Pakistan still to implement action plan to avoid FATF blacklisting: Report

Currently placed on the Paris-based FATF'S 'grey list', Pakistan has been scrambling in recent months to avoid being added to a list of countries deemed non-compliant with anti-money laundering.

Published: 06th December 2018 04:00 PM  |   Last Updated: 06th December 2018 04:00 PM   |  A+A-

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ISLAMABAD: Ahead of a key meeting with the Financial Action Task Force (FATF), Pakistan is yet to address a critical deficiency in its legal regime that could hamper its capacity to seize properties of terrorist groups and can land it on the anti-money laundering watchdog's blacklist, according to a media report.

Currently placed on the Paris-based FATF'S 'grey list', Pakistan has been scrambling in recent months to avoid being added to a list of countries deemed non-compliant with anti-money laundering and terrorist financing regulations by the FATF, a measure that officials here fear could further hurt its economy.

A team of experts from FATF's International Cooperation Review Group (ICRG) is scheduled to visit Pakistan in the first week of January to assess the progress made by it on an action plan agreed in June to address global concerns.

The Express Tribune quoting sources in the ministry of finance said that the problem has arisen because of conflicting positions that Pakistan took before the FATF in earlier meetings about its legal regimes with regard to the freezing real estate assets of proscribed organisations.

The conflicting position suggests incompetence of the team that negotiated with the FATF, but the government is trying to address the issue before the upcoming ‘face-to-face' meeting of ICRG, according to the paper.

Finance Minister Asad Umar has held numerous meetings on the implementation status of the 27-point action plan of the FATF, said the sources.

Out of these 27 actions, Pakistan is required to deliver on 10 points by January 2019.

The sources said at least two action points are directly related to the issue of seizure of real estate assets of proscribed organisations.

But the authorities are hopeful that all the 10 action plans will be completed well before the time.

One of the outstanding issues is the right legal regime to freeze immovable assets of terror outfits.

One view was that Pakistan can fulfill this obligation under the UN Security Council Act of 1948.

But the other view was that the government may have to amend this law to cover some of the deficiencies.

In order to address the legal lacuna, the government may have to promulgate an ordinance as it lacks majority in the upper house of the parliament With effect from June this year, the FATF has placed Pakistan on the grey list of the countries that have deficiencies in their legal regime meant to combat money laundering and terror financing.

The country will have to deliver on all the 27 points by September next year.

In case it fails, Pakistan can be blacklisted, which carries serious financial implications.

Pakistan will have to technically comply to “demonstrate a comprehensive legal obligation to implement recommendation on targeted financial sanctions without delay, both asset freezing and ongoing prohibitions to provide funds and financial services", the report said.

This must include powers to take control of the funds or other assets and prevent the raising and moving of funds by the UN-designated persons, it said.

By January 2019, Pakistan will also have to demonstrate effective implementation of targeted financial sanctions against the assets of the UNSC designated persons and entities and their affiliates.

These include Da'ish, Al Qaida, Falahi Insaniyat Foundation (FIF), Jamaat-ud-Dawa, Lashkar-e-Taiba, Jaish-e-Mohmmad, Haqqani Network and persons affiliated with the Taliban.

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