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The Paris-based Financial Action Task Force (FATF) on Friday formally announced that Pakistan has been removed from its grey-list and is no longer subject to an increased monitoring process of its financial transactions.
Announcing the decision, FATF President Raja Kumar recalled that Pakistan had been on the grey-list since 2018. “It has two concurrent action plans,” he said. “After a lot of work by Pakistani authorities, they have largely addressed all of the action plan items,” he said, adding that a task force had conducted an onsite visit at the end of August that had verified a high-level of commitment from the Pakistani leadership; sustainability of reforms; and commitment to make future improvements.
“As a result of these action plans, Pakistan has made significant improvements to strengthen the effectiveness of this framework for combating terrorism financing,” he added.
In an accompanying statement, the FATF welcomed Pakistan’s progress in improving its anti-money laundering and counter-financing of terrorism regime by addressing technical deficiencies to meet the commitments of its action plans comprising 34 action items.
“Pakistan will continue to work with Asia Pacific Group to further improve its AML/CFT system,” it added.
‘Whitelisted’
In a press conference after the decision was announced, Minister of State for Foreign Affairs Hina Rabbani Khar said Pakistan had been removed from the grey-list after four years of sustained efforts. Following the onsite visit, she said, “FATF has fully recognized completion of all substantive, technical as well as procedural requirements of Pakistan’s 2018 and 2021 Action Plans.”
According to Khar, the decision to remove Pakistan from the “list of jurisdictions under increased monitoring” was unanimous, adding: “In simpler terms, Pakistan has been whitelisted by FATF.”
She stressed that the “whitelisting” was a result of reforms undertaken in the past four years, including amendments to laws related to anti-money laundering and countering the financing of terrorism; increased synergy among various agencies to streamline processes related to countering money-laundering; enhanced international cooperation with other jurisdictions and organizations; implementation of supervisory structures and necessary administrative protocols; and allocation of financial and human resources to improve Islamabad’s 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 stressed, maintaining that the one lesson the country should take away from this is to not allow the momentum of reform to be reversed. “We need to sustain the efforts for our own benefit and for the growth and development of our country,” she added.
Claiming credit
In a posting on Twitter, Prime Minister Shehbaz Sharif praised the civil and military leadership for the “hard work” that led to Pakistan’s removal from the grey-list. “Pakistan exiting the FATF grey-list is a vindication of our determined and sustained efforts over the years,” he wrote. “I would like to congratulate our civil, military leadership as well as all institutions whose hard work led to today’s success,” he added.
Similarly, Finance Minister Ishaq Dar congratulated the nation on the development and praised the efforts of civilian and military leaders for the achievement.
PTI leader Hammad Azhar, who led efforts to initiate reforms while his party was in power, said credit went to the team of officers at the center and in provinces. “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 government divisions,” he wrote on Twitter.
Pakistan was placed on the FATF’s grey-list in June 2018 after being found in violation of the watchdog’s recommendations in 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 four years of various reforms, the FATF announced in June 2022 that Pakistan had completed all action plans and would be removed from the grey-list after an onsite visit. That visit occurred in mid-August and finally led to the country being “whitelisted” on Friday.