Pakistan's National Assembly passes bill to curb money laundering and terror financing end FATF threat forever

Islamabad, Aug 4 (PTI) Pakistan's National Assembly has passed a bill, which will help the country avoid the Financial Action Task Force’s grey list forever if it is enforced and properly implemented.
     The lower house of Parliament passed the bill on Thursday that seeks to form a central authority to curb money laundering and terror financing, bringing all institutions related to the Financial Action Task Force (FATF) under one command.
     Last year, Pakistan was taken off the grey list of the Financial Action Task Force (FATF), the global watchdog on terror financing and money laundering, four years after the country was put in the infamous categorisation.
     The bill – the National Anti-Money Laundering and Counter Financing of Terrorism Authority Act, 2023 – was presented by Minister of State for Foreign Affairs Hina Rabbani Khar, who said that the proposed law would bring all institutions related to FATF under one authority, The Express Tribune newspaper reported on Friday.
     Currently, money laundering, financing of terrorism and targeted financial sanctions are enforced under different laws, mainly via the Anti-Money Laundering Act of 2010, the Anti-Terrorism Act of 1997 and the United Nations Security Council Act of 1948, the report said.
     Recalling when Pakistan was put on the Paris-based FATF's grey list, Khar said that the proposed authority would function as a focal institution and help the state give a unified response to curb the menace of money laundering and terror financing.
     "This is a good bill, and if it is enforced and properly implemented, then Inshallah [God willing] Pakistan never sees the FATF grey list again," Khar was quoted as saying in the report. She added that the proposed law would institutionalise different entities and greatly benefit Pakistan.
     Noting that Pakistan faced difficulties in three different arenas, namely anti-money laundering (AML), countering financing of terrorism (CFT) and targeted financial sanctions (TFL) when it was put on the FATF grey list, Khar hoped that the newly-passed bill would effectively address these issues.
     In 2018, the FATF found Pakistan's deficiencies in its legal, financial, regulatory, investigation, prosecution, judicial and non-government sectors to fight money laundering and combat terror financing, which are considered severe threats to the global financial system.
     According to the statement of objects and reasons, the bill's purpose is to have an overarching body to supervise and coordinate matters about AML, the CFT and the TFS, the report said. It added that to unify state response; there is a need for a focal institution, a sustainable and permanent authority with the required mandate to operate under the direct supervision of the prime minister.
     The ultimate objective of the authority would be to coordinate matters at the national level about anti-money laundering, countering the financing of terrorism and targeted financial sanctions, including proposing changes to the policy, laws, rules and regulations to bring them in compliance with the international requirements and best practices and to mitigate the risk of the money laundering and the terror financing most effectively and efficiently.
     The authority shall act as the focal point for the FATF and related international organisations and bodies and will liaise with the competent authorities and other national, and international organisations, bodies, and/or entities for facilitating cooperation in areas relating to the AML, the CFT and the TFS.
     Headed by a chairman to be appointed by the prime minister, the authority will include the finance, foreign affairs and interior division secretaries and the Governor of the State Bank of Pakistan.
     It will also include chairmen of Pakistan's Securities and Exchange Commission, the National Accountability Bureau and the Federal Board of Revenue, DGs of the anti-narcotics force and the financial monitoring unit, chief secretaries and any members recommended by the premier, the report said.
     The FATF is an inter-governmental body established in 1989 to combat money laundering, terror financing and other related threats to the integrity of the international financial system.

(This story has not been edited by THE WEEK and is auto-generated from PTI)