Pakistan suffered $ 38 billion loss due to FATF gray listing
The article titled “Bearing the Cost of Global Politics – The Impact of the FATF Gray List on the Pakistani Economy” was written by Naafey Sardar.
This comes against the backdrop of a new gray label for Pakistan.
Pakistan was put on the gray list, or the list of countries under “heightened surveillance”, because the Paris-based United Nations watchdog deemed it insufficient to prosecute senior leaders of terrorist groups designated by the Council. United Nations Security Council.
The list includes Lashkar-e-Taiba, Jaish-e Mohammad, Al-Qaeda and the Taliban.
According to the document, the results suggest that the FATF gray list, from 2008 through 2019, may have resulted in cumulative real GDP losses of around $ 38 billion.
Moreover, estimates indicate that much of this response (58 percent) was motivated by reduced consumer spending (both household and government).
Exports and inward direct investment are also partly responsible for this decline in GDP, with associated cumulative losses of $ 4.5 billion and $ 3.6 billion respectively. These results highlight the significant negative consequences associated with the FATF gray list.
The estimates in this document highlight the significant negative implications of the FATF gray list for Pakistan, thus highlighting the need for policy makers to comply with the FATF when adopting AML / CFT legislation to avoid future economic losses. , he argued.
With the latest FATF action, Pakistan, even after “largely meeting” 26 of 27 targets, will remain on the gray list for at least a year and implement seven new parallel action points to address the its policy against money laundering and the fight against money laundering. the terrorist financing regime (LAB / CFT), The Dawn said in a report.
The watchdog said in a statement that since June 2018, when Pakistan made a high-level political commitment to work with the FATF and the APG to strengthen its AML / CFT regime and to address its strategic gaps in the fight against the financing of terrorism, the pursuit of the country’s policy of engagement has led to significant progress through a global CFT action plan.
The FATF acknowledges Pakistan’s progress and efforts to address these elements of the CFT Action Plan and notes that since February 2021, Islamabad has made progress in completing two of the remaining three action elements by demonstrating that effective, proportionate sanctions and deterrents are imposed for FT convictions and that the country’s targeted financial sanctions regime was being used effectively to target terrorist assets.
Pakistan has now completed 26 of the 27 actions of its 2018 action plan.
“The FATF encourages Pakistan to continue making progress in addressing the only remaining CFT element as soon as possible by demonstrating that TF investigations and prosecutions target senior leaders and commanders of designated terrorist groups. ‘UN.
The FATF said Pakistan should continue to work to address its strategic AML / CFT deficiencies, including by:
- Strengthen international cooperation by amending the law on mutual legal assistance
- Demonstrate that assistance is sought from foreign countries for the implementation of the designations of UNSCR 1373
- Demonstrate that supervisors perform both on-site and off-site supervision based on the specific risks associated with DNFBPs, including the application of appropriate sanctions if necessary
- Demonstrate that proportionate and dissuasive sanctions are applied consistently to all legal persons and arrangements for non-compliance with beneficial ownership requirements
- Demonstrate an increase in ML investigations and prosecutions and that proceeds of crime continue to be detained and confiscated in accordance with Pakistan’s risk profile, including working with foreign counterparts to trace, freeze and confiscate assets
- Demonstrate that DNFBPs are monitored to verify compliance with proliferation funding requirements and that penalties are imposed for non-compliance.
Jurisdictions under increased scrutiny are actively working with the FATF to address policy gaps in their anti-money laundering, terrorist financing and proliferation financing regimes.
When the FATF places a jurisdiction under heightened scrutiny, it means that the country is committed to promptly addressing the identified strategic gaps within the agreed timeframe and is subject to increased scrutiny.
This is often referred to externally as the “gray list”.
The FATF and FATF-like Regional Bodies (FSRBs) continue to work with the jurisdictions below as they report on progress to address their strategic gaps. The watchdog calls on these jurisdictions to complete their action plans as soon as possible and within the agreed timeframes.
The FATF welcomes their commitment and will closely monitor their progress.
It does not call for the application of enhanced due diligence measures to these jurisdictions, but encourages its members and all jurisdictions to take into account the information presented below in their risk analysis.
The FATF continually identifies other jurisdictions that have strategic gaps in their anti-money laundering, terrorist financing and proliferation financing regimes.
A number of jurisdictions have not yet been reviewed by the FATF or their FSRBs, but will be in due course.
In October 2020, the FATF decided to resume work, interrupted due to the Covid-19 pandemic, and to identify new countries with strategic AML / CFT gaps and to prioritize the review countries listed whose deadlines for action plan elements have expired or expired.
Albania, Barbados, Botswana, Cambodia, Cayman Islands, Ghana, Jamaica, Mauritius, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Uganda and Zimbabwe have seen their progress examined by the FATF since February 2021.
Upon review, the FATF now also identifies Haiti, Malta, the Philippines and South Sudan.