The Financial Action Task Force (FATF), a global organisation which sets standards for the banks, has slammed Pakistan for its continued complicity in financing terrorist entities and has said that certain United Nations-designated terror groups in that country continue to receive money due to lack of control by the authorities.
The FATF had in 2015 put Pakistan on its watch list and but did not found its efforts satisfactory. However, it took off Afghanistan for its high political commitment in actions against money laundering, and financing of terror groups.
During the FATF Third Plenary under the Presidency of Spain in Valencia, Pakistan’s record once again came under close scrutiny. The report by the core committee of the FATF’s International Cooperation Review Group (ICRG) was highly critical of Pakistan’s continued complicity in financing terrorist entities. The report highlighted that there continue to be certain UNSCR 1267 designated entities in Pakistan that receive and disperse funds without controls being applied by the competent authorities.
As a consequence, the ICRG has requested the Asia Pacific Group (APG) to provide the revised follow-up report on the Pakistan to ICRG following the discussion of the report at the APG Annual Meeting in July 2017. Should the APG Plenary decide not to provide this report, the ICRG has granted permission to the ICRG co-Chairs to request in August for Pakistan to comprehensively report directly to the ICRG in September on updates regarding Pakistan’s implementation of UNSCR 1267 with respect to designated entities of concern.
Interestingly, Pakistan’s continued monitoring by the ICRG is in sharp contrast to Afghanistan, which has been recommended to be removed from the ICRG Compliance Document after an on-site visit report found it satisfactory and noted about Afghanistan’s high level political commitment and institutional capacity to continue implementation of the global anti money laundering (AMl) and counter-terrorist financing (CFT) reforms.
“In February 2015, when Pakistan was removed from ICRG monitoring, the FATF encouraged Pakistan to continue working with the FATE and APG to improve and effective implement its AMl/CFT systems, in particular with respect to implementing UNSCR 1267. When Pakistan reported back on this matter, some ICRG members expressed a concern that these issues still had not been resolved. Consequently, the ICRG had referred the issue of Pakistan’s implementation of UNSCR 1267 with respect to designated entities of concern to the APG for ongoing monitoring,” the report said.
It further added that in February 2017, the ICRG requested the APG to provide its analysis report on Pakistan. “Given the concerns raised in this report that highlighted that there continue to be certain UNSCR 1267 designated entities that receive and disperse funds without controls being applied by the competent authorities, the ICRG recommends further reporting to the ICRG be provided either by the APG or, failing that, directly from Pakistan,” the report added.