The Asia Pacific Group (APG) has put Pakistan on the “Enhanced Follow-Up” category after releasing a Mutual Evaluation Report (MER) on Sunday. Experts say that the report appreciates Pakistan’s efforts as it made significant improvements in the fight against money laundering (ML) and terror financing (TF). But going through the detailed report suggests that without an all-out effort, Islamabad could not show compliance with the recommendations of the Financial Action Task Force (FATF). According to the MER, Pakistan is “non-compliant” on four out of 40 recommendations of the APG. That’s not inadequate progress, as many would say.

However, the report also says that the country is fully compliant on one aspect. The fact that the report suggests that the state showed partial compliance on 26 recommendations out of the 40 means that the government has yet to cover a lot to be in full compliance with the set international standards. But can Pakistan satisfy the international anti-graft body with its actions that it has taken so far?

Considering the MER’s finding that the country is partially compliant on 26 recommendations means that the outcome of FATF’s review meetings next week will not favour Islamabad. The possible outcome is that Pakistan will remain on the grey list until it shows further improvements in its technical standards on anti-money laundering and combating financing of terrorism (AML/CFT) system. If Pakistan does not show tangible actions against proscribed outfits and their leaderships, the country will find it hard to win the support of other countries in moving out of the FATF grey list. Thus, instead of becoming content with the MER, the government need to enhance further the capacity of its institution in understanding the ML and TF risks. Without waiting for the verdict of the FATF’s review meetings next week, the government needs to devise a multiagency effort to minimise the ML and TF risks. Such a strategy can only ensure Pakistan’s complete compliance with the FATF/APG recommendations.

Government institutions, i.e., the Federal Investigation Agency (FIA), Counter-Terrorism Departments (CTD) of the police forces, National Counter Terrorism Authority (NACTA), Home Departments, Interior Ministry, State Bank of Pakistan (SBP) and the Securities and Exchange Commission (SECP) need to work further closely. If they deliver on devising a framework that can minimise the risks of ML and TF to Pakistan, the FATF will only then show some relaxation. In short, the government and all the institutions mentioned above need to work more vigorously if they want Pakistan to get out of the grey list.