Pakistan must do more on terror financing: FATF

islamabad — Not impressed with Pakistan’s efforts to combat terror financing, a delegation of the Financial Action Task Force (FATF) has asked it to do more to strengthen its legal framework if it wants to avoid being blacklisted by the Paris-based anti-money laundering watchdog, according to a media report on Thursday.

Currently placed on the FATF’S ‘grey list’, Pakistan has been scrambling in recent months to avoid being added to a list of countries deemed non-compliant with antimoney laundering and terrorist financing regulations by the FATF, a measure that officials here fear could further hurt its economy.

A second team of experts from the FATF arrived over the weekend to review the progress made by Pakistan on an action plan agreed in June to address global concerns.

Daily reported that the delegation of the Asia Pacific Group (APG) of the FATF was not impressed with the progress made by Pakistan so far as it found the legal framework insufficient, and the institutional arrangements weak.

According to sources, the delegation feared that the setup installed for scrutinising the activities of non-profit organisations, brokerage houses, exchange companies and donations of corporate entities — registered under the companies act — was not robust enough.

The sources said that the APG believed that even in areas where the legal framework appeared vigorous, the implementation mechanism was not geared to track down financial flows of the entities in

question, because the agencies involved were not well-connected, according to the report.

This weakness was prominent in real estate brokerages where large business transactions remained outside the ambit of legal records.

A team of the Securities & Exchange Commission of Pakistan (SECP) reported to the APG that

brokerage houses were largely documented though real estate dealers and their operations were generally outside its area of regulation.

The APG also noticed shortcomings in commodity trading — and the effectiveness of laws against money laundering through cross-verification of service providers. —