The visiting team of the Asia Pacific Group (APG) arrived to assess Pakistan’s prevailing legal and institutional framework, and the government’s measures to curtail terrorism financing, on behalf of the Financial Action Task Force (FATF) early October, and the government was seen to be visibly nervous through the delegation’s assessment. Now the assessment has ended, as the nine-member delegation of global experts finalised a report envisaging a string of measures for de-listing Pakistan from the grey list of countries from September 2019.

Thus it appears that the sense of worry over Pakistan being black-listed will continue on to the September of next year. Some panic had been created in June of this year, when Pakistan was first placed in the grey-list, and the government was given three months to take measures to curb terror financing. Now it seems that those efforts must continue and double down.

The report, which is reportedly being called the “Exit Report” includes 40 recommendations which were segregated in 11 outcomes performance benchmarks.  It must be noted that the government did take some measures to curtail the menace of terror financing and Pakistan is said to be compliant in more than 50 per cent of the recommendations. However, it is not clear whether that effort would be sufficient for Pakistan to come out of the grey list.

Although the Asian Pacific Group’s report has not been made public yet, it would be helpful to grasp how the FATF assesses a country’s compliance and success in curtailing money laundering and terror financing.  It is extremely difficult, if not impossible, to measure the crimes of money laundering or terrorism financing directly; FATF tries to take the indirect route to measure the vulnerability of a country to these crimes by evaluating laws and their implementation. Pakistan passes the test of technical compliance, which is about reforming the legal and institutional framework, as we have seen by the recent amendments in the Anti Money Laundering and Countering of Terrorism Regulations 2018. Yet it seems that Pakistan proves unsatisfactory when it comes to structural arrangements for the effective implementation of these laws.

Upon the APG report, Finance Minister Asad Umar has reiterated the government’s commitment to implement the international standards and fight against money laundering and terrorism financing. It is hoped that the government takes structural measures to implement reforms until September- being blacklisted by the FATF after the year, apart from the economic consequences, could be internationally embarrassing.