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October 19, 2018

Weak replies annoy FATF team

Top Story

October 19, 2018

ISLAMABAD: After two weeks of meetings and deliberations with the Pakistani officials, the Financial Action Task Force (FATF) team visiting Pakistan is all set to submit a non-compliance report on the basis of wide gaps in the implementation of FATF recommendations.

Money laundering, terror financing: Pakistan gets six months to collect data, track major transactions

The gaps particularly relate to those recommendations which deal with the anti-money laundering (AML), regulation of non-profits organisations (NPOs) and financial monitoring units (FMUs), The News has learnt.

The report will be shared with the Pakistani authorities on Friday (today) as per background interviews with officials who have been part of the two-week meetings and feel highly disturbed after finding the FATF team “not happy with the answers submitted by different departments”.

The meetings with the visiting delegation were described by the officials as so tense that at one stage the FATF delegates literally became agitated exhibiting a behavior of annoyance, confided a senior official privy to these meetings.

“The FATF continuously expressed its dissatisfaction with replies submitted by different departments, especially the FIA, NAB, FBR, FMU and SECP,” he informed The News.

The official who represented Pakistan in the meetings with FATF team, comprising specialists from different countries, informed The News that a sticking point for the team was the question as to why most of criminal cases of law enforcing agencies related to AML in Pakistan did not stand the test of trial in the courts.

“The discussion with the delegation mostly focused on Pakistan’s capacity to pursue and prosecute AML cases which is admittedly our weak area of law enforcement,” said the official, adding that the FATF had also viewed with great concern the “low convictions and seizures in AML cases”.

A classified report prepared by different Pakistani departments has already warned the high ups about the outcome of FATF meetings. “The situation is not satisfactory” says the report likely to be sent to prime minister suggesting some quick steps in certain areas.

Earlier, the drafted risk assessment of Pakistan written and shared in 2017, was not taken seriously by departments at our (Pakistan) end. “No concert effort was made to handle the situation; as a result of poor preparation, the replies to questions of FATF team based on that report were usually found weak”, stated this classified report.

The report pointed out another area of weakness saying, “despite provision of law, our progress on both extradition from non-treaty countries and mutual legal assistance treaties with states on need basis remained abysmally low. This would be interpreted as official ‘lack of will’. This will not augur well for Pakistan in final assessment”. Further that the Financial Monitoring Unit is not seen as a vibrant, observant and proactive arm of the state, the report read.

The classified report also suggested some recommendations which include improvement things on Pakistan’s part. It suggest FMU has to be strengthened and erected on modern ground, The SBP has to ensure that no suspicious transaction unreported and non-compliant commercial banks which hide such transaction are penalized and coordination in between FMU and LEAs should be quick, fast and efficient.

Further that the quality of STR has to be improved dramatically. Presently, it is based on artificial intelligence and the search parameters given to super computer have no input from PIF or any other LEA.

The FIA, NAB and police departments have to come up with successful seizures and convictions that stand in the court. Nothing short of conviction be reported to the government. The report emphasized that interagency coordination has to be made the corner-stone of AML and CTF effort.

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