Context:

Noting that Pakistan’s measures against money laundering and terror financing “is not yet sufficient to justify a re-rating”, a regional affiliate of the Financial Action Task Force retained the country on its ‘’Enhanced Follow-up’’ list.

Enhanced follow-up list

• Enhanced follow-up’’ is an intensive process of correction that deals with members with significant deficiencies (for technical compliance or effectiveness) in their AML/CFT systems.
• While Pakistan was found to be “partially compliant” on 25 of 40 recommendations, it was found to be “non-compliant” on four, “largely compliant” on nine parameters, and “fully compliant” on one.

About FATF

• The Financial Action Task Force (FATF) was established in July 1989 by a Group of Seven (G-7) Summit in Paris, initially to examine and develop measures to combat money laundering.
• In 2001, the FATF expanded its mandate to incorporate efforts to combat terrorist financing, in addition to money laundering.
• In 2012, it added efforts to counter the financing of the proliferation of weapons of mass destruction.
• Three decades after its, creation, in April 2019, FATF Ministers adopted a new, open-ended mandate for the FATF.

FATF has two types of lists:

• Black List: Countries that are supporting terror funding and money laundering activities are placed on the Blacklist.
• Gray List: Those countries which are not considered as the safe heaven for supporting terror funding and money laundering; included in this list. The inclusion in this list is not as severe as blacklisted.