National Financial Action Task Force Secretariat Pakistan finalizes 3rd National Risk Assessment 2023 for DNFBPS, LLPS & WTC

ISLAMABAD, Feb 20 (SABAH): National Financial Action Task Force (FTAF) Secretariat Pakistan has finalized 3rd National Risk Assessment 2023 for Designated Non-Financial Businesses and Professions (DNFBPS), Legal Persons & Limited Liability Partnership (LLPS) and Waqf, Trusts & Cooperatives (WTC).

Money Laundering (ML) is a cognizable offence under the Anti-Money Laundering Act (AMLA) 2010, for completion of the assessment of ML Threats, 23 major predicate offences were empirically examined in line with FATF methodology. According to FATF predicate offences refer to crimes that illegally generate proceeds of crimes that are subsequently laundered to make them appear legitimate. ML threat ratings were assigned to 21 predicate offences in 3rd National Risk Assessment, as per the assessment, corruption & bribery, illegal MVTS/ hundi/ hawala, tax crimes, smuggling and cash smuggling were assessed as ‘Very High’ risk.

While illicit trafficking in narcotic drug & psychotropic substances, trafficking in human beings & migrant smuggling, frauds & forgeries and cyber-crimes were rated as “High” risk. The predicate offences that were assessed as “Medium” included Illicit Arms Trafficking, Extortion, Insider Trading and Market Manipulation, Counterfeiting and Piracy of Products, Environmental Crimes, Robbery or Theft. The predicate offences that were assessed as Low Category crimes which included Sexual Exploitation, Including Sexual Exploitation of Children, llicit Trafficking in Stolen and Other Goods, Counterfeiting Currency, Murder, Grievous Bodily Injury and Maritime Piracy. The assessment of ML threats includes; a review of all the incidents based on the seriousness and magnitude of domestic and international crimes; the estimated amount of proceeds generated and the potential of money laundering. The capacity and resources of criminal actors and their level of sophistication to launder proceeds (including third-party launderers) and the level of criminal actors to continue committing a crime sustainably, and v. The sectors and channels used to launder proceeds

As per FATF, identifying, assessing, and understanding Money Laundering (ML) and Terrorism Financing (TF) risks is an essential part of the development and implementation of a national anti-money laundering / countering the financing of terrorism (AML/CFT) regime therefore, countries are encouraged by FATF to undertake National Risk Assessment (NRA) for their ML/TF risks so that they may implement a risk based approach to AML/CFT by prioritization and efficient allocation of resources.

An NRA Core Committee comprised of senior members from all the relevant stakeholders was constituted in 2021. NRA Core Committee was centrally coordinated by the National FATF Secretariat of Pakistan and supervised working groups comprised of senior officers from Law Enforcement Agencies LEA’s, Regulators/ Supervisors, Intelligence Agencies and Ministries/ Government Departments.

The working groups undertook a detailed work plan to complete the National Inherent Risk Assessment. Key elements of this work plan included, listing of all available data, reports and other information related to ML/TF threats, national and Sectoral vulnerabilities, and developing data management framework. Developing ML threat profiles for each of the FATF-defined predicate offences. Developing TF threat profiles for each group of terrorist actors suspected of conducting TF. Developing Sectoral vulnerability profiles for each of the Financial Institutions (FI), Virtual Asset Service Providers (VASPs), and DNFBP sectors and profiles for NPOs and LPLAs. Developing high-level national vulnerabilities and national consequences profiles for ML/TF. Now national TATF secretariat is planning holding workshops with all competent authorities to share and validate the profiles and to rate and validate the ratings of the threats and Sectoral vulnerabilities vii. Assess information gaps/confidence level of each rating result with experts.