There are 2 types of list of FATF:
- Black List: Countries on this list do not do anything about terrorist financing and money laundering.
- Gray List: Countries comfortable with terrorism financing and money laundering are included in the FATF gray list. An advanced level of this is that the country has entered the blacklist.
Pakistan does not want to enter the lists we mentioned above. Pakistan, which has made various arrangements to get out of this situation, wants to get out of the gray list and is implementing various FATF regulations to correct this loss of reputation.
Pakistan's Position in the International Arena
The danger of the idea of blacklisting Pakistan is never taken into account for political purposes. Blacklisted Pakistan's actions may not be predictable. A blacklisted Pakistan may be more dangerous and immune to international pressure.
The Chinese administration, which has tension with the US, can defend its ally in Pakistan. If Pakistan is blacklisted, China and Pakistan's friendship may become stronger, and both India and the US will not be happy with this situation. It would not be right to say that Pakistan has given up its policy of intervention against the IAK, but Pakistan's progress against terrorism is admirable.
Pakistan has finally stepped up its attempts to control militant units. This initiative also plays an important role in Afghan peace. The blacklisting of Pakistan could destroy all these transactions at once and provoke Pakistan again.
The US and India's conflicting interests have put Pakistan in a defensive position and a difficult position at the FATF. Pakistan has strived to ensure two situations: not to be blacklisted and get out of the gray list.
Islamabad, which was exposed to international pressure, finally put FATF on its agenda. Seeing the major AML / CFT shortcomings, he got to work with regulatory and practical steps. It has implemented many institutional/legal reforms to deal with money laundering and terrorism financing crimes by putting pressure on the militants.
Pakistan played a key role in communication with the US, the Taliban, and the Afghan government. The US appreciated Pakistan's efforts and stated how important they are for peace in the region. In response, Pakistan has filed demands to get out of the gray list.
FATF Compliance Process in Pakistan
The FATF warned Pakistan for not taking serious measures to prevent terrorist financing and money laundering in the country and took it on the gray list in June 2018. In recent years, Pakistan has made many attempts to comply with FATF regulations and suppress militant groups specified by the FATF. FATF said that Pakistan had completed 14 of its 27 action items and said it should hurry to complete them.
According to the statements made by the FATF, Pakistan complied with 24 of the 27 rules. Due to the shortening of the deadline, the FATF is warning Pakistan to fulfill its commitments before June 2021. These warnings of FATF drew a reaction because they obeyed 90% of these rules. But China, Turkey, and Malaysia are involved in these issues taking place next to Pakistan. Because of this, it is difficult for Pakistan to be blacklisted. This may not be possible only with allied countries. It also depends on performance and compliance. Government officials say they have completed all action points.
19 countries do not comply with FATF's fight against terrorism financing and money laundering. The two countries on the blacklist are North Korea and Iran. Doing business with these two countries is not costly and profitable. As in this example, countries that are blacklisted do not have dignity and cannot find a place in the international arena.
AML Compliance in Pakistan
As Pakistan is a member of FATF, it has some responsibilities and liabilities, as stated above. FATF publishes recommendations for countries to combat financial crime effectively. Pakistan, which already has the risks of being blacklisted and desires to get out of the gray list, must comply with FATF regulations when creating AML policies and regulations. Pakistan is making a serious effort to ensure that AML policies and regulations are in line with FATF.
If you are obliged to comply with FATF regulations, you must act immediately and comply with AML regulations. Sanction Scanner offers great convenience and makes it easy for companies to fulfill their AML obligations. With AML data from more than two hundred countries, you can protect your company from financial crime and ensure compliance with AML regulations. You can contact us and request a demo of these services.