Pakistan government to set new rules to meet FATF requirements

• 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.
• 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 the 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.

What is FATF?

• The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog.
• The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society.
• As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
• With more than 200 countries and jurisdictions committed to implementing them.
• The FATF has developed the FATF Recommendations, or FATF Standards, which ensure a coordinated global response to prevent organised crime, corruption and terrorism.
• They help authorities go after the money of criminals dealing in illegal drugs, human trafficking and other crimes. The FATF also works to stop funding for weapons of mass destruction.
• The FATF reviews money laundering and terrorist financing techniques and continuously strengthens its standards to address new risks, such as the regulation of virtual assets, which have spread as cryptocurrencies gain popularity.
• The FATF monitors countries to ensure they implement the FATF Standards fully and effectively, and holds countries to account that do not comply.

Functions of 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 October 2001, the FATF expanded its mandate to incorporate efforts to combat terrorist financing, in addition to money laundering.
• In April 2012, it added efforts to counter the financing of proliferation of weapons of mass destruction.
• Since its inception, the FATF has operated under a fixed life-span, requiring a specific decision by its Ministers to continue. Three decades after its, creation, in April 2019, FATF Ministers adopted a new, open-ended mandate for the FATF.

Objectives of FATF

• The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
• FATF monitors countries' progress in implementing the FATF Recommendations; reviews money laundering and terrorist financing techniques and counter-measures; and, promotes the adoption and implementation of the FATF Recommendations globally.

UN Security Council Resolutions 1267 and 1373

• The UNSC resolution 1267 was adopted unanimously on October 15, 1999.
• It is a consolidated list of people and entities that UN has determined as being associated with Al Qaeda or the Taliban, and laws which must be passed within each member nation to implement the sanctions.
• The UNSC Resolution 1373 was adopted on 28th September 2001.
• It declares international terrorism a threat to international peace and security and imposes binding obligations on all UN member states.