Money Laundering Current Affairs - 2020

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FATF report on money laundering: slams Pakistan for terror funding

The Asia – Pacific Group of FATF (Financial Action Task Force) slammed Pakistan as the later failed to take actions against terror groups. On 5th October, 2019, the group published report on Money Laundering and terror financing in Pakistan.

Key statements of the report

  • The watchdog reported that Pakistan failed to implement the UNSC (United Nations Security Council) resolution against Hafiz Saeed, JeM – Jaish – e – Mohammed, LeT – Lashkar – e – Taiba.
  • The report disagreed Pakistan’s self – assessment that it only faces ‘medium’ category risks.
  • It also said that the key banking institutions in the country like the Securities and Exchange Commission of Pakistan and State Bank of Pakistan had very limited or no understanding of the terror financing regimes of the country.
  • The report alerted Pakistan that it could be black listed alongside North Korea and Iran unless it takes actions against the UN – designated terrorists in its soil

FATF

FATF is the Finacial Action Task Force. It is an inter – governmental body that was established in 1989. The main objective of the organization is to set standard and promote implementation of legal regulatory measures for money laundering and terror financing. It issued a series of recommendations as international standard to combat money laundering. It now forms the base for coordinated response to threats faced by financial systems

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Pakistan blacklisted by Asia-Pacific Group of FATF

The Asia Pacific Group (APG) of the Financial Action Task Force (FATF) has put Pakistan in Enhanced Expedited Follow Up List (Blacklist) for its failure to meet its standards. Decision in this regard was taken at FATF APG plenary meeting held in Canberra, Australia.

Reasons for blacklisting: FATF APG has found that Pakistan was non-compliant on 32 of 40 compliance parameters of terror financing and money laundering. On 11 effectiveness parameters of terror financing and money laundering, Pakistan was adjudged as low on 10. Moreover, Pakistan was not able to convince 41-member plenary to upgrade it on any parameter.

About Asia Pacific Group (APG)

It is Financial Action Task Force (FATF)-style regional body for Asia-Pacific region to develop policies to combat money laundering and terror financing. It is inter-governmental organisation founded in 1997 in Bangkok, Thailand.

Members: It consists of 41 member jurisdictions as its members. It also has number of observer jurisdictions and international/regional observer organisations.

Mandate: It is focused on ensuring that its members effectively implement international standards against money laundering, terrorist financing and proliferation financing related to weapons of mass destruction (WMDs).

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