Finance ministry rejects Indian media reports of FATF blacklisting Pakistan

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APG reviews Pakistan's 3rd Mutual Evaluation Report on anti-money laundering measures
APG reviews Pakistan's 3rd Mutual Evaluation Report on anti-money laundering measures

The Ministry of Finance has rejected Indian media reports about Pakistan being blacklisted by the Asia-Pacific Group (APG) — the regional affiliate of the Financial Action Task Force (FATF).

In the press release issued, the ministry said that media reports about Pakistan being blacklisted were “incorrect and baseless”.

Indian media on Friday reported that Pakistan had been placed on the blacklist; however, no source has been mentioned by the outlets.

The ministry said that during the APG meeting, the group had adopted Pakistan’s 3rd Mutual Evaluation Report (MER) and had put Pakistan in its enhanced follow-up as per APG’s Third Round Mutual Evaluation Procedures.

“In line with APG’s Third Round Mutual Evaluation Procedures, Pakistan would be required to submit follow-up progress reports to APG on quarterly basis,” the press release added.

In response to Dawn.com’s queries about the media reports, FATF Communications Management Advisor Alexandra Wijmenga-Daniel said that the decision to place a country’s name on the blacklist can only be taken by the global watchdog and not its regional affiliates.

“At each Plenary meeting, the FATF discusses and updates its two public documents identifying jurisdictions that may pose a risk to the international financial system. The decision to make modifications to these documents (including blacklisting or removal) lies with the FATF Plenary only,” she explained.

She said that the APG, in its plenary meeting in Canberra, had “assessed the effectiveness of Pakistan’s measures to combat money laundering and terrorist financing and discussed the findings”.

“At the FATF Plenary in October 2019, the FATF will examine Pakistan’s progress on its existing action plan and consider any next steps,” Wijmenga added. Until then, she said, FATF’s statement issued in June this year “remains up-to-date”.

“As with all mutual evaluation reports, the mutual evaluation of Pakistan must now undergo a quality and consistency review before it can be published,” she said.

According to a statement issued by the APG today, the body’s annual meeting and annual technical assistance forum were held this week from August 18 till August 23. The APG members adopted six significant mutual evaluation reports for Pakistan, China, Chinese Taipei, Hong Kong, the Phillippines and the Solomon Islands.

The statement, however, did not mention Pakistan or any other country’s placement on the blacklist.

The statement added that reports were analysed and discussed for two days and would be subject to a post-plenary quality and consistency review before being published in early October.

“The APG also adopted a number of follow-up reports for APG members and for joint APG/FATF members and also agreed on revised evaluation procedures for the coming year reflecting recent changes to global procedures.”

Additionally, the APG members adopted a CFT Operational Plan as part of a global strategy to address the concerns related to terrorist financing.

“As part of this plan, the plenary agreed to undertake a typologies and implementation project examining the financing and facilitation of foreign fighters and returnees.”

Two typology reports were also discussed and adopted.

The Ministry of Finance on Wednesday said the APG meeting on money laundering adopted Pakistan’s third MER on strengthening of anti-money laundering and countering financing terrorism (AML/CFT) safeguards that covered the period between February and October 2018. A senior-level delegation from Pakistan led by State Bank Governor Dr Reza Baqir attended the meeting.

Read: Another hurdle crossed as FATF meetings loom

The ministry said the third MER adopted by the APG meeting identified a number of areas where further actions were required to strengthen the AML/CFT framework. The report does not cover the areas in which Pakistan has made substantial progress since October 2018.

An official had explained that this primarily meant the APG had carried out an assessment of Pakistan’s AML/CFT regime and developed an opinion on where Pakistan stood with reference to FATF standards in October 2018. Importantly, the progress that Pakistan made since October 2018 had not been considered in this report due to APG rules based on almost 40 special standards and benchmarks for determining a country’s ranking on money laundering and eight special recommendations on terror financing.

Therefore, the APG assessment of Pakistan’s third MER may not truly reflect Pakistan’s existing ground realities that will be reviewed in the September 5 meeting to be held in Bangkok and then finally in Paris on October18-23 to determine if Islamabad has delivered on its 27-point action plan committed to the FATF to exit the grey list.

The Pakistan delegation had started bilateral meetings with key APG members until the end of current meetings on August 23 (today) to brief them on recent progress by Pakistan in implementing the FATF action plan. Earlier, an official told Dawn that the APG and many of its members were appreciative of the legislation being made, rules being improved and actions taken against banned outfits and revision in risk assessments of all corporate and non-corporate manuals, entities and outfits.

Pakistan is a member of the APG since 2000. APG is a regional body of Paris-based FATF of the United Nations and requires its members to undergo mutual evaluation on the compliance of its AML/CFT framework with FATF recommendations.

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