Pakistan hails EU's decision to remove high-risk label, sees it as a positive step

Pakistan said EU's decision recognises Pakistan’s efforts in tackling anti-money laundering and terrorism financing issues

By
Web Desk
European Union flags fly outside the headquarters of the European Commission in Brussels. AFP/File
European Union flags fly outside the headquarters of the European Commission in Brussels. AFP/File

ISLAMABAD: Pakistan has expressed its appreciation for the European Union's decision to remove the country from its list of high-risk countries, citing the country's constant efforts to effectively tackle anti-money laundering and terrorism financing as the reason for the removal. 

The European Union (EU) removed the country from the “List of High-Risk Third Countries” after which country's businesses and individuals will no longer be subjected to “Enhanced Customer Due Diligence” by the regional body's legal and economic operators.

According to a press release by the Foreign Office spokesperson on Wednesday, Pakistan appreciates the EU's decision and views it as a positive move towards acknowledging the country's efforts.

The Foreign Office spokesperson said that the move recognises Pakistan’s performance in overcoming technical issues in its anti-money laundering and countering terrorism financing.

This follows the UK’s decision to remove Pakistan from a similar list in November 2022, the spokesperson said in a press release. The move reinforces the international community's confidence in Pakistan's capabilities regarding anti-money laundering and countering terror-financing efforts, it states.

“The removal from the list will ease financial transactions between entities from Pakistan and the European Union," it stated. "Pakistan looks forward to building on this development for mutually beneficial economic cooperation with the European Union and sharing its experience in the up-gradation of AML/CFT regimes with partner countries.”

A statement issued by the Ministry of Commerce on March 29 said that the EU authorities have removed Pakistan from the list of those nations which have strategic deficiencies in the Anti Money Laundering/Countering the Financing of Terrorism (AML/CFT) regime that pose significant threat to their financial system.

According to the delegated regulation, “Following the measures implemented to address the action plans agreed with the Financial Action Task Force (FATF), Nicaragua, Pakistan and Zimbabwe have remedied the strategic deficiencies in their respective AML/CFT regimes and no longer pose a significant AML/CFT threat to the international financial system. Taking into account their relevance under the revised methodology, the Commission considers that these jurisdictions no longer have strategic deficiencies in their respective AML/CFT frameworks and do not pose a significant threat to the financial system of the European Union.”

Pakistan was included in the “List of High-Risk Countries” on October 22, 2018 by the European Union.

The placement of Pakistan in the list had created an undue regulatory burden on “Obligated Entities” in the EU and there were instances whereby some of them had refused to entertain legal and financial transactions with individuals and entities based in Pakistan.

The ministry said that the new development would add to the comfort level of the European economic operators and is likely to ease the cost and time of legal and financial transactions by Pakistani entities and individuals in the region.