FATF Asia-Pacific Group ‘blacklists’ Pakistan

Why is it in news?
  • Pakistan has been placed on the lowest rung, or “blacklist”, of the Financial Action Task Force’s Asia Pacific Group (APG) for non-compliance and non-enforcement of safeguards against terror financing and money laundering.
More in news
  • Review of the Mutual Evaluation Report (MER): The APG, one of nine regional affiliates of the FATF, met in Canberra from August 18 to 23 to discuss a five-year review of the Mutual Evaluation Report (MER) for Pakistan, and decided to place it among countries requiring “enhanced, expedited follow-up”. 
  • Quarterly reporting:
    (1) APG didn’t place any new punitive measures on Pakistan.
    (2) Thus, Pakistan will need to update quarterly to FATF-APG through reporting on improvement in its financial safeguards.
  • Countries under review in current session: Countries under review during the current session included China, Chinese Taipei, Hong Kong, China, Pakistan, the Philippines and the Solomon Islands.
  • Upcoming process:
    (1) The APG process is one of three review processes that Pakistan faces in the next few months.
    (2) The APG will meet again, to take forward the main 15-month process of Pakistan’s FATF evaluation, which will present its recommendations for the FATF plenary session in Paris.
    (3) At present, Pakistan is on the “greylist” of the FATF, a common group for countries that are termed “high risk and non-cooperative jurisdictions”. 
    (4) The Paris plenary will decide whether to remove Pakistan from the greylist, continue the listing, or downgrade it to a blacklist of non-cooperative countries.
    (5) Officials said the downgrade might not occur, given that any three countries in the FATF can veto it, and Pakistan is likely to secure the backing of China, Turkey and Malaysia.
    (6) However, the APG decision on Friday would make it difficult for Pakistan to extricate itself from the greylist. 
Financial Action Task Force
  • Inter-governmental body: The Financial Action Task Force (FATF) is an inter-governmental body established in July 1989 by a Group of Seven (G-7) Summit in Paris.
  • Objectives: To set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. 
  • Members of the FATF: The FATF currently comprises total 39 members- 37 member jurisdictions and 2 regional organisations, representing most major financial centres in all parts of the globe.
  • Policy-making body: The FATF is a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
  • Monitoring member states: The FATF monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures, and promotes the adoption and implementation of appropriate measures globally. 
  • FATF Plenary:  It is FATF's decision making body. It meets three times per year.  
Source
The Hindu
Posted by Jawwad Kazi on 24th Aug 2019
<< Previous Next >>