Pakistan Moves to Improve its AML Deficiencies

In response to a recent Financial Action Task Force (FATF) meeting held in Paris this past February at which Pakistan was nominated to be placed on FATF’s Grey List, Pakistan is moving to address the deficiencies in its Anti-Money Laundering (AML) and Counter Financing Terrorism (CFT) regime by creating a consolidated database of known terrorists and terrorist organizations which will be available to financial institutions and law enforcement agencies.

FATF is a global task force whose main goal is to combat money laundering, terrorist financing and other illegal activities related to finances.  Pakistan will officially join the Grey-List this June which includes countries that are not doing enough to fight money laundering and terrorist financing.  Pakistan was previously on the list from 2012-2015 but because of their efforts to improve and their completion of an International Monetary Fund (IMF) program, the country was removed from the list.

Pakistan is feeling the consequences that follow being placed on the list such as being designated a risk to the international financial system, but is acting quickly to remedy the matter.  Part of Pakistan’s drafted action plan to combat the deficiencies in its AML/CFT regime is to improve controls by financial institutions and money service businesses that will help prevent the illicit cross-border movement of currency, and aid the progress of terrorist financing investigations and prosecutions.  These measures also include the identification and sanctioning of all unlicensed money remitters and exchange companies.  The data that will be compiled on these companies will include details of the investigation, prosecution and conviction in terrorist financing cases which will be centralized in the AML/CFT database so that all institutions are aware of ongoing investigations.  

In addition, Pakistan also plans to implement a currency declaration system at all entry and exit points of the country.  This will allow officials to detect, interdict, seize and sanction those who are cash couriers which will help prevent the issue of cross-border transportation of cash.  Other suggestions by the FATF for Pakistan include the enforcement of prohibition of funds and financial services and a more productive investigation and conviction process for terrorism cases.


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