Pakistan races to avoid the FATF blacklist

On Wednesday, Pakistan’s parliament approved an anti-money laundering legislation, which was a key demand from the global watchdog, Financial Action Task Force (FATF), to remove the South Asian nuclear state from its gray list. Despite having lower numbers in the joint session of the parliament and facing a vociferous protest by the opposition members, the government managed to pass three bills.

Apart from the three FATF-related laws — the Anti-Money Laundering (Second Amendment) Bill, 2020; the Islamabad Capital Territory Waqf Properties Bill, 2020; and the Anti-Terrorism (Third Amendment) Bill 2020 — five others bills were also passed during the joint session of the parliament.
Previously, the bills were accepted by the lower house of parliament — National Assembly — but rejected by the upper house, Senate, where opposition members are in majority, forcing the government to call a joint session of both the houses for decisive voting in accordance with the Constitution.

The bills were successfully passed by a majority of 200–190 votes. Although, the opposition has 20 more members than the government, however, 30 of them remained absent from the session, giving the treasury an edge.
As per the Anti-Terrorism Act (Amendment) Bill, 2020, the investigating officer, can perform covert operations to spot terrorism funding, track communications, and computer system by incorporating the latest technologies in 2 months.

Farogh Naseem, the Federal Law Minister, confirmed that following the joint session, Pakistan had “completed all FATF-related legislation before the deadline”. All the amendments proposed by the opposition, which termed the legislation “arbitrary”, were also rejected. The opposition later walked out of the session after Speaker Asad Qaisar refused to permit the Opposition Leader Shehbaz Sharif, and other opposition members to speak. Prime Minister, Imran Khan, congratulated the nation over the acceptance of the new legislation. He is hopeful that it would help remove Pakistan from the FATF’s gray list after an evaluation of the country’s financial system and security mechanism.

Pakistan was placed on the FATF grey list in June 2018 and was asked to make improvements by the end of 2019 but later extended the deadline because of the COVID-19 outbreak and delay on the country’s part to meet the requirements. The South Asian nuclear nation has since twice escaped being placed on the watchdog’s financial crime blacklist with the support of Turkey, China, and Malaysia. As per the FATF charter, a country must have the support of at least three member states to avoid blacklisting.

In recent months, Islamabad has taken some major steps under the plan, including which the country will not allow foreign currency transactions without a national tax number and stop currency changes of up to $500 in the open currency market without the submission of the copies of the identification documents of both the sides.

Additionally, Pakistan has also interdicted several militant groups and seized their assets, including Jamaat ud Dawah, and Jaish-e-Mohammad — the groups blamed for several terrorist attacks such as the 2009 deadly Mumbai attacks killing over 150 people. This development is widely seen as an attempt to seek the approval of the FATF members.