Islamabad: An international group monitoring Pakistan’s commitments to the global financial watchdog FATF has highlighted deficiencies in the country’s legal framework and asked Islamabad to make terror financing and money laundering extraditable offences, a media report said Thursday.
The Asia Pacific Group (APG) on Money Laundering, which is currently in Pakistan, will submit a report to the Paris-based Financial Action Task Force (FATF) which placed Pakistan on its ‘grey list’ in June.
The APG’s Mutual Evaluation report can play a critical role in retaining or removing Pakistan from the list after September next year.
Islamabad needs to comply by the end of September next year with a 10-point action plan it committed to the FATF in June to combat terror financing and money laundering to get out of the grey list or else fall into the black list.
Placement on the grey list hurts a country’s economy as well as its international standing.
The Express Tribune reported that delegation yesterday urged Pakistan to enact appropriate laws, enabling local officials to act upon requests of foreign countries to freeze illegal assets and extradite those involved in terrorism financing and money laundering.
The delegation met officials of the Financial Monitoring Unit (FMU) of the State Bank of Pakistan, Securities and Exchange Commission of Pakistan (SECP), National Counter Terrorism Authority (Nacta), Federal Investigation Agency (FIA) and representatives of the ministries of foreign affairs and interior.
It urged the country to make terror financing and money laundering extraditable offences.
Highlighting deficiencies in Pakistan’s legal framework, the visiting APG team pointed out that this could hamper Pakistan’s effective response on requests of mutual legal assistance by foreign countries in money laundering cases, officials said.
Stressing the need for strengthening domestic legal framework by October, members of the APG team an on-site inspection would be carried out by the regional body after this period.
It also urged the authorities concerned to give predicate offence monitoring powers to the Securities and Exchange Commission of Pakistan (SECP) and National Accountability Bureau (NAB).
The group’s other areas of concerns were activities by non-profit organisations, narcotics trafficking and proceeds of crimes.
The team comprises officials from the US, Turkey, China and the UK. Officials from the US Treasury and the UK’s Scotland Yard are part of the delegation.
Discussions are taking place on technical grounds where Pakistani authorities are trying to address the APG’s concerns.
During its third day of visit, the AGP team discussed the status of implementation of the FATF recommendations on supervision of financial institutions, challenges posed by beneficial ownerships and trusts, the targeted financial sanctions against terrorism and proliferation of weapons of mass destruction and mutual legal assistance and extradition.
After discussions, the AGP will prepare the second draft of technical compliance report before October, which can be improved upon during the mutual evaluation on-site visit, scheduled for October.
Pakistani authorities were of the view that each department had its own mutual legal assistance arrangement, which could meet the needs of other countries. However, they said that this did not fully persuade the APG team.
Pakistan is also not a signatory to mutual legal assistance treaties with countries such as the US, the UK, Canada, the UAE, Malaysia and Thailand.
Officials said that the APG team also expressed concerns about implementing recommendations on extradition of criminals involved in money laundering and terrorism financing.
The FATF makes it mandatory for member countries to deny safe havens to individuals charged with financing of terrorism, terrorist acts or terrorist organisations.
Various departments gave presentations to the APG on their role in curbing money laundering and terrorism financing.
The visiting experts were largely satisfied with the performance of Anti Narcotics Force, SECP and NAB. But they sought improvements in the skill sets of the Financial Monitoring Unit and National Counter Terrorism Authority (NACTA).
Discussions were also held on effective supervision of financial institutions to ensure that the secrecy laws did not hamper implementation of the FATF recommendations.
The visiting experts also stressed that beneficial ownerships should not be used to protect the proceeds of crimes.
They also discussed Pakistan’s legal and regulatory regimes on beneficial ownerships and trusts, which could be used for laundering money.
Pakistani authorities are learnt to have informed the APG team about measures taken by the country to comply with the United Nations Security Council resolution 1267 and 1373, targeting financial sanctions against terrorists.