A report by the Asia Pacific Group on Money Laundering, the regional body of the Financial Action Task Force (FATF), claims that Pakistan has failed to fully implement a UN Security Council resolution against several UN-designated terrorists and terrorist organisations.
"With the exception of some recent actions discussed in detail below, Pakistan has not taken sufficient measures to fully implement UNSCR 1267 obligations against all listed individuals and entities – especially those associated with Lashkar-eTayyiba (LeT)/Jamaat-ud-Dawa (JuD), and Falah-i-Insaniat Foundation (FIF) as well as the groups' leader Hafiz Saeed," said the report.
The report further said, Pakistan has limited mitigating measures for legal persons, and there is no supervisory oversight for Anti-Money Laundering and Countering the Financing of Terrorism purposes. There are no measures in place to address the money laundering and terror funding risks posed by trusts, including foreign trusts, and waqfs in Pakistan.
The group said in its report that Pakistan's National Risk Assessment lacks comprehensive analysis.
"Competent authorities have varying levels of understanding of the country's ML (money laundering) and TF (terror financing) risks, and the private sector has a mixed understanding of risks… Pakistan's ability to share beneficial ownership information is severely limited".
The report comes a week before the agency is set to decide whether or not to keep Pakistan on an "enhanced blacklist" in which it had been included in August, after being found non-complaint in 32 of the 40 compliance parametres.
New Delhi has been campaigning to put Islamabad on the "blacklist" after the Pakistan-based Jaish-e Mohammad reportedly claimed responsibility for the deadly suicide attack on a convoy of troops in Pulwama, in Jammu and Kashmir on 14 February killing 40 Indian soldiers.
The grey-list is a warning given to a country to curb money laundering and terror financing. If Pakistan is put on the blacklist, it could face economic sanctions from international financial organisations and countries. It could also impact Islamabad's international trade.