Pakistan, keen to exit from the grey list of the FATF, is set to introduce new rules relating to anti-money laundering cases and change the prosecution process to meet its remaining tough conditions, a media report said on Monday.
Pakistan was put on the grey list by the Paris-based Financial Action Task Force (FATF), the global watchdog for money laundering and terror financing in June 2018 and the country has been struggling to come out of it.
The Dawn newspaper reported that the changes being made also include the transfer of investigations and prosecution of anti-money laundering (AML) cases from police, provincial anti-corruption establishments (ACEs) and other similar agencies to specialised agencies.
This is part of two sets of rules including the AML (Forfeited Properties Management) Rules 2021 and the AML (Referral) Rules 2021 under the National Policy Statement on Follow the Money approved by the federal Cabinet meeting a few days ago, the report said.
These rules and related notifications for certain changes in the existing schedule of Anti-Money Laundering Act 2010 (AMLA) would come into force immediately to be followed by the appointment of administrators and special public prosecutors for implementation.
Based on these measures, the FATF would conclude if Pakistan has complied with three outstanding benchmarks, out of 27, that blocked its exit from the grey list in February this year.
Several review meetings of the FATF are scheduled to begin in the second week of June, culminating in the next FATF plenary on June 21-25.
The three outstanding action points (out of a total of 27) include (i) demonstrating that terrorist financing (TF) investigations and prosecutions target persons and entities acting on behalf or at the directive of the designated persons or entities.
Demonstrating that TF prosecutions result in effective, proportionate, and dissuasive sanctions; and (iii) demonstrating effective implementation of targeted financial sanctions against all designated terrorists, particularly those acting for them or on their behalf.
Now, the government has decided to appoint dozens of administrators with the powers to confiscate, receive, manage, rent out, auction, transfer or dispose of or take all other measures to preserve the value of the properties and perishable or non-perishable assets to be confiscated under the AML 2010 rules or court orders.
The AML (Forfeited Properties Management) Rules 2021 specify how the inventories would be measured, described or defined, protected, and evaluated for auction and how to complete all processes, the report said.
The Anti-Money Laundering (Referral) Rules, 2021 are being introduced to enable transfer of the cases from one set of investigation agencies to another.
The Cabinet was explained that based on the outcomes of the mutual evaluation, Pakistan was placed by Asia Pacific Group (APG) in the (Expedited) Enhanced Follow Up process which requires the country to submit its follow up report almost every quarter to the APG to provide it with an update on the progress made.
These follow up reports (FURs) provide Pakistan a chance to request an upgrade in ratings of recommendations which have been earlier rated as ‘partially compliant' and ‘non-compliant' and where subsequently significant progress has since been made.
So far, Pakistan has submitted three FURs in February and October 2020 and February 2021. Of these FURs, only one report had been adopted by the APG in which Pakistan was re-rated in Recommendation No 29 (Financial Intelligence Unit) from ‘partially compliant' to ‘compliant'.
In the remaining two FURs, Pakistan had requested for re-rating in 27 recommendations, analysis of which is being conducted by the APG and the same will be adopted within this month.
Pakistan also has to issue a “National Policy Statement on Follow the Money (NPSFM)”, the report said.
Because of this statement and rules, Pakistan's compliance with FATF recommendations in Post Observation Period Report (POPR) would further improve with corresponding enhancement in the ratings or effectiveness of the FATF's relevant Immediate Outcomes, it said.
Pakistan's POPR would be reviewed by the FATF's Asia-Pacific Joint Group (A-PJG), and based on the report of this group, the FATF would decide further course of action on Pakistan's progress on the POPR in its plenary scheduled during June 21-25, it added.