UNIPATH STAFF
Pakistan’s commitment to reduce money laundering and terrorist financing occurring within its borders earned it a higher ranking from an international organization that monitors such illegal money transfers.
In October 2022, the Financial Action Task Force (FATF) confirmed it had removed Pakistan from its “gray list” of countries under increased scrutiny owing to deficiencies in anti-money laundering (AML) and combating the financing of terrorism (CFT).
FATF President T. Raja Kumar announced the decision at FATF headquarters in Paris. “Pakistan had addressed technical deficiencies to meet the commitments of its action plans,” Kumar said.
A FATF evaluation team had visited Pakistan in August to confirm that the country had improved its AML and CFT.
Pakistani Prime Minister Shehbaz Sharif praised his country’s efforts in adopting a 34-point plan to fight the problem. The plan includes judicial and regulatory reforms to help prevent illegal money transfers.
“Pakistan exiting the FATF gray list is a vindication of our determined and sustained efforts over the years,” Prime Minister Sharif announced upon hearing the news. “I would like to congratulate our civil and military leadership as well as all institutions whose hard work led to today’s success.”
FATF calls itself an “independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering and terrorist financing.”
Senior economist Haroon Sharif told Al Jazeera that the FATF announcement will allow Pakistan to sidestep penalties that could have harmed its financial system by retarding the flow of money.
“What the country must do now is to stay on course, and the major impediment in that has been its implementation capacity. It must reform institutions, which can then trap and identify any suspicious transaction and punish whoever is involved,” the economist told Al Jazeera.
FATF and other financial watchdogs had criticized Pakistan’s previous inability to prosecute organizations accused of supporting terrorism. In April 2022, Pakistan convicted financiers affiliated with the militant group Lashkar-e-Taiba, which Pakistan has declared a terrorist organization. Sources: Al Jazeera, FATF