France September 7 2021: Pakistan has 35 Recommendations rated Compliant or largely Compliant, as per report published by Asia Pacific Group (APG). The report further stated that Pakistan will remain on enhanced follow-up, and will continue to report back to the APG on progress to strengthen its implementation of Anti Money Laundering (AML) / Combating the Financing of Terrorism (CFT) measures. Pakistan’s fourth progress report is due 1 February 2022.
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Pakistan has made good progress in addressing the technical compliance deficiencies identified in its MER and has been re-rated on R.10, R.18, R.26 and R.34. Recommendation 10 has been re-rated to Compliant, and R.18, R.26 and R.34 to Largely Compliant.
Overall, in light of the progress made by Pakistan since its MER was adopted, its technical compliance with the FATF Recommendations as follows as of the reporting date February 2021.
In keeping with the APG Mutual Evaluation Procedures, this FUR considers progress made up until 1 February 2021. In line with the FATF Methodology, the review team analysis has considered the entirety (all criteria) of each Recommendation under review, noting that this is cursory where the legal, institutional or operational framework is unchanged since the MER or previous FUR.
Pakistan requested re-ratings of on four Recommendations which were rated Partially Compliant (PC) in the MER.
The APG welcomes the steps that Pakistan has taken to improve its technical compliance with R.10, R.18, R.26 and R.34. As a result of this progress, Pakistan has been re-rated to Compliant on R.10, and to Largely Compliant on R.18, R.26 and R.34.
The September 2020 amendments to the Anti Money Laundering Act 2010 (AMLA) establish the framework for CDNS to be subjected to AML/CFT obligations. The National Savings (AML/CFT) Supervisory Board for National Savings Schemes (the CDNS Supervisory Board) has been named as the AML/CFT Regulatory Authority for CDNS (Schedule IV of the AMLA).
The National Savings AML and CFT Supervisory Board (Powers and Functions) Rules2020 (the National Savings Rules) establish the powers and functions of the CDNS Supervisory Board, which include the licensing and registration of REs; the ability to issues regulations, directions and guidelines; monitoring and supervising REs; and, imposing sanctions for non-compliance with AML/CFT obligations. The Supervisory Board has issued National Savings (AML and CFT) Regulations that are applicable to CDNS.
With respect to the insurance business operated by Pakistan Post, a new entity, Postal Life Insurance Company Limited (PLICL) has been established (incorporated in March 2020), and is licensed, registered, regulated and supervised by SECP. The transfer of Pakistan Post’s insurance operations to PLICL was completed on 5 April 2021.
With respect to the other financial services previously offered by Pakistan Post, In June 2020 Pakistan Post entered into an agreement with a commercial bank (Habib Bank Ltd (HBL)) for HBL to acquire and manage Pakistan Posts’ banking business. HBL is licensed, regulated and supervised by SBP. As a result, Pakistan Post is now a branchless banking super-agent for HBL, in accordance with SBP’s Branchless Banking Regulations. Legacy accounts are being either transferred to HBL’s platform, transferred to CDNS or paid out, depending on balances and other factors.
As part of this new framework, Pakistan Post established an AML/CFT Supervisory Board in October 2020, which issued AML/CFT Regulations for Pakistan Post. The purpose of the Supervisory Board is to provide a temporary supervision mechanism for the remaining services provided by Pakistan Post during the transition period for the transfer of the insurance and banking businesses. The transfer of the banking business banking business is expected to be complete by January 2022.