ISLAMABAD: Pakistan’s foreign office on Monday rejected India’s defense minister’s recent statement that the Financial Action Task Force (FATF) could “blacklist Pakistan anytime” as the Asia-Pacific Group on Money Laundering (APG) said in one of its reports that Islamabad had either fully, largely or partially complied with 36 of the 40 parameters set by the global watchdog to curb money-laundering and terrorism financing.
Islamabad was formally placed on the FATF gray list in June last year due to “strategic deficiencies” in its anti-money laundering and terrorism financing regime. The South Asian nation has since accused its arch-rival India of trying to get Pakistan downgraded further to the watchdog’s blacklist.
The foreign office said in a statement on Monday that India’s Defense Minister Rajnath Singh’s remark reinforced “Pakistan’s concerns, repeatedly highlighted to the FATF membership, about India’s attempts to politicize the FATF proceedings to further its narrow, partisan objectives.”
Singh claimed last week that the FATF could “blacklist Pakistan for terror financing anytime.”
However, Pakistan said that India’s incessant smear campaign and blatant partisanship called into question its credentials to be the co-chair of the Asia-Pacific Joint Group reviewing Pakistan’s progress in implementing the FATF Action Plan.
“We hope that the broader FATF membership would take cognizance of India’s continuing malicious campaign against Pakistan and reject any attempt aimed at politicizing the FATF proceedings,” the foreign office said. “It is important for FATF to ensure that the process remains fair and unbiased.”
Meanwhile, the APG’s 228-page report on money-laundering and terror financing in Pakistan came just a week ahead of the FATF’s plenary in Paris on Oct 13-18 that would determine whether Islamabad should be removed from its gray list or downgraded further to its blacklist.
The report based on Pakistan’s performance as of October 2018 showed that the country was fully “compliant” only in one aspect relating to financial institutions’ secrecy laws. It was found “partially compliant” on 26 recommendations and “largely compliant” on nine others.
The ministry of finance declined to comment on the report on Monday, saying it was “already out and we have nothing to add to it.”
The APG report said the State Bank of Pakistan did not have a clear understanding of the money-laundering and terrorism financing risks unique to the sectors it supervised. It added that the SBP was improving its understanding and implementing a risk-based approach, including conducting regular onsite and thematic anti-money laundering and countering the financing of terrorism [AML/CFT] supervision activities.
“Some improvement in AML/CFT compliance is evident as a result of SBP’s supervision, but the value of monetary sanctions imposed is low,” the report said, adding that the Securities and Exchange Commission of Pakistan had also a limited understanding of the money-laundering and terrorism financing risks and had not implemented a risk-based supervisory approach.
Although terrorism (excluding TF) poses a significant risk to the security, economy and territorial integrity of Pakistan, the seizure and confiscation amount was nil, it pointed out.
The report said that in view of the relatively high number of investigations into money-laundering offenses, the lack of confiscation action reflected that the focus of the investigations and prosecutions was not specifically on tracing the money.
“In addition, TF [terrorism financing] confiscation amounts (approx. USD $107,000 in 5 years) needs to be improved further,” it added.
Muzamil Aslam, a senior economist, said that Pakistan could not be included in the FATF’s blacklist on the basis of the APG report as the country had shown “significant progress” on 36 out of 40 parameters of the watchdog.
“This report is a proof of our willingness to improve our legal and financial systems to meet the FATF’s demands. Therefore, it should help offset uncertainty in our capital market,” he told Arab News.
Pakistan rejects Indian claim of blacklisting by global watchdog
Pakistan rejects Indian claim of blacklisting by global watchdog
- APG report says Islamabad has shown progress on 36 out of 40 parameters set by the global watchdog
- Economists say the report proved Islamabad’s willingness to improve its financial and legal systems
Pakistan announces four-day work week among austerity measures to offset impact of Middle East crisis
- The development comes as ongoing US-Israeli strikes on Iran disrupt oil supplies in Strait of Hormuz, push prices past $119 a barrel
- Islamabad bans government purchases, cuts fuel allocation for vehicles as well as workforce in public and private offices by 50 percent
ISLAMABAD: Prime Minister Shehbaz Sharif on Monday announced austerity measures, including a four-day work week and cuts in government expenditures, to offset the impact of rising global oil prices due to an ongoing conflict in the Middle East.
Global fuel supply lines have been disrupted in the Strait of Hormuz, which supplies nearly a fourth of world oil consumption, after Tehran blocked it following United States-Israeli strikes on Iran and counterattacks against US interests in the Gulf region.
Oil prices surged more than 25 percent globally on Monday to $119.50 a barrel, the highest levels since mid-2022, as some major producers cut supplies and fears of prolonged shipping disruptions gripped the market due to the expanding US-Israeli war with Iran.
In his televised address on Sunday night, Sharif said global oil prices were expected to rise again in the coming days but vowed not to let the people bear their brunt, announcing austerity measures to lessen the impact of fuel price hikes.
“Fifty percent staff in public and private entities will work from home,” he announced, adding this would not be applicable to essential services. “Offices will remain open for four days a week. One-day additional off is being given to conserve oil, but it would not be applicable to banks.”
Sharif didn’t specify working days of the week and the government was likely to issue a notification in this regard.
He said a decrease of 50 percent was being made in fuel allocation for government vehicles immediately for the next two months, but they would not include ambulances and public buses.
“Cabinet members, advisers and special assistants will not draw salaries for the next two months, 25 percent salaries of parliamentarians are being deducted, two-day salaries of Grade 20 and above officers, or those who are paid Rs300,000 ($1,067) a month, are being deducted for public relief,” he said.
Similarly, there will be 20 percent reduction in public department expenses and a complete ban on the purchase of cars, furniture, air conditioners and other goods, according to the prime minister.
Foreign trips of ministers and other government officials will also be banned along with government dinners and iftar buffets, while teleconferences and online meetings will be given priority.
Sharif’s comments were aired hours after Pakistani authorities said the country had “comfortable levels” of petroleum stocks and the supply chains were functioning smoothly, despite intensifying Middle East conflict.
Petroleum Minister Ali Pervaiz Malik said three oil shipments were due to reach Pakistan this week, state media reported.
Meanwhile, Pakistan Navy (PN) launched ‘Operation Muhafiz-ul-Bahr’ to safeguard national energy shipments, the Pakistani military said on Monday, amid disruptions to critical sea lanes due to the conflict.
The navy is conducting escort operations in close coordination with the Pakistan National Shipping Corporation (PNSC), according to the Inter-Services Public Relations (ISPR), the military’s media wing. It is fully cognizant of the prevailing maritime situation and is actively monitoring and controlling the movement of merchant vessels to ensure their safe and secure transit.
“With approximately 90 percent of Pakistan’s trade conducted via sea, the operation aims to ensure that vital sea routes remain safe, secure, and uninterrupted,” the ISPR said on Monday. “Currently, PN ships are escorting 2 x Merchant Vessels, one of which is scheduled to arrive Karachi today.”
