Pakistan achieves compliancy rating of 31 out of 40 FATF recommendations

PAKISTAN has achieved the milestone of being compliant in 31 out of 40 Financial Action Task Force recommendations regarding technical compliance. According to Finance Ministry, the Asia Pacific Group has published the results of Pakistan’s second mutual evaluation follow-up report on 2 June 2021, wherein the country achieved the ‘compliant/largely compliant’.

The communique states that these results prove the sincerity along with resolve of the government in complying with FATF requirements.

In addition, the ministry stated that these results are also a manifestation of the irreversibility and sustainability of the complete process in bringing Pakistan at par with Global anti-money laundering and counter terror financing standards.

It bears mentioning that an upgrade of 21 recommendations within this short period of time remains unprecedented in FATF history.

FATF’S Mutual Evaluation Report of jurisdictions is assessed in two domains such as Technical Compliance/legal Instruments, comprising 40 FATF recommendations, and Demonstration of Effectiveness, comprising 11 immediate outcomes.

Pakistan’s MER was adopted in October 2019 in which Pakistan was rated compliant in 10 out of 40 FATF recommendations for technical compliance.

After adoption of MER, Pakistan was placed under an observation period by FATF, which expired in February 2021. During the said period, Pakistan carried out major legal reforms, including the enactment of 14 federal and three provincial laws, along with the imposition of relevant rules and regulations.

Thereafter, Pakistan submitted its report to FATF on its technical compliance on October 1, 2020.

APG has acknowledged that Pakistan has made notable progress in addressing the deficiencies identified in its MER and has been re-rated compliant/largely compliant in 31 out of 40 FATF recommendations.

Pakistan has also submitted re-rating requests to APG on four more recommendations in next follow-up report, which are currently under review. The technical upgrades achieved will help manifest achievement of effectiveness in 11 immediate outcomes of the APG MER process.

As a result of this substantial progress, APG has decided to move Pakistan from enhanced (expedited) to enhanced follow-up; and Pakistan will continue to report back to the APG on progress to strengthen its implementation of AML/CFT measures.