Pakistan has been removed from the European Union’s list of countries with strategic deficiencies in their Anti Money Laundering/Countering the Financing of Terrorism (AML/CFT) regime. This is a significant achievement for Pakistan, which has been working tirelessly to address the deficiencies identified by the Financial Action Task Force (FATF).
The FATF is an intergovernmental organization that was established in 1989 to combat money laundering and terrorist financing. It sets standards and promotes effective implementation of legal, regulatory, and operational measures for combating these activities. The FATF identifies countries that are deficient in their AML/CFT regimes and places them on a “grey list” or a “black list” depending on the severity of their deficiencies.
Pakistan was placed on the FATF’s grey list in 2018, which meant that it had deficiencies in its AML/CFT regime that needed to be addressed. Pakistan was given an action plan by the FATF, which it had to implement to address these deficiencies. The action plan included measures such as improving the supervision of financial institutions, enhancing the transparency of beneficial ownership information, and strengthening the legal framework for combating money laundering and terrorist financing.
The EU’s decision comes after the FATF decided in June 2021 to retain Pakistan on its “grey list” for failing to meet certain anti-money laundering and counterterrorism financing standards. However, since then, Pakistan has taken several measures to address the deficiencies identified by the FATF.
For instance, Pakistan has enacted new legislation to curb money laundering and terrorist financing, and it has established a new autonomous financial intelligence unit, the Pakistan Financial Monitoring Unit (PFMU), to enhance its ability to detect and prevent financial crimes. Furthermore, the government has been proactive in freezing assets of suspected terrorists and cracking down on illegal Hawala and Hundi operators.
The EU’s decision is a welcome development for Pakistan, which has been struggling to revive its economy amid the COVID-19 pandemic. The removal from the list will provide a boost to Pakistan’s image in the international community and enhance its attractiveness as an investment destination.
The removal of Pakistan from the EU’s list of countries with strategic deficiencies in the AML/CFT regime is a positive development that will benefit Pakistan’s economy. It is a testament to the government’s efforts to enhance the financial system’s transparency and effectiveness, and it will facilitate trade and investment between Pakistan and the EU. Pakistan must continue to work towards strengthening its AML/CFT accordingly to the requirements of the organization.