ISLAMABAD: Pakistan has been warned it must strengthen efforts to curb money laundering and terrorism financing by a group monitoring the country’s commitments to the global Financial Action Task Force (FATF).
A six-member delegation from the task force’s Asia Pacific Group (APG) on Thursday highlighted shortcomings in Islamabad’s compliance with an action plan to plug loopholes in its financial system.
The delegation voiced its concerns at the end of a three-day visit to Pakistan and urged authorities to address a range of issues.
Pakistani authorities’ action against terrorism financing was limited to global terror outfits, including Al-Qaeda, Haqqani Network, the Taliban and Daesh, the delegation said.
However, Islamabad had yet to take effective steps to halt funding to groups proscribed by the UN Security Council, such as Jamaat-ud-Dawa, Falah-e-Insaniat, Lashkar-e-Taiba and Jaish-e-Mohammad.
The delegation said authorities were pursuing a large number of terrorism cases, but only a few cases of terrorism financing.
They also expressed concerns over the low conviction rate on charges of money laundering and terror financing.
Poor coordination among the provinces and the federal government was hindering implementation of the action plan, the delegation said.
FATF, the global financial watchdog, placed Pakistan on its “grey list” — a list of “jurisdictions with strategic deficiencies” — in June this year.
Islamabad agreed to a 10-point action plan with FATF to be removed from the grey list, or face a further downgrade in September next year.
“The APG delegation was basically an observatory mission and it was briefed by all relevant departments about Pakistan’s efforts to curb money laundering and terrorism financing,” Saeed Javed, the Ministry of Finance’s media director general, told Arab News on Thursday.
Representatives of APG and Pakistan will hold a second meeting in mid-September to examine progress on the action plan, he said.
A 27-member Pakistani task force comprising representatives of different government departments is working to identify and plug gaps in the financial system, Javed said.
“We are hoping to comply with all the requirements of FATF before September next year,” he said.
Dr. Athar Ahmed, a senior economist, described Pakistan’s listing on the grey list as a political move and said the incoming government of Pakistan Tehreek-e-Insaf (PTI) needs to improve its diplomacy to ensure removal from the list.
“The FATF and the international community have expressed concerns about funding of proscribed outfits and loopholes in our financial system,” he told Arab News. “The State Bank of Pakistan has been doing its best to improve the scrutiny of financial transactions and we hope this would be enough.”
Ahmed said that Pakistan would need at least three votes in the 37-member FATF to be removed from the grey list, so “the new government needs to improve diplomacy along with the efforts to curb money laundering and terrorism financing.”
Khawaja Khalid Farooq, former chief of the National Counter Terrorism Authority, said weaknesses in Pakistan’s investigation and prosecution of terror funding and money laundering needed to be addressed.
“Given the perception of Pakistan in the international community, it will never be easy for us to go off the grey list. We need to improve our financial system and diplomacy to avoid further degradation,” he told Arab News.