FATF Warns Pakistan: Removal From Grey List Doesn't Guarantee Protection Against Terror Financing

Pakistan was removed from the FATF 'greylist' in October 2022.

Paris:

The Financial Action Task Force (FATF), the global terror funding watchdog, has cautioned Pakistan that its removal from the 'greylist' in 2022 does not render it immune to money laundering and terrorist financing activities.

During a press conference in France, FATF President Elisa de Anda Madrazo stressed that all countries, including Pakistan, must maintain vigilance and continue implementing preventative measures against financial crimes.

"Any country that is on the grey list or has been on the grey list is not bulletproof against actions of criminals, whether money launderers or terrorists. We invite all jurisdictions, including those who have been delisted, to continue their good work to prevent and deter crimes," Madrazo stated.

Although Pakistan exited the FATF 'greylist' in October 2022, it remains under follow-up monitoring to ensure continued implementation of anti-terror financing protocols. Since Pakistan is not a FATF member, the Asia Pacific Group (APG) conducts this ongoing supervision.

The FATF's 'greylist' includes countries and jurisdictions placed under increased monitoring due to strategic deficiencies in their systems for countering money laundering and terrorist financing.

Madrazo's remarks come amid intelligence reports indicating that terrorist organizations like Jaish-e-Mohammad (JeM) are utilizing digital wallets to fund terror operations while concealing financial transactions.

It is worth noting that India's National Risk Assessment 2022 identifies Pakistan as a high-risk jurisdiction for terror financing sources.

Previously, a report titled 'Comprehensive Update on Terrorist Financing Risks' provided detailed analysis of terrorist financing methodologies and emerging threats, including the growing concern of state-sponsored terrorism.

A study with Indian contributions highlighted regional concerns regarding Pakistan's state-owned National Development Complex. The findings indicated that Pakistan continues to represent a high-risk jurisdiction in South Asia for proliferation financing.

Emphasizing FATF's global mission, Madrazo stated, "Regarding terrorist attacks in any jurisdiction, FATF remains committed to strengthening our standards and implementation through assessment processes to benefit people by reducing terrorist financing."

The FATF recently concluded its fourth plenary meeting in Paris under Madrazo's Mexican presidency, reaffirming its commitment to depriving criminals worldwide of their illicit gains.

According to an official statement, delegates from the Task Force's Global Network, representing over 200 jurisdictions and observers, participated in three days of discussions addressing critical issues in combating illicit finance.

During this meeting, the Plenary adopted assessment reports for Belgium and Malaysia, the first two FATF members evaluated under the new, more streamlined and risk-based assessment framework that emphasizes practical results in tackling financial crimes.

Additionally, the Plenary removed Burkina Faso, Mozambique, Nigeria, and South Africa from the list of jurisdictions under increased monitoring, following their successful completion of required Action Plans.