FATF a close miss.

Byline: Khaleeq Kiani

It finally boiled down last week to just three areas of 'demonstrating' outcomes that held back Pakistan's exit from the list of increased monitoring - the so-called grey list of the Financial Action Task Force (FATF) - for another four months i.e. until the third week of June.

Reaching a compliance level of 24 targets out of the 27-point action plan is no mean achievement despite missing several deadlines. It entailed a whole lot of reorganisation of the legal, security, financial, trading, religious, regulatory and law enforcement structures that various entities had been resisting for ages and treating like virtual no-go areas under their respective domains.

Pushed by various global adversaries, Pakistan's system against money laundering (ML) and terror financing (TF) was found wanting. The deficiencies were so 'strategic' in the areas of financial sector, border control, legal standards, investigations and prosecutions that even friends stood neutralised when it came to international arm-twisting on political considerations.

Pakistan has to report back to FATF with full compliance on all 27 items after which the global watchdog will send a technical team for onsite verification

The June 2018 grey-listing of Pakistan by the Paris-based global watchdog on ML and TF came as a jolt and woke up the authorities living in silos. According to FATF, when it places a jurisdiction under increased monitoring, it means the country has committed to resolving swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring.

Non-performance can lead to being described as high-risk jurisdiction, subject to a call for action, commonly called blacklist, with lethal consequences like international financial exclusion.

Pakistan made a top-level political commitment on a 27-point action plan. Roughly 10 items on the 27-point action plan pertain to the strengthening of the financial sector's security, regulator protocols and border controls. Nine points belong to targeted financial sanctions against proscribed organisations and about eight cover robust investigation and prosecution mechanisms and systems. At least three dozen laws at the federal level had to be changed to meet the highest global standards along with upstream and downstream reporting networks.

That has to be done in a culture where every shop - small and big - has fundraising and collection points, where at least half the...

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