September 8, 2021 (MLN): Pakistan has made significant progress in addressing the technical compliance deficiencies identified earlier in its Mutual Evaluation Report (MER).
All in all, Pakistan is now compliant or largely compliant with 35 out of 40 FATF recommendations on the effectiveness of anti-money laundering and combating financing terror (AML/CFT) system, the third follow-up MER of the Asia Pacific Group (APG) says.
Going by the details, Pakistan requested re-ratings for the Recommendation 10, 18, 26 and 34, which were rated partially compliant (PC) in the MER. As a result of this progress, Pakistan has been re-rated to Compliant on Recommendation 10, and to Largely Compliant on Recommendation 18, 26 and 34.
With regards to Recommendation 10, the report mentioned that Pakistan has introduced comprehensive AML/CFT obligations for CDNS and the entities that provide the financial activities previously provided by Pakistan Post are subject to the same AML/CFT obligations as other SBP and SECP regulated persons. MFBs and ECs are also now subject to the same AML/CFT obligations as other SBP regulated persons, the report added.
Since the MER Pakistan has addressed the deficiencies with compliance programs against AML/CFT having regard to the ML/TF risk and the size of the business. Pakistan has also addressed deficiencies with respect to the employee screening requirements for banks and DFIs with new 9 provisions in SBP and SECP Regulations. As a result, recommendation 18 is re-rated Largely Compliant.
Pakistan will remain on enhanced follow-up, and will continue to report back to the APG on progress to strengthen its implementation of AML/CFT measures, the report said.
To note, Pakistan’s fourth progress report is due on February 1, 2022.
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