PARIS – Unanimously agreeing to put into effect its February decision to place Pakistan in the grey list for inaction against terror funding, the Financial Action Task Force (FATF) has laid out a 10-point action plan for compliance with its guidelines.
Pakistan’s failure in implementing the elaborate action plan may result in it being included in the black list the next year. After 2012-15, this is the second time it has been grey-listed and is facing sanctions.
Pakistan has been instructed to take measures demonstrating that UN-designated terrorists and banned terror outfits such as Hafiz Saeed and Masood Azhar, Taliban and Haqqani Network, Jaish-e-Mohammad, Lashkar-e-Taiba, and their affiliates, are deprived of their resources and their sources of funding are choked.
FATF will “closely monitor” Pakistan’s efforts to implement its action plan to accomplish the above objectives, including by:
- Demonstrating that terrorist financing risks are properly identified, assessed, and that supervision is applied on a risk-sensitive basis
- Demonstrating that remedial actions and sanctions are applied in cases of AML/CFT violations, and that these actions have an effect on AML/CFT compliance by financial institutions
- Demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS)
- Demonstrating that authorities are identifying cash couriers and enforcing controls on illicit movement of currency and understanding the risk of cash couriers being used for terrorist financing
- Improving inter-agency coordination including between provincial and federal authorities on combating terrorist financing risks
- Demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest range of terrorist financing activity and that terrorist financing investigations and prosecutions target designated persons and entities, and persons and entities acting on behalf or at the direction of the designated persons or entities
- Demonstrating that terrorist financing prosecutions result in effective, proportionate and dissuasive sanctions and enhancing the capacity and support for prosecutors and the judiciary
- Demonstrating effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services
- Demonstrating enforcement against targeted financial sanctions violations including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases
- Demonstrating that facilities and services owned or controlled by designated persons are deprived of their resources and the usage of the resources.
The FATF, in its Paris Plenary that concluded on Friday, observed that Pakistan had this time round made a high-level political commitment to work with the global watchdog and the Asia Pacific Group, of which it is a member, to strengthen its anti-money laundering and counter terror-financing regime.
Pakistan will have to take steps to ensure that terror funding risks are properly identified, assessed and that supervision is applied on a risk-sensitive basis. It will also be required to show that remedial measures are being taken to prevent financial institutions from indulging in money laundering and terror funding.
The country will have to take stringent action against illegal financial operations, identify cash couriers and enforce controls on illicit movement of currency. It has been told to improve coordination between the provincial and federal authorities on combating terror funding and enforce effective prosecution and conviction of the designated persons, entities and their affiliates.
The FATF has also sought actions demonstrating effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all designated terrorists and those acting for or on their behalf.