In a move that could impact Pakistan’s chances of getting off the FATF’s grey list, the United Kingdom (UK) on Sunday added the country to its list of 21 “high-risk countries” over money laundering and terror financing charges. The UK added Pakistan in ‘Amendment of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2021’ listing. The regulation came into effect on March 26.
Pakistan condemned the UK’s move to add it to the list. Foreign Office (FO) spokesperson Zahid Hafeez Chaudhri said the UK’s decision to include Pakistan in the list of ‘Money Laundering and Terrorist Financing High-Risk Countries’ was not based on facts and are “politically motivated”.
Hafeez Chaudhri hoped that the “UK would review its regulations in light of facts on the ground and avoid politically motivated and misplaced measures.”
The full list of high-risk third countries under Schedule 3ZA includes: Albania, Barbados, Botswana, Burkina Faso, Cambodia, Cayman Islands, Democratic People’s Republic of Korea, Ghana, Iran, Jamaica, Mauritius, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Senegal, Syria, Uganda, Yemen and Zimbabwe.
According to the UK government, the nations in this category pose a threat because of the weak tax controls and lack of check and balance on terrorism financing and money laundering.
The UK government’s “Money Laundering and Terrorist Financing (Amendment) (High-Risk Countries) Regulations 2021” came into effect as part of actions in a post-Brexit Britain where the country had to determine its ‘high-risk’ nations.
Earlier the list was determined by the European Union (EU) under the 4th Anti-Money Laundering Directive.
The UK now has its own list after the definition of a high-risk third country identified in a new Schedule 3ZA, which came into force on March 26, with Pakistan featuring in it.
Pakistan’s Foreign Office spokesperson tried to explain the actions taken by Islamabad and why the country should not be on the list. He said, “Pakistan has a robust AML [anti-money laundering]/CFT [combating the financing of terrorism] regime in place.”
He added that Pakistan has taken “unprecedented measures through a series of legislative, institutional and administrative actions in the domain of anti-money laundering and countering the financing of terrorism.”
Pakistan has been on the FATF’s grey list for deficiencies in its counter-terror financing and anti-money laundering regimes since June 2018.
In the past plenary session of the FATF, the international financial watchdog decided to keep Pakistan on the grey list since it had only complied with 24 of the 27 parameters set for the country as part of its action plan to get off the list.