Departing FATF Grey list-Recommendations


Sundus Rauf &  Amna Zahid
The international watchdog against money laundering and terrorism financing, FATF, has put Pakistan
on ‘Grey List’ in June 2018 due to some strategic deficiencies, requiring it to combat the allegations by
complying with 27 conditions imposed on it by FATF. Despite of the fact that Pakistan is facing multiple
challenges internally as well as externally, it has succeeded to comply with 14 of these implications.
Mohsin Sheikh in his article “Pakistan’s Efforts Repudiated by FATF”published on May 19, 2020 in Daily
Parliament Times, has well presented the efforts of Pakistan in this regard which were
some what overlooked by FATF. The article before hands shall suggest recommendations which may help
Pakistan to get out of the FATF Grey-List in its upcoming session.Pakistan has been trying its best to
overcome all of its strategic deficienciesfor two decades. In this regard Pakistan has made a lot of efforts
and has taken very daring steps to fulfill the demands of FATF including comprehensive National Action
Plan to counter terrorism, effective policies and guidelines of SBP against unlicensed alternative
remittance system i.e. hawala and hundi business(taking a strong action against Khanani & Kalia
International (Pvt) Ltd., a reputed hawala company in Pakistan with its offices in other countries),
establishment of Financial Monitoring Unit, regulatory framework of SBP for private banking system etc.
It is very necessary to effectively implement these policies through the respective regulatory bodies.
FMU of the State Bank of Pakistan should have membership in the Egmont Group of Financial
Intelligence Units (FIUs) which is an informal network of FIUs of member countries. The intelligence
information as STRs is gathered by these FIUs and then is shared to other member states if required.
Similarly, NAB and FBR played their roles effectively through identification of suspicious banking
transactions and unveiling various financial scams, consequently arresting various politicians in this
regard through NAB action,including Asif Ali Zardari and Faryal Talpur, Nawaz Sharif, Shahbaz Sharif,
Maryam Nawaz, Khawaja Brothers andmany others. Federal as well as provincial departmentsmust hold
these corrupt and influential people accountable by bringing them to justicewhich eventually, shall
fashion deterrence for others.In addition, Pakistan has enacted various statutes to address FATF
reservations and also amended multiple enactments. The Sales Tax Act, 1990 was amended to make
insider trading and market manipulation as predicate offences in the light of section 42 of The Money
Laundering Act, 2010. The Income Tax Ordinance, 2001 has also been amended under the same section
of MLA, 2010 by inserting Sections 192 and 192A relating to prosecution for false statements in
verification or concealment of income.It is the dire need of the hourto implement existing statutory laws
to control tax evasion and to increase tax net through effective working of FBR. Meanwhile, Tax
Amnesty Schemes must be abolished at once. Prime Minister Imran Khanhasstrongly opposed these
schemes before taking office. However, unfortunately, he has failed miserably in keeping his promises.
The most important of all the efforts are the successful military operations to counter terrorism at the
cost of lives of more than 81,000 civilians and security personnel, cracking down about 20,000
terrorists.War against terrorism also drastically affected economy of the country, infrastructure, tax
collection and foreign investment causing a financial loss of more than $123 billion. Moreover, Pakistan
also banned UN declared terrorist organizations JeM, JuD, LeT and FIF, closed their offices and also
arrested Hafiz Saeed and who has also been sentenced. Furthermore, because of the poor and week

representation of the country at international forums, Pakistan failed to support its case before FATF
and international community.To our surprise, in spite of highlighting the ground realities of India that
how she faces biggest money laundering, corruption and Terror Financing scams and charges than ever.
Why our foreign office is quiet? Despite India has tried her best to induct Pakistan in Blacklist of FATF
and attempted to isolate Pakistan internationally, our Foreign Minister,Shah Mahmood Quraishi was
giving statement that Pakistan has no objection if India becomes a permanent member of UNSC.Though
India has failed despondently. We are to defend our own interests there rather to support our
opponents. It was due to the support of China, Turkey and Malaysia that Pakistan was not put in the
Black-List of FATF.Inexplicably, England, Canada, Italy, Argentine, Belgium, Brazil, India and many other
countries are also facing similar charges of money laundering. Banks, real estate, illegal gaming, sale of
valuable goods are the commonly used means to transport their illegitimate earnings. According to the
report of UNODC, cocaine trade stood at around $84 billion for the year 2009. The major income was
generated in North America and West and Central Europe. Why the world and FATF is quiet on that?
Similarly, India is at her peak for violating human rights in Kashmir, India herself against Muslim
minorities and is promoting State sponsored terrorism in parts of India as well as Pakistan which is well
documented at national and international forums. We ask why the world is quiet on that?To bring to
close, Pakistan should defend its case with strong representation on factual basis and ground realities
highlighting the sacrifices of the LEA’s and economic sufferings. The FO and Pakistani media must draw
attention to FATF’sdual standards of dealing with Pakistan and other countries in different ways. The FO
must point out at national and international forums how FATF is playing in the laps of India and US
among other countries and has unjustly put Pakistan in Greylist.Although, regardless to add that FATF
has shown satisfaction and appreciationforIslamabad’s efforts.FATF mustcogitate every country on the
basis of equality, impartiality andrule of law.The authors are the practicing lawyers, Faculty Members of
the University of Lahore and scholars of Criminology & Security Studies.——————————————–