A final decision would be announced by the FATF president after the four-day virtual plenary on Feb 25. Ahead of the plenary, the FATF updated the overall performance of all countries. Based on this update, Pakistan has been shown to improve compliance on two out of 40 recommendations of the FATF. On the effectiveness of anti-money laundering and combating financing terror systems. It finds Pakistan’s progress non-compliant on four counts; partially compliant on 25 counts, and largely compliant on nine recommendations.
Pakistan’s evaluation at the plenary would be based on the 27-point action plan and not on these 40 recommendations.
The decision to be announced on 25th
They said the plenary could discuss all options, including blacklisting Pakistan; keeping it in the grey list, or removing it from the grey list. The plenary discussions would take place on the analytical report of the FATF’s assessors; based on the status compliance report of Pakistan. If the FATF assessment finds Pakistan’s report to be fully compliant; even then this would be followed by an onsite visit in a couple of months, and the country would formally move out of the grey list in June. Given the well known anti Pakistan stance from arch rival India, the latest diplomatic row with France, and the US’s open criticism of the court decision on the Daniel Pearl case; the debate at the FATF plenary could turn negative.
Pakistan fully complied with a 21 out of 27-point action plan last year; leading the FATF to soften its stance from previously aggressive threats, and yet it kept it in the grey list in October last year. In October last year, the FATF had announced that Pakistan had made progress across all action plan items and “largely addressed 21 of the 27 action items”. As all action plan deadlines stood expired, the FATF had said it strongly and urged Pakistan to swiftly complete its full action plan by February 2021.
Appreciating that it took “note of the significant progress made on several action plan items”. It had asked Pakistan to continue to work on implementing its action plan to address its strategic deficiencies by “demonstrating” that law enforcement agencies are identifying and investigating the widest range of terror; financing activity and that TF investigations and prosecutions target designated persons and entities. Those acting on behalf or at the direction of the designated persons or entities.
Pakistan on FATF’s Grey List
Pakistan has been on the FATF’s grey list for deficiencies in its counter-terror financing and anti-money laundering regimes since June 2018. Until the last assessment, Pakistan was found deficient in acting against the organizations; allegedly linked to the terror groups listed by the UN Security Council. Prosecuting and convicting banned individuals, and tackling smuggling of narcotics and precious stones.
FATF President Dr. Marcus Pleyer had noted in October that Pakistan had never been on the blacklist but in the grey list and based on its completion on 21 out of 27 items as largely complaint status; the country could be viewed “safer”. He had, however, made it clear that; six outstanding items were; “very serious and risks are not over until the government of Pakistan repairs all six outstanding items”.