September 28, 2020

Pakistan Made Significant Improvements Says FATF: APG Report

The Asia Pacific Group (APG) of the FATF released a Mutual Evaluation Report (MER) regarding Pakistan’s compliance, on Sunday and said that Pakistan had completely or partially complied with 36 out of 40 conditions put forward before the country by the global watchdog. It said that the country was found to be non-compliant only on four of the 40 Anti-Money Laundering (AML) and Combating financing of terror (CFT) measures. The APG had improved Pakistan’s status in the previous meeting and had put the country in the Enhanced Follow-up category, which required Pakistan to file quarterly compliance reports and not biannual ones

Pakistan conducted a meeting with the APG in August and explained the progress made regarding the compliance on the conditions put forward by the FATF. The APG’s report held great significance as it would greatly affect the outcomes of the upcoming high-level meeting of the FATF with the country’s officials on Oct 13.

The report further added that, “While Pakistan has established a multi-agency approach to implement its AML/CFT regime; it is not implementing a comprehensive and coordinated risk-based approach to ML and TF.”

The four missed points are as follows:

  • (Designated non-financial business and profession) DNFBPs: Customer due diligence;
  • provided in the APG report:

o The AMLA does not contain a definition of CDD.

o There are no other enforceable requirements to give effect to this recommendation.

  • Transparency and beneficial owner/ownership of legal arrangements;
  • provided in the APG report:
  • No measures in place to mitigate the ML/TF risk with trust structures and other legal arrangements.
  • Registration of immovable property trusts involves only the registration of the trust deed and not the collection of beneficial ownership information beyond what is in the deed of trust.
  • Trustees themselves are not required to collect beneficial ownership information.
  • Regulations and supervision of DNFBPs;
  • provided in the APG report:
  • No AML/CFT supervisory authorities for DNFBPs.
  • No risk-based supervision of DNFBPs occurs.
  • Mutual Legal Assistance: freezing and confiscation.

provided in the APG report:

 

  • Lack of legal arrangements to provide MLA in terrorism matters, TF, and most predicate offenses.
  • Requirement for a bilateral treaty or other arrangement to meet foreign MLA requests concerning ML.
  • Lack of a general legal framework for assistance concerning predicate offenses with no link to ML.

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