Pakistan Strategy_FATF_Slow to acknowledge progress, (AKD Daily, Jun 28, 2021)
AKD Daily
Pakistan Strategy: FATF - Slow to acknowledge progress
- Amidst the usual acknowledgment by FATF on the unprecedented progress by Pakistani authorities to elevate themselves from FATF’s list of jurisdiction under increased monitoring (more commonly referred to as ’grey list’) , the global ML and terrorist financing watchdog has surprised, imposing a new set of action plan over the ongoing plan.
- Under the current plan, Pakistan has achieved compliance on 26 counts out of 27 action items (vs. 24/21/14/5 in Feb’21/ Oct’20/Feb’20/Oct’19). However, the new plan added by the body puts at rest expectation of Pakistan exiting grey list in the near term.
- As per the consolidated assessment rating (conducted by APG) which measures effectiveness and technical compliance, Pakistan has showcased low/moderate level of effectiveness while remains non-compliant on two accounts and partially compliant on seven accounts on FATF’s technical scale. We see low compliance on these standards to have contributed in the body continuing to place Pakistan under increased monitoring.
- While FATF’s outcome has been disappointing on various accounts, its potential writing with regards to potential measures which the authorities need to undertake to remain in the IMF program could keep market jittery in the near term.
- With long term fundamentals remaining intact, we see any correction as an opportunity to accumulate. We continue to have preference for thematic plays such as Cements, Steel and Construction-allied while Refineries should be accumulated on upcoming policy impact.
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