KARACHI: Following Pakistan’s removal from the Financial Action Task Force’s (FATF) grey list, a global organisation of banking supervisory authorities praised the country’s improvement in the regulation of its overall financial affairs, resulting in a modest reduction in the country’s risk score.
Experts feel that the recently-released Basel AML [anti-money laundering] Index report on Pakistan would have little impact on the country’s economy in light of the wider difficulties that have “overshadowed” its regulatory development.
“Pakistan’s Basel AML Index (Public Edition) ML/TF [money laundering and terrorist financing] risk score is 6.16. Compared to other global jurisdictions, this places it in the category of moderate risk. According to the Basel AML Index briefing on Pakistan, the risk score in the most recent edition of the Expert Edition, which is updated quarterly with the most recent data, is somewhat lower at 6.11 than it was in the previous release.
Pakistan underwent four follow-up reports between 2018 and 2022 and improved its technical compliance performance from 41% to 72%. Pakistan is now rated as “mostly compliant” with the majority of the FATF’s 40 recommendations. Pakistan is only partially compatible with R15 (new technologies) and R38 (mutual legal assistance: freezing and seizure).
In accordance with global best practises, Pakistan’s regulatory environment has become more stringent over time. Even though there are still many concerns, we’ve seen significant improvement on AML and associated issues,” said Topline Securities’ Mohamed Sohail.
Sana Tawfik of Arif Habib Ltd. stated, “That sounds nice in the sense that it recognises the efforts done for FATF compliance.” “But, I do not believe it to be significant in light of all the other noise associated with our political instability or our rating by international credit agencies. I do not believe it would benefit any sector of our economy, despite the fact that our risk score has decreased slightly in the most recent evaluation.
“While we have progressed over the years, we are still far behind in global rankings,” said Haris Ali, an IT professional who provides commercial organisations with FATF-compliant technology-based services.
