The Financial Action Task Force (FATF) on Friday formally placed Pakistan on the grey list due to ‘strategic deficiencies’ in its anti-money laundering and terrorism financing regime.
The decision came despite Islamabad showing progress in the majority of areas identified as threat the international terror financing watchdog.
The highly anticipated decision was taken by the FATF Plenary that met in Paris from June 24 to 29. The global body took the decision on the basis of a monitoring report of the International Cooperation Review Group (ICRG).
Pakistan has been placed among the jurisdictions (states) with strategic deficiencies Ethiopia, Serbia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen.
The FATF called on all those jurisdictions to complete implementation of the action plans expeditiously and within the proposed timeframes, vowing to closely monitor the implementation of those action plans.
However, the ICRG report showed that Pakistan did show progress on three out of four major areas of concerns. Cross-border smuggling of cash was the only major area where Pakistan admitted deficiencies.
Finance Minister Dr Shamshad Akhtar represented Pakistan at the meeting. Pakistani authorities refuted the allegation of lax supervision of the financial sector, terming it unjustified.
The FATF and the ICRG were informed that Pakistan had already asked banks to drop the ‘good guy’ list.
“Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counter-terrorist financing-related deficiencies,” according to the announcement.