During a plenary meeting on Friday, the Financial Action Task Force (FATF) removed Pakistan from its “grey list” for successfully implementing 34 actions that “addressed technical deficiencies to meet the commitments of its action plans regarding strategic deficiencies” in Anti-Money Laundering/Combating Financing Terror (AML/CFT) from June 2018 and 2021.
In a statement, the FATF recognised that seven of the actions from the 2021 plan had been completed in advance and thus determined that Islamabad would no longer be “subject to the FATF’s increased monitoring process.”
In case you missed it... Pakistan and Nicaragua have been removed from the FATF’s Jurisdictions under Increased Monitoring list, often referred to as the 'grey list'. See the full update on the list here➡️ https://t.co/OvPfPyx63I #FollowTheMoney pic.twitter.com/TL25YZ91La
— FATF (@FATFNews) October 25, 2022
FATF President T. Raja Kumar noted that Pakistan has strengthened risk-based supervision of financial and non-financial institutions, improved asset confiscation outcomes, and investigated and prosecuted money laundering. However, he stressed that it would have to continue working with Australian firm Asia Pacific Group to continue to improve its 11 “immediate outcomes,” as 10 of them have a “low” effective level.
“We have been given assurances during the onsite inspection that it will beef up work on anti-money laundering and terror financing in future as well,” he revealed during a virtual press conference in Paris on Friday.
MoS Ms. @HinaRKhar held a meeting with FATF President Mr. T. Raja Kumar on the sidelines of FATF ICRG/Plenary meetings in Paris. Discussed Pakistan's constructive engagement with FATF and international community. pic.twitter.com/f7mKCotl9T
— Pakistan Embassy France (@PakinFrance) October 21, 2022
The announcement was made after Minister of State for Foreign Affairs and Chairperson National FATF Coordination Committee Hina Rabbani Khar visited FATF officials in Paris on Friday. “This truly is a result of whole-of-country efforts and demonstration of our resolve to improve our domestic systems to counter money laundering and financing of terrorism and bring them at par with the international standards. This would not have been possible without complete national consensus across the political spectrum,” she remarked, celebrating that Islamabad had been “white-listed.”
Similarly, the Pakistani Ministry of Foreign Affairs released a statement saying, “Despite many challenges, including Covid-19 pandemic, Pakistan continued the reform trajectory and sustained the high-level political commitment of aligning its domestic AML/CFT regime with international best practices.”
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 center & provinces from an array of govt divisions. pic.twitter.com/nodKUIDhaQ
— Hammad Azhar (@Hammad_Azhar) October 21, 2022
However, Pakistan’s previous government led by now-former Prime Minister Imran Khan’s Pakistan Tehreek-E-Insaaf (PTI) party claimed to take credit for the achievement, with party leader Babar Awan blaming the ruling Pakistan Muslim League Nawaz (PML-N) party for opposing the same measures it has now taken when it was in the opposition.
Following the announcement, Indian Ministry of External Affairs spokesperson Arindam Bagchi noted that “as a result of FATF scrutiny, Pakistan has been forced to take some action against well-known terrorists, including those involved in attacks against the entire international community in Mumbai on 26/11,” adding that “Pakistan must continue to take credible, verifiable, irreversible and sustained action against terrorism and terrorist financing emanating from territories under its control.”
Our response to media queries on Pakistan and the FATF "Grey List"https://t.co/JDQQMeCMi2 pic.twitter.com/TxgCAQiRMJ
— Arindam Bagchi (@MEAIndia) October 21, 2022
The Pakistani Foreign Ministry rejected India’s comments, calling them “misleading, baseless and fabricated propaganda” meant to discredit Islamabad’s achievements. Along the same lines, Khar condemned India as an “irresponsible country,” saying it should not “politicise the decision.”
Meanwhile, Chinese Foreign Ministry spokesperson Wang Wenbin welcomed the development, commending Pakistan’s efforts to “firmly follow through on its political commitment and continuously improve and enhance its Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) system over the past five years despite the difficulties.”
I would particularly commend the role & efforts of Foreign Minister Bilawal Bhutto, Army Chief General Qamar Javed Bajwa and their teams & all political parties for putting up a united front to get Pakistan out of the grey list. Alhumdulillah! https://t.co/LkX5tupMQe
— Shehbaz Sharif (@CMShehbaz) October 21, 2022
According to the FATF, when a country is placed on the grey list, “it means the country has committed to resolving swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring.” Being put on the list can scare away investors and creditors, hurt exports, and make global banks cautious of doing business with the country.
The FATF was founded in 1989 as part of a G7 initiative to combat money laundering and later included terrorism financing within its ambit. It has listed 20 countries in its grey list: Albania, Barbados, Burkina Faso, Cambodia, the Cayman Islands, Haiti, Jamaica, Jordan, Mali, Morocco, Nicaragua, Panama, Philippines, Senegal, South Sudan, Syria, Turkey, Yemen, and the United Arab Emirates. It also maintains a blacklist of “high-risk jurisdictions” and non-cooperative countries. Currently, only Iran, North Korea, and Myanmar are blacklisted.
Congratulations to the people of Pakistan for coming out of FATF grey list after four years of hard work by Government, institutions & individuals. Credit to all those who worked tirelessly, made changes in our laws & implemented the will to fight illegal movement of money 👏👏👏
— The President of Pakistan (@PresOfPakistan) October 21, 2022
Pakistan first was put on the “grey list” in June 2018 after India, supported by the United States (US), the United Kingdom (UK), and other European countries, highlighted “strategic deficiencies” in Pakistan’s handling of the FATF’s Anti Money Laundering/Countering the Financing of Terrorism regime.