Pakistan requested the Financial Action Task Force’s (FATF) Asia/Pacific Group (APG) to upgrade the country’s compliance status on at least 23 of the 40 global recommendations of the FATF, as per the second mutual evaluation follow-up report. To this, the AGP accepted that Pakistan has resolved many deficiencies in its anti-money laundering and combating terror financing regimes, including critical conditions like compliance with the UNSC resolutions, added security on weapons of mass destruction-related controls and unprecedented curbs on money laundering. The noticeable improvement has led AGP to increase Pakistan’s rating on 21 of the 40 technical recommendations by FATF. Pakistan is being ranked from enhanced (expedited) to enhanced follow-up.
While the APG has said that it welcomed the steps that the country had taken to improve its technical compliance, the steps it has taken in response do not reflect Pakistan’s incessant effort to truly put controls on money laundering and illegal funding. Pakistan had achieved the rating of “compliant” and “largely compliant” in 31 of the 40 FATF recommendations. This is enormous progress from October 2019, where Pakistan was rated “compliant” and “largely compliant” in only 10 of 40 FATF recommendations for technical compliance. Since February of 2020, where Pakistan’s progress was deemed unsatisfactory, the government has made aggressive efforts on FATF compliance, pushing legislative reforms that were not always popular, enacting 14 federal laws and three provincial laws along with relevant rules and regulations. In response, the AGP’s half-hearted improvement of ratings, while adding on unprecedented restrictive conditions on MLA.
Pakistan needs to be appreciated for its timely work. The lack of response to such progress indicates that international organisations will always a good degree of power politics influencing their functions. The slow response of FATF can be chalked down to India’s interest in keeping the “terrorism” narrative around Pakistan. Apart from compliance, Pakistan needs to work on its diplomatic angle as well to secure us out of the grey-list.