Pakistan 'one-step away' from FATF grey-list exit, says Khar

Minister of State for Foreign Affairs Hina Rabbani Khar on Saturday stated that the Financial Action Task Force (FATF) will conduct an onsite visit to Pakistan to validate technical commitments as the country is “one step away” from exiting the grey list.

Addressing a press conference, the minister stated that the visit is a procedural requirement which will result in the removal of Pakistan from the watchdog’s notorious grey list, “hopefully forever”.

Khar added that the state was working closely with the body to arrange the visit at a mutually convenient time and aims to complete the task before the October 2022 preliminaries.

The minister also highlighted that Pakistan’s commitment to strengthened financial regulation is a matter of national consensus, with the strategic objective to strengthen the economy and restore confidence.

The minister also acknowledged the “tireless” efforts of the teams who “burnt the midnight oil” to ensure the FATF action plans of 2018 and 2022 were completed.

“This has been a cross-government effort,” she stated adding that the success was an effort of the state of Pakistan and not a singular entity.

She expressed hope that Pakistan would be in a position to sustain its trajectory of reforms and “provide guidance and technical support to other countries in the region as we are ahead of the curve.”

Khar also stated that Pakistan would be “fully prepared” for the on-site visit. She urged the media, that due to confidentiality requirements of the regulatory body, to not prematurely share the news. “This has harmed our position in the past, we can never prejudge a situation,” she added.

Maintaining the government’s position, Khar stated that while Pakistan was the only country to have two action plans to tackle finical regulation, it was “too early to celebrate”.

In response to a question regarding FATF’s political bias, the minister stated that Pakistan can be positive about its journey and said “we have been enabled to be and seen as responsible and we have always emphasized that FATF should remain apolitical and technical. We hope that will continue”.

When asked a question regarding international interference in the process, Khar refrain from answering the question stating, “we have emphasized that body is apolitical but there is a certain country that has made it difficult in the past”.

The minister further added that Pakistan’s success was incumbent on its national agenda to tackle terror financing. “Our national and international agenda is aligned, we have learned many lessons and never want to slip,” she said.

When asked how “friendly ties” helped with Pakistan’s FATF position, the minister stated that diplomatic outreach was always a strategy. However, Khar emphasized that Pakistan had “honoured its commitments” and “over-performed” and therefore, deserved assistance from countries.

The minister, responding to a question, stated that while there was immense political pressure on Pakistan’s performance in the past, diplomacy aimed to neutralise the outlook.

She added that India has excessively worked to undermine Pakistan’s position in the FATF body. However, she hinted that India’s performance would not bode well as FATF mutual evaluation reports were due soon.

When asked again who deserves credit for Pakistan’s financial performance, Khar stated that she felt as if the country was more concerned with who deserved credit rather than with the FATF conference.

“We are giving credit to everyone who seeks it, and deservedly so,” she responded adding that the performance was not a certain political party’s agenda but Pakistan’s agenda.

“We have to remain mature about it, we don’t react to immaturity with immaturity,” said Khar furthering that the incumbent government would consider it a “win-win if everyone believes they have a stake in this.”

The minister also acknowledged that the previous Pakistan Tehreek-e-Insaaf (PTI) government deserved credit as they had a stake in the FATF action plans, “ we hope that every political party will continue to do so.”

Pakistan all but exits grey list

The global dirty money watchdog on Friday announced that Pakistan had substantially completed its two action plans, covering 34 items, as part of a bid to get off the grey list on which it has been since 2018 – a decision that would end the threat of Islamabad being put on the black list.

The FATF, while kicking off the process to remove Pakistan from the grey list, said an on-site visit was warranted to verify that reforms had begun and were being sustained, as well as that the necessary political commitment remained in place to sustain improvement in the future.

The FATF’s decision will now require commitments from all the Pakistani stakeholders to prove to the FATF upcoming mission that no serious deficiency remains in its Anti-Money Laundering (AML) and Combating Terror Financing (CFT) regimes.

The FATF handout noted that since June 2018, Pakistan made a high-level political commitment to work with the FATF and Asia Pacific Group to strengthen its AML/CFT regime and to address its strategic counter-terrorist financing-related deficiencies.

The FATF said that Pakistan’s continued political commitment to combating both terror financing and money laundering has led to significant progress.

In particular, Pakistan demonstrated that terror financing investigations and prosecutions target senior leaders and commanders of UN-designated terrorist groups and that there is a positive upwards trend in the number of money laundering investigations and prosecutions being pursued in Pakistan, in line with Pakistan’s risk profile.

In addition, Pakistan also largely addressed its 2021 action plan ahead of the set times, according to the FATF.

The Pakistani authorities said that Pakistan will submit its progress report in the first week of July to the FATF. The FATF team will then make on-site visits to Pakistan in the last week of July and hold meetings with the relevant government departments, according to Pakistani officials.

The on-site inspection team will submit its report to the FATF and on the basis of the on-site team report, the FATF will announce the decision of keeping or removing Pakistan from the grey list in the next plenary.

In February 2018, the FATF had decided to place Pakistan on the grey list with effect from June 2018 and handed it over a list of 27 conditions that it needed to implement to exit the grey list.

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