Pakistan Tightens Screws On 100+ Madrassas To Evade FATF Blacklist

Pakistan has intimated the Financial Action Task Force (FATF) that the Islamabad government has taken over the administrative control of 113 madrassas. Pakistan has been placed under the grey-list by FATF for terror financing and money laundering.

These madrassas are now running under the supervision of assistant commissioners and have been allocated a two-year budget, according to a compliance report sent by Islamabad to the FATF. The report carries Pakistan’s response to the 22 remaining points in the FATF action plan.

The FATF will hold a meeting in Beijing instead of Sydney, Australia on January 21 and then decide in the first week of February about whether Pakistan would remain on the grey list or not. The compliance report was prepared by the ministries of foreign affairs, interior, and finance, the Securities and Exchange Commission of Pakistan and the Financial Monitoring Unit.
Earlier in October, the FATF president had acknowledged that Pakistan had made some “tangible progress” under its new government and the global body welcomed it. However, he pointed out that the majority of the issues under the action plan still remained outstanding including effective measures to prevent terror financing.

In a statement, the FATF underlined that since June 2018, Pakistan had made progress towards improving its anti-money laundering/combating financing of terrorism (AML/CFT) regime, including the recent development of its money laundering/terror financing (ML/TF) risk assessment.

The FATF said Pakistan should continue working on implementing its action plan to address its strategic deficiencies, including by adequately demonstrating its proper understanding of the terror-financing risks posed by the terrorist groups, and conducting supervision on a risk-sensitive basis.

Pakistan should also demonstrate that remedial actions and sanctions are applied in cases of AML/CFT violations and that these actions had an effect on AML/CFT compliance by financial institutions.