dar gives credit to the civil-military team

“Heartiest congratulations to the Nation on the removal of Pakistan’s name today from the FATF’s “grey list”, Finance Minister Ishaq Dar said.

He wrote that efforts of the civil-military team under the leadership of PM Shehbaz in achieving this goal are "highly commendable."

Foreign Minister Bilawal Bhutto-Zardari also announced the good news on his official Twitter handle. 

"Congratulations to the people of Pakistan. Pakistan has officially been removed from the FATF ‘grey list," he said.

Shabbar Zaidi congratulates HBL for 'excellent work'

Former FBR chairman Syed Shabbar Zaidi congratulated Habib Banks's Sultan Allana for his team's excellent and tireless work with respect to FATF.

Hammad Azhar takes credit

Former economic minister and senior PTI leader Hammad Azhar gave credit to the previous PTI-led government.

“From October 2018 till March 2022, Pakistan completed all action items relating to FATF dual scrutiny. Credit goes to our fantastic team of officers in centre [and] provinces from an array of government divisions,” he wrote on Twitter.

Tarin lauds Hammad Azhar

Former finance minister Shaukat Tarin took to his Twitter handle to laud the efforts of Hammad Azhar for taking Pakistan out of the FATF greylist.

"Due credit should go to the establishment, Federal Board of Reveue, and State Bank of Pakistan who worked together to achieve this difficult task," he wrote.

A look back

To recall, Pakistan was placed on FATF’s grey list in June 2018 whereby it was found non-compliant with recommendations of the FATF which targeted areas of risk assessment, national cooperation, targeted sanctions, preventative measures, due diligence, internal and third-party controls, law enforcement, regulation and supervision for money laundering and terror financing, amongst others.

After constant efforts in 2022, the FATF Plenary in June, under the German Presidency of Dr Marcus Pleyer, acknowledged the progress Pakistan made against money laundering and terrorist financing (AML/CFT) with all 34 action points implemented. 

Through various bills and amendments, the Pakistani authorities had diligently worked to satisfy the FATF. 

These related to laws against money laundering, freezing of assets and filing of cases against proscribed organisations, actions against terror financing etc. 

However, the final decision to take Pakistan off the grey list was conditional upon a successful on-site visit of FATF. The 

The FATF team conducted an on-site visit to Pakistan a few weeks back, with the purpose of inspecting the legal, regulatory and operational reforms and procedures implemented for compliance.