Compliance with remaining FATF guidelines requires ‘swift’ legislation — government advisor

KARACHI: As Pakistan got thrown another lifeline until June from the Financial Action Task Force (FATF) on Friday, a member of the government's economic advisory said it was mainly up to the parliament to act swiftly and make laws that met remaining FATF directions.
Islamabad was placed on the Paris-based terror financing watchdog’s greylist back in 2018 for its lack of adequate controls over terrorism financing. Since then, struggling with a balance of payments crisis, Pakistan was forced to turn to the International Monetary Fund for help and promised a series of measures to crack down on terrorism financing. This is the second four-month extension given to Pakistan to implement its agreed upon action plan.
“The majority of the remaining action items are related to legislations and it depends on the parliament how swiftly it acts to make laws,” Dr. Ashfaque Hassan Khan, a member of the government’s Economic Advisory Council, told Arab News on Saturday.
Pakistan was given 27 points to act on by the FATF, but on Friday, in a statement issued at the end of a week-long plenary meeting in Paris, the organization noted the country had largely addressed only 14 of those points, with varying levels of progress made on the rest of the plan.
“FATF again expresses concerns given Pakistan’s failure to complete its action plan in line with agreed timelines and in light of the TF (terrorism financing) risks emanating from the jurisdiction,” the intergovernmental body said.
The FATF also warned that failure to comply could lead to further penalties,  including the country further downgraded to a blacklist. With hardly four months to go before the next FATF review, relief will be temporary with the new deadline looming over the horizon.
“They [FATF] want tangible and result oriented actions. There is seriousness on the part of the government to meet the shortcomings but they don’t have able men to handle required tasks. Neither the parliament nor government institutions can deliver due to a lack of specialised personnel to tackle all the issues,” Dr Ikram Ul Haq, a prominent Lahore-based economics expert, told Arab News.
“From legislation to enforcement, we need to work on a war-footing to meet all the requirements pointed out to us repeatedly,” he said.
A ministry of finance statement said on Friday that a strategy had been formulated and was being implemented to complete the remaining items on the FATF plan as soon as possible.
Islamabad has already amended its laws dealing with AML/TF, with harsh punishments and enhanced financial penalties. The country has also amended the Foreign Exchange Regulation Act and the Anti-Money Laundering Act-- which are now in process of being promulgated as law.
Some experts however, are downplaying the possible outcomes of another unfavourable review in June.
“There are no tangible impacts except that the country remains part of discourse worldwide,” said Dr. Waqar Masood, one of Pakistan’s former, longest serving federal secretaries of finance.
“Pakistan has made a lot of progress-- even more than its capacity,” he said, and added that strengthening the legal jurisdiction of anti- money laundering and terror financing would take time.
Ahead of the FATF Paris moot, Pakistan sentenced Lashkar-e-Taiba and Jamaat-ud-Dawa leader Hafiz Saeed to five and a half years in prison on terrorism financing charges. The move was seen as a demonstration of compliance with FATF recommendations-- but did not do enough to change the country’s status with the organization.