The Covid-19 breakout and its impact on Pakistan is obvious. After an emergency scenario developed in the country, federal and provincial governments pulled up their socks and took measures deemed necessary. Despite taking all these steps and managing the crisis, Pakistan must keep its eyes open for any future development, especially with regards to the assessment of FATF that is going to take place in September, 2020.

It is important to keep highlighting Pakistan’s long quest for fighting against suspicious monetary transactions. Over the past one decade in particular, Pakistan has taken measures which were necessary to keep a strict check on money laundering mechanisms in the country. For example, enacting the Anti-Money Laundering Act, dubbed the AML Act 2010, was the first concrete step taken by Pakistan. Addressing all three stages of money laundering sufficiently, beginning from “placement” in banks to “layering” and “integration” into a wider financial market, this Act was considered a milestone for our legislative bodies. The act enabled the ministry of finance to set up a Financial Monitoring Unit (FMU) housed within the premises of the State Bank of Pakistan (SBP). The FMU is mandated to receive, analyse and disseminate Suspicious Transaction Reports (SRTs) and Currency Transaction Reports (CTRs) and, in case of finding any suspicious activity, the body may immediately generate Suspicious Activity Reports (SARs) which are sent to four federal agencies: NAB, ANF, DG II of FBR and FIA. Accuracy and comprehensiveness of AML Act 2010 can be gauged from the fact that the Act includes different offences previously mentioned in six different Acts, making it a more encompassing legislative measure. Recently, the Finance Bill 2018 and other similar legislations also helped Pakistan curb and contain money laundering under mutual assistance agreements with OECD and other countries.

Here comes in FATF, its watchlist of 2012-2015 and a subsequent referring to a peer group: Asia Pacific Group (APG) to work on improvement of Pakistan’s AMP/CFT regime. Through strategic assistance of the APG, Pakistan came out of the grey list in 2015 which was globally acknowledged. However, Pakistan was again added to the grey list of the task force and since then, it has been provided with four extensions, the latest of which will end in September this year. And before that, a statement coming out of the task force with regards to the misuse of the financial environment by proscribed organisations in countries on the watchlist might be ringing bells in some quarters of Pakistan as evident from the statement given by Mr Hafeez Shaikh on a news channel.

It is important to mention here Pakistan’s overall current economic condition, where our current account deficit stands at 6-7% of the GDP and our manufacturing industry is already facing negative growth rate with a decline rate of 3.4% in the first seven months of 2019-2020. The agriculture sector has witnessed a 10% fall in cotton output; the transportation sector has seen a decline of 11% in the consumption of diesel; export orders have been cancelled; and this is just a brief outlook of our economic conditions amid the Covid-19 crisis. This will largely impact our growth rate, which may remain to 1.5% for the fiscal year 2019-20. Although, the IMF may inject a loan package of $1.4 billion in Pakistan to fight the crisis but the severe impact on the already weak economic conditions may not be mitigated with these measures.

Our neighbour, India is already facing a humanitarian crisis where daily wagers and people living below the poverty line are already on the streets and roads, resulting in a horrific crisis for the country. Pakistan has not yet witnessed the panic for many reasons; the most prominent one was mentioned in the much talked about BBC article written by Ayesha Imtiaz in which she underscored the network of philanthropic individuals and organisations who are keeping things under control for the federal and provincial governments through their efforts.

Can this panic situation be exploited by proscribed organisations? The answer is no. Amidst the Covid-19 outbreak, the statement of FATF regarding proscribed organisations taking advantage of any situation for their own gains is a timely reminder to many countries. But at the same time, it is pertinent to mention that Pakistan’s philanthropic activities do not rely on any proscribed organisation. The stringent measures and efforts taken by Pakistan over the past one decade are now showing promising results. Amid this crisis, Pakistan and its institutions are not oblivious of the fact that any individual or group of people linked currently or previously to any banned outfit may not take advantage of the situation and get away with it. Rather, it is noteworthy to state that most of the leaders of such proscribed organisations within Pakistan are either detained or convicted. The network on ground has been severely damaged and no footprint can now be found where they can potentially become a nuisance for the state of Pakistan in the future. A notification by LEAs was also circulated among all concerned quarters, bodies and agencies to keep a close watch and monitor the activities of these people and POs to avoid any unwanted and awkward situation in future for the country.

Pakistan seems vigilant in its war on money-laundering, but it is also true that we must keep our guards up from all sides to avert any aggressive diplomatic and political lobbying by any neighbouring country to further its geo-political agenda. The time has come to keep repeating and highlighting the measures taken by us reflecting our preparedness to deal with the menace of money laundering and terror financing.