UK puts Pakistan on High-Risk list for Terror Financing ## टेरर फाइनेंसिंग के लिए ब्रिटेन पाकिस्तान को हाई-रिस्क लिस्ट में रखा है ##
WHAT HAS HAPPENED?
The UK government has added Pakistan to the list of undesirable 21 high-risk countries with unsatisfactory money laundering and terrorist financing controls.
21 COUNTRIES LIST
This list of 21 countries- released by the UK Government replicates the list of countries named by the Financial Action Task Force (FATF) as high-risk or under increased monitoring.
Pakistan shares the list at number 15 with conflict-ridden countries such as Syria, Uganda, Yemen and Zimbabwe.
The full list of high-risk third countries under Schedule 3ZA includes, in order:
Albania, Barbados, Botswana, Burkina Faso, Cambodia, Cayman Islands, Demoeratie People's Republic of Korea, Ghana, Iran, Jamaica, Mauritius,
Morocco, Myanmar, Nicaragua, Pakistan, Panama, Senegal, Syria, Uganda, Yemen and Zimbabwe.
WHAT THIS LIST REPRESENT?
According to the UK government, the nations in this category pose a threat,
Because of weak tax controls and lack of check and balance on terrorism-financing and money-laundering.
The UK government's "Money Laundering and Terrorist Financing (Amendment) (High-Risk Countries) Regulations 2021" has come into force from March 26, 2021.
BUT WHY UK RELEASES THIS LUST?
The list has been released as part of post-Brexit developments. Until the end of the Brexit transition period, the list of high-risk countries was determined by the European Union (EU) under the 4th Anti-Money Laundering Directive Now the UK has its own standalone list with Pakistan featuring in it. The UK government said the new list of high-risk third countries has been issued for the purposes of enhanced customer due diligence requirements
BUT WHY PAKISTAN IN THIS LIST?
In December 2020, a British government report revealed that dirty money continues to flow unhindered from Pakistan into the UK and vice versa. The "National risk assessment of money laundering and terrorist financing 2020" report said,
"Corrupt foreign elites continue to be attracted to the UK property market, especially in London, to disguise
corruption proceeds".
PAKISTAN-UK TIES
About Pakistan, the report said the UK continues to have close economic links to Pakistan, including significant remittance flows between both jurisdictions, Which according to estimates equated to approximately $1.7 billion in 2017.
The report notes that these economic and cultural ties "also enable and disguise illicit funds to be transferred between the UK and Pakistan, including through illegal informal value transfers".
The report said: "Criminals continue to purchase high value assets, such as real estate, precious gems and jewelry to
launder ilicit funds which are transferred from Pakistan to the UK and vice versa." This includes proceeds from corruption and drug trafficking. The risk from cash-based money laundering from the UK to Pakistan via smuggled cash and Money Service Business (MSBs) also persists."
IMPACT ON FATE
Pakistan has been on the FATF's grey list for deficiencies in its counter- terror financing and anti-money laundering regimes since June 2018.
In the past plenary session of the FATF, the international financial watchdog decided to keep Pakistan on the grey list, Since it had only compied with 24 of the 27 parameters set for the country as part of its action plan to get off the list. UK's move could impact Pakistan's chances of getting off the FATF's grey list.
Pakistan condemned the UK's move to add it to the list. Foreign Office (FO) spokesperson Zahid Hafeez Chaudhri said, The UK's decision to include Pakistan in the list of 'Money
Laundering and Terrorist Financing High-Risk Countries was not based on facts and are "politically motivated"
Hafeez Chaudhri hoped that the "UK would review its regulations in light of facts on the ground and avoid politically motivated and misplaced measures."
Chaudhry said in a statement that "Pakistan has a robust AML [anti-money launderingl/CFT [combatting the financing of terrorism] regime in place." The statement added that over the last two years, Pakistan has taken "unprecedented measures through a series of legislative, institutional and administrative actions in the domain of anti-money laundering and countering
financing of terrorism."
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