Since June 2008, Pakistan made a high-level political commitment to work with the Financial Action Task Force (FATF) to work in the Asia Pacific Group (APG) to strengthen its AML CFT regime and address strategic counter-terrorist financing-related deficiencies. Pakistan continued political commitment has led to significant progress across comprehensive CFT action plans. Pakistan through constant well-directed efforts, the right legislation in the areas where needed has finally been able to manage the demands given by the FATF. After the recent plenary in Berlin, Pakistan is optimistic that it would get off the FATF gray list as the government has proactively implemented a number of measures that address FATF’s concerns.
A delegation from Pakistan went to Germany where actions taken by Pakistan were reviewed in the FATF plenary meeting. Pakistan had also launched a massive diplomatic effort to get off the FATF’s gray list besides implementing all points of the FATF action plan.
There is a lot of positivity emanating after the current FATF decision, investors are hopeful of favorable FATF outcomes. Pakistan has been losing billions of dollars due to the problems being faced due to the lack of foreign direct investment, and bank transfers due to FATF obstacles. Reforms to ensure our banking sector and deal with terrorism in a fair manner will not only ensure better rule of law and a safe environment for the outside investment. A Pakistani-based independent think-tank, “Tabadlab, has estimated that it costs Pakistan’s economy $38bn since it was put on the gray list in 2018”.
FATF may announce to exclude Pakistan from the grey list after the visiting team in October submits a satisfactory report. This is a fact that without a joint effort getting out of the FATF grey list was not possible. Pakistan Army set up a cell led by DG MO which vigorously followed the FATF assignments and ensured legislation. It was a dedicated task as both political and military leadership were aware of the need to get the country out of the grey list. Besides this, foreign and finance ministries and relevant departments worked well and the united efforts resulted positively for Pakistan.
The last demand of FATF was to prosecute those involved in the terrorist activities, Pakistan is the country that sacrificed much in the war against terrorism. Pakistan carries a clear policy against non-state actors which is the reason Hafiz Saeed was prosecuted and was the major reason behind a satisfactory report about Pakistan at FATF plenary meeting.
It this a fact that national interest comes first then the personal, it is unfortunate that all political parties are claiming this as their credit rather than it being a united effort of both civilian and military leadership. There were two action plans in 2018 and 2021 and certainly, incumbent governments in collaboration with the establishment performed an effective role to fulfil the conditions. The state comprises political parties and institutions and on basis of their collective hard work, the country came out of a trouble situation.
India through its diplomacy has been putting all its effort to keep Pakistan on the FATF grey list, Indian FM once said that India has ensured that Pakistan remains on the grey list of FATF. Pakistan has been categorically expressing that the FATF forum is being used as a tool for political purposes. Pakistan has been demanding the universal application of FATF laws not for a specific country.
The delay in the implementation of the FATF action plan was that earlier there was no such clear understating of money laundering or terror financing as countries like Pakistan remained dealing with the tangible terrorist threat. With the passage of time expertise was developed through experience and recommendations by the FATF. Out of many positives, one can say that the FATF challenge has actually streamlined the financial and institutional discipline of the country internally and a credible image internationally.
As the FATF mission will send a mission in October to oversee the progress made by Pakistan, during this time authorities in Pakistan need to make sure that no deficiency remains in CFT and AML regimes. This is a clear opportunity to get rid of the FATF challenge once and all, Pakistan can become an example for the world community being a country that remained twice on the gray list but managed to come out of it.
