Pakistan complies with 31 FATF recommendations

Pakistan has achieved a compliant/largely compliant rating in 31 out of 40 FATF Recommendations in Technical Compliance

Asia Pacific Group (APG) on Money Laundering has published results of Pakistan’s second Mutual Evaluation follow-up Report on 2 June 2021. Pakistan is struggling to comply with all recommendations of the FATF to come out of the grey list.

As per the report, Pakistan has achieved a compliant/largely compliant rating in 31 out of 40 FATF Recommendations in Technical Compliance. These results prove the sincerity along with the resolve of the Government in complying with FATF requirements.

They are also a manifestation of the irreversibility and sustainability of the complete process in bringing Pakistan at par with Global AML/CFT standards. These results are a manifestation of a whole government approach is adopted to achieve the same. An upgrade of 21 Recommendations within this short period of time remains unprecedented in FATF history.

FATF’s Mutual Evaluation Report (MER) of jurisdictions has assessed Pakistan in two domains i.e., Technical Compliance/Legal Instruments (40 FATF Recommendations) and Demonstration of Effectiveness (11 Immediate Outcomes). It had adopted Pakistan’s MER in October 2019 in which it rated Pakistan compliant and largely complaint in 10 out of 40 FATF Recommendations for the Technical Compliance. After the adoption of MER, FATF had placed Pakistan under Post Observation Period by FATF which expired in February 2021.

During the said period, Pakistan carried out major legal reforms with the enactment of 14 Federal Laws & 3 Provincial Laws along with relevant rules and regulations. The laws not only strengthened the systems in Pakistan but also brought in sustainability. According to news, Pakistan submitted its report to FATF on its Technical Compliance on 1st October 2020.

APG has acknowledged that Pakistan has made notable progress in addressing the Technical Compliance deficiencies identified in its MER. It has re-rated compliant /largely compliant in 31 out of 40 FATF Recommendations.

Pakistan has also submitted re-rating requests to APG on four more recommendations in next follow-up report which are under review by APG. The technical upgrades achieved will help manifest achievement of effectiveness in 11 immediate outcomes of the APG MER process.

As a result of this substantial progress, APG has decided to move Pakistan from enhanced (expedited) to enhanced follow-up and Pakistan will continue to report back to the APG on progress to strengthen its implementation of AML/CFT measures.