ISLAMABAD — A global money laundering and terrorism financing monitor Friday removed Pakistan from a list of countries under the “increased monitoring” process after four years for addressing its “strategic deficiencies” to combat the crimes.

The president of the Financial Action Task Force (FATF) made the announcement after a meeting at its headquarters in Paris, boosting the reputation of the South Asian nation which is struggling to deal with a troubled economy, ravaged by this year’s catastrophic floods, and a balance-of-payment crisis.

“Pakistan has made significant improvements to strengthen the effectiveness of its framework for combating terrorist financing … as well as asset confiscation outcomes and [the] investigation and prosecuting [of] money laundering,” T. Raja Kumar told reporters in the French capital.

“So, because of all of this collectively, FATF has decided at its Plenary to remove Pakistan from increased monitoring, the so-called gray list,” Kumar said.

Pakistan was added to the list in 2018 due to strategic deficiencies FATF had identified in the country’s anti-money laundering and counterterrorist financing systems, giving Islamabad a wide-ranging reforms program to strengthen them.

Kumar praised Pakistan for successfully completing a mutually agreed action plan, adding, “there is high-level commitment and capacity to sustain” the reforms, which he said “are good for the stability and security of the country and indeed the region.”

Pakistani Prime Minister Shehbaz Sharif welcomed Friday’s decision by the global monitor.

“Pakistan exiting the FATF grey list is a vindication of our determined and sustained efforts over the years. I would like to congratulate our civil & military leadership as well as all institutions whose hard work led to today’s success,” Sharif wrote on Twitter.

The reforms FATF had outlined for Pakistan were largely implemented under former Prime Minister Imran Khan’s government, which took office in August 2018 shortly after the country was placed on the gray list.

Khan was removed from power in a parliamentary no-confidence vote in April, enabling the then-opposition leader Sharif to replace him as the prime minister of a coalition government.

Two large Pakistani banks, Habib Bank Limited (HBL) and National Bank of Pakistan (NBP), paid $225 million in 2017 and $55 million in 2022 respectively in fines imposed by regulators in the United States for compliance failures and anti-money laundering violations.

FATF is comprised of 37 countries and two regional organizations, as well as a global network of international partners, including the United Nations, the International Monetary Fund and the World Bank.

The global monitor can call on international financial institutions to close their activities in, and association with, offending countries and push governments to apply financial sanctions if the country is downgraded from increased monitoring to the “high-risk” group, down to the FATF “blacklist.”

Source: Voice of America