EU removes Pakistan from list of high risk third countries

March 29, 2023 (MLN): The European Union (EU) authorities have removed Pakistan from the 'List of High-Risk Third Countries' which has strategic deficiencies in the Anti Money Laundering / Countering the Financing of Terrorism (AML/CFT) regime that pose a significant threat to their financial system, the press statement issued from the office of Federal Minister Commerce revealed today. 

According to the Delegated Regulation, “Following the measures implemented to address the action plans agreed with the FATF, Nicaragua, Pakistan and Zimbabwe have remedied the strategic deficiencies in their respective AML/CFT regimes and no longer pose a significant AML/CFT threat to the international financial system."

Taking into account their relevance under the revised methodology, the Commission considers that these jurisdictions no longer have strategic deficiencies in their respective AML/CFT frameworks and do not pose a significant threat to the financial system of the European Union, the statement added.

As a consequence of the said measure, the “Obligated Entities” in EU member states would no longer be required to apply “Enhanced Customer Due Diligence” while dealing with individuals and legal entities established in Pakistan.

The “Obligated Entities” include credit institutions, financial institutions, and the following natural or legal persons acting in the exercise of their professional activities.

It may be recalled that Pakistan was included in the List of High Risk Countries on 22nd October 2018 by the EU, the statement further added.

The placement of Pakistan in the list had created an undue regulatory burden on “Obligated Entities” in the EU and there were instances whereby some of them had refused to entertain legal and financial transactions with individuals and entities based in Pakistan. 

The new development would add to the comfort level of the European economic operators and is likely to ease the cost and time of legal and financial transactions by Pakistani entities and individuals in the EU.

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