Pakistan and Nicaragua have been removed from the Financial Action Task Force (FATF) ‘grey list’ of jurisdictions under increased monitoring according to a statement issued at the end of the global financial watchdog’s plenary meetings in Paris last week.
Pakistan, which has been on the grey list since June 2018, has made significant improvements ahead of schedule to aspects of its anti-money laundering and counter financing of terrorism (AML/CFT) regime according to the statement.
But while Nicaragua has improved its AML/CFT regime sufficiently to be taken off the grey list, the FATF is clearly very concerned about the impact of Nicaragua’s AML/CFT regime on the non-profit sector.
Despite removing Nicaragua from the grey list, the FATF says it is “strongly concerned by the potential misapplication of the FATF standards resulting in the suppression of Nicaragua’s non-profit sector.”
Nicaragua has this year already declared around 2,000 non-profit organisations (NPOs) illegal. The NPOs are concerned with human rights, democracy, citizen participation, health and education and those that oppose the administration of longstanding President Daniel Ortega.
The FATF says Nicaragua, which returned to the grey list in February 2020 after leaving it 2015, must continue to work with the FATF of Latin America (GAFILAT) to make further improvements to its AML/CFT regime, including by ensuring its oversight of NPOs is risk-based and in line with the FATF standards.
Pakistan ahead of deadlines
The FATF says Pakistan has made “significant progress” in improving and strengthening the effectiveness of its AML/CFT regime and has addressed technical and strategic deficiencies identified by the task force. It says that the list of 34 action items it identified in June 2021 was completed in advance of the deadlines.
Pakistan is therefore no longer subject to the FATF’s increased monitoring process, but it will continue to work with the global watchdog’s Asia-Pacific Group to further improve its AML/CFT system.
Further details on the FATF’s decisions and actions regarding Pakistan and Nicaragua can be found, via links, at Outcomes FATF Plenary, 20-21 October 2022, which is available here.
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