FATF
FATF’s Context
The global watchdog for money laundering and
terrorist financing, which was established by the
G-7 Summit held in Paris in 1989.It is an
international policy making body which
develops and promotes policies
and drafts recommendations for the security of
global financial system, to eliminate terror and
other anti-social elements financing. It has nothing
to do with law enforcement matters, investigations
or prosecution.
Presently it has 39 members.
FATF or the Organization for Economic Co-operation
and Development (OECD) has two types of lists. Black
list countries and grey list countries
Blacklist Countries
Those countries which support
terror funding and money laundering or do not show
cooperation in the global fight against money
laundering and terror funding are blacklist
countries and also known as Non-Cooperative
Countries or Territories (NCCTs). FATF updates list
off and on depending on the cooperation from the
blacklist countries. The purpose of blacklisting is
to encourage countries to improve their policies
implement standard of Anti-Money
Laundering/Combating the Financing of Terrorism (AML/CFT).
Black list is also considered as warning to the rest
of the countries about high risk of money laundering
and terror financing. Some black list countries do
not have infrastructure or resources to implement
FATF’s AML/CFT standards.
Grey list Countries
Grey list or
International Cooperation
Review Group (ICRG)
is a warning given to the countries that may be
placed in black list, because these countries are
considered safe place for supporting terror funding
and money laundering. If a country fails countering
terrorism funding it is shifted from grey to black
list. Grey listed countries faces issues including
1. Economic
sanctions from international institutions (IMF,
World Bank, ADB etc.) and countries
2. The
problem in getting loans from international
institutions (IMF, World Bank, ADB etc.) and
countries
3.
Overall Reduction in its international trade
4. International
boycott
Pakistan’s legislations for FATF compliance
FATF published first blacklist in 2000. Whereas
Pakistan included in grey list first time in 2012
till 2015, after that it was included in grey list
again in 2018 (2nd time). Currently
Pakistan is still in grey list and Pakistan is
struggling to comply all 27 FATF targets.
On October 2019 Pakistan
comply with few targets, and given time till
February 2020 to comply all targets otherwise it
would be blacklisted but again failed to comply all
27 targets. Now Pakistan is working on
further legislative amendments expected to be
implemented in the near future including;
some of bills are tabled where as some bills are
passed
·
Foreign Exchange Regulation
Act (Amendment) Bill 2020
·
Anti-Money Laundering
(Amendment) Bill, 2019
·
Mutual Legal Assistance
(Criminal Matters) Act (MLA) 2020
·
Amendments to the ATA 1997
(2020)
·
NACTA Amendment Ordinance 2019
·
Control of Narcotic Substances
(Amendment) Bill 2020
·
The United Nations Security
Council Amendment Bill
·
Benami Transactions
(Prohibition) Rules 2019 and Benami Transactions
Ordinance 2019
·
The Islamabad Capital
Territory Trust Bill, 2020
·
1948 – Including rigorous penalties for proscribed
terrorists and organizations under the United
Nations (Security Council) Act of 1948. This
includes upping fines to Rs. 200 million and prison
sentences to 10 years.
·
1949 – Amendments to the Criminal Procedure Code (CrPC)
to meet international standards.
·
Amendments to the Companies Act 2017 to comply with
FATF standards in curbing money laundering.
As well as Pakistan now has a deadline
September/October 2020 for complying on following 13
points:
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