THE simplification of reporting requirements for stakeholders in the real estate sector under a FATF action plan should address concerns of realtors, developers and builders, as well as help remove deficiencies from Pakistan’s AML/CFT regime that pertains to money laundering and terrorism financing. It will also tackle a key hurdle to full compliance with FATF’s plan for Pakistan to bring its AML/CFT regulations up to date.
More importantly, compliance with the benchmarks for Designated Non-Financial Business and Professions will move the country a step closer to its eventual removal from the so-called grey list. The global watchdog had included Pakistan in the list of countries with poor AML/CFT frameworks in June 2018. The country remains on the list despite meeting 26 of the 27 conditions listed in the action plan for curbing money laundering and terror financing on its soil. In June this year, the group gave an additional six-point agenda to Islamabad for strengthening its money laundering regulations.
There is no doubt that FATF is often used by global powers as a political tool to put pressure on countries like Pakistan and there are examples where the global watchdog has delisted other jurisdictions on its grey list although they did far less than what Islamabad has done to tighten control over flows of illicit money. Hence, the concern that the platform is being used against Pakistan by India is not entirely misplaced. Yet, it is good to note that Pakistan is using this opportunity to prove to the world that it is a responsible member of the global community in line with Islamabad’s stated position on plugging loopholes available to the corrupt and terrorists for money laundering or terror financing anywhere in the world.
There is no denying the fact that Pakistan’s economy and people will be the primary beneficiaries of a strong AML/CFT regime. The actions implemented have already resulted in a remittance bonanza for the economy. Meanwhile, compliance with the FBR’s reporting requirements for over 50,000 registered and unregistered real estate players will go a long way in documenting one of the largest segments of the economy and mobilising massive tax revenues from sellers and purchasers of property. The quicker Pakistan updates its AML/CFT regime the better it will be since its removal from the grey list will address the concerns of foreign investors and open up new trade opportunities at a time when the economy desperately needs to boost exports and attract private foreign investment.
Published in Dawn, September 2nd, 2021