ISLAMABAD: There is “no question” of Pakistan being downgraded from a gray to a blacklist by a global financial watchdog this October for failing to curb money laundering and counter-terrorism financing, the prime minister’s top adviser on information said on Tuesday.
Last year, the Financial Action Task Force (FATF) placed Pakistan on a gray list of countries with inadequate terror funding controls. In June, the watchdog said Pakistan had until October to improve its counter-terror finance operations.
If the South Asian nation does not comply with an agreed-upon action plan by then, it could be downgraded to a blacklist, and face sanctions, which would hurt the country’s economy and exports.
FATF will formally announce its decision in Paris after a plenary that starts on October 13. Before that, Pakistan’s steps to fulfil an action plan agreed in June last year will also be reviewed at a meeting in Bangkok, starting September 5
“There is absolutely no question of Pakistan’s degradation to the blacklist,” Dr. Firdous Ashiq Awan, Prime Minister Imran Khan’s Special Assistant on Information and Broadcasting, told Arab News. “Our progress on different fronts to meet the FATF’s requirements is already before the world.”
“We are taking all necessary measures to ensure hundred percent implementation of the FATF’s action plan ... and are quite optimistic to get off the gray list on the basis of our actions in October,” Awan added.
The Pakistan government was following a “multi-pronged” approach to meeting FATF’s requirements, the information adviser said, and had moved to strengthen its laws against money laundering and terror financing, ban militant outfits and choke their sources of financing.
“We have plugged almost all loopholes in our financial system, and new laws [against money laundering and financing terrorism] will be passed by parliament soon,” she said.
Last week, Pakistan’s finance ministry rejected as baseless Indian media reports that Islamabad was put on a FATF black list. India, engaged in a standoff with Pakistan over the disputed region of Kashmir, has pressed for further sanctions against its neighbor.
“We are fully engaged with almost all members of the FATF and our diplomatic efforts will also help counter the Indian propaganda,” Awan said.
According to the 36-nation FATF charter, the support of at least three member states is essential to avoid blacklisting. India – Pakistan’s arch-rival and a co-chair of the joint group of FATF and Asia Pacific Group – has been pushing for Islamabad to be downgraded to the black list.
FATF has asked Pakistan to work on implementing its action plan to address its strategic deficiencies, including by: (1) adequately demonstrating its proper understanding of the TF (terror financing) risks posed by the terrorist groups , and conducting supervision on a risk-sensitive basis; (2) demonstrating that remedial actions and sanctions are applied in cases of AML/CFT (anti-money laundering/counter terrorist financing) violations, and that these actions have an effect on AML/CFT compliance by financial institutions; (3) demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS); (4) demonstrating that authorities are identifying cash couriers and enforcing controls on illicit movement of currency and understanding the risk of cash couriers being used for TF; (5) improving inter-agency coordination including between provincial and federal authorities on combating TF risks; (6) demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and persons and entities acting on behalf or at the direction of the designated persons or entities; (7) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions and enhancing the capacity and support for prosecutors and the judiciary; and (8) demonstrating effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1267 and 1373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services; (9) demonstrating enforcement against TFS violations including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases; (10) demonstrating that facilities and services owned or controlled by designated person are deprived of their resources and the usage of the resources.
Pakistan says “no question” of being blacklisted by FATF over terror funding controls
Pakistan says “no question” of being blacklisted by FATF over terror funding controls
- Taking “all necessary measures” to get off watchdog’s gray list, PM’s adviser on information says
- Pakistan has until October to improve its counter-terror finance operations or face further action, including sanctions
IMF staff concludes Pakistan visit, urges Islamabad to decrease state intervention in economy
- IMF delegation visited Pakistan from Nov. 12-15 to discuss economic policies, reform efforts
- Both sides agreed Islamabad needs to mobilize revenue from “untapped tax bases,” says IMF official
ISLAMABAD: The International Monetary Fund (IMF) announced this week it had concluded its state visit to Pakistan, calling on Islamabad to decrease state intervention in the economy, mobilize revenue via tax reforms and adopt prudent fiscal policies.
The IMF released its statement late Friday as a delegation led by its Pakistan mission chief, Nathan Porter, completed a five-day trip to the country during which it discussed the performance of a $7 billion loan program approved in September.
The IMF has clarified Porter’s visit is not part of the first review of the loan program, which is not scheduled to take place before the first quarter of 2025.
The international lender has repeatedly called on Pakistan to undertake tax and energy reforms as well as privatize state-owned assets which it says are critical to revitalize its fragile $350 billion economy.
“Structural energy reforms and constructive efforts are critical to restore the sector’s viability, and Pakistan should take steps to decrease state intervention in the economy and enhance competition, which will help foster the development of a dynamic private sector,” Porter said in a statement.
The IMF official said both sides agreed with the need for Islamabad to continue prudent fiscal and monetary policies, mobilizing revenue from “untapped tax bases” and transferring greater social and development responsibilities to provinces.
“Strong program implementation can create a more prosperous and more inclusive Pakistan, improving living standards for all Pakistanis,” Porter said.
In an earlier statement on Friday, the IMF urged Pakistan to digitalize its budget preparation and execution processes to improve fiscal monitoring and reporting to overcome deviations from the planned budgets.
IMF loan bailouts are critical for Pakistan, which narrowly avoided a sovereign default last year before clinching a last-gasp $3 billion loan from the international lender.
Pakistan’s finance minister has repeatedly stressed implementing painful reforms to ensure the country does not seek loans repeatedly from the global lender at exorbitant interest rates.
Pakistan’s Ayla Majid becomes first South Asian and Muslim to be elected ACCA president
- Ayla Majid is the CEO of a firm that advises on decarbonization, sustainability and energy transition
- She will lead 252,500 members and 526,000 future members of ACCA across 180 countries during her tenure
ISLAMABAD: Ayla Majid, the chief executive officer of a firm that advises on decarbonization, sustainability and energy transition, made history this week after becoming the first South Asian and Muslim to get elected as president of the global accountancy body ACCA (Association of Chartered Certified Accountants).
Majid will lead more than 252,500 members and 526,000 future members of ACCA across 180 countries during her year-long term of office, ACCA wrote on its website on Friday.
Currently the founder and CEO of Planetive Middle East and Planetive Pakistan, Majid has over 20 years of experience in energy, transaction advisory, mergers and acquisitions, investments and corporate governance.
She holds a Master of Business Administration degree from the Lahore University of Management Sciences (LUMS) and a Bachelor of Law degree from the University of London.
“It’s an honor and a deeply meaningful moment, not just for me but for so many who see themselves in this achievement,” Majid told Arab News via email on Friday.
“Breaking these barriers reflects the values of inclusion and diversity that ACCA embodies,” she added. “Personally, it’s a testament to the power of resilience and the importance of representation.”
Majid said the accounting and finance profession globally is evolving rapidly in response to the demands of a changing world, explaining that issues such as sustainability, digital transformation and evolving regulatory landscapes are reshaping the skills accountants need.
“Additionally, we must ensure the profession remains relevant in addressing societal challenges such as climate change and economic inequality,” she said.
“ACCA can play a pivotal role by continuously enhancing its qualifications to include skills in sustainability reporting, digital transformation, and strategic leadership.”
Majid called for global collaboration and championing inclusion, saying that through such initiatives, ACCA can prepare its members to not just respond to challenges but “lead with purpose and impact.”
“My vision for ACCA is to continue being a catalyst for positive change, working alongside diverse group of partners and collaborate more on global agendas,” Majid said.
“By strengthening our advocacy on global issues like climate action and economic resilience, we can shape a better future,” she added.
Pakistan keeps prices of petroleum products unchanged till Nov. 30
- Prices of high speed diesel, petrol to remain unchanged at Rs255.14 per liter and Rs248.38 per liter respectively
- Pakistan revises prices of petroleum products every fortnight based on variations of prices at international market
ISLAMABAD: Pakistan’s government announced its decision this week to keep prices of petroleum products unchanged till the next fortnight on Nov. 30, state-run media reported.
Pakistan revises petroleum prices every fortnight. Petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers in Pakistan while any increase in the price of diesel is considered highly inflationary as it is mostly used to power heavy transport vehicles and particularly adds to the prices of vegetables and other eatables.
“The government has announced on Friday that prices of the petroleum products would remain unchanged during the next fortnight from November 16th to 30th 2024,” the state-run Associated Press of Pakistan (APP) reported on Friday.
As per the latest notification, the price of high speed diesel (HSD) remains unchanged at Rs 255.14 per liter while the price of petrol also remains unchanged at Rs 248.38 per liter.
“The Oil and Gas Regulatory Authority has worked out the prices of petroleum products for the next fortnight based on the price trends in the international market during the last two weeks,” the APP said.
On Oct. 31, Pakistani authorities increased the price of petrol from Rs247.03 per liter to Rs248.38 per liter, saying it decided to do so “based on the price variation in the international market.”
Pakistan rejects sole $36 million bid for national flag carrier
- Blue World City, a real estate development company, last month bid $36 million for state-owned PIA airline
- Pakistan seeks to offload 51-100% stake in national airline to reform state-owned enterprises as per IMF deal
ISLAMABAD: Pakistan’s Cabinet Committee on Privatization (CCOP) this week rejected a $36 million bid from a real estate development company to acquire 60 percent stakes in the government-owned Pakistan International Airlines (PIA), state-run media reported.
Pakistan’s process to privatize the PIA encountered difficulties last month when its final bidding round for the national flag carrier attracted just one bid of Rs10 billion ($36 million) for a 60 percent stake in the airline. The bid was made by real estate development company Blue World City.
The cash-strapped country is looking to offload a 51-100 percent stake in the debt-ridden PIA to raise funds and reform state-owned enterprises as envisaged under a $7 billion International Monetary Fund (IMF) program.
A meeting of the CCOP chaired by Deputy Prime Minister Ishaq Dar on Friday discussed Blue World City’s bid and the Privatization Commission’s (PC) suggestion to reject it.
“The Cabinet Committee on Privatization (CCOP) rejected the bid of Rs10 billion submitted by the Blue World City for the divestment of 60 percent shares of the Pakistan International Airlines, accepting the recommendations of the Privatization Commission Board,” the state-run Associated Press of Pakistan (APP) reported on Friday.
The CCOP reiterated the government’s resolve to divest the national flag carrier through privatization or government-to-government (G2G) mode.
“The body noted with satisfaction the assessment of the aviation division on healthy PIACL’s finances,” APP said.
Pakistan’s government disclosed last year that it had signed a contract with the New York City administration to resume business activities at the Roosevelt Hotel, which is owned by the PIA.
The hotel was closed by Pakistani authorities in October 2020 during the coronavirus pandemic, as the country’s economy weakened and the aviation sector faced significant losses. However, the facility accumulated liabilities of around $25 million in taxes and other overheads.
“The committee also constituted a committee under the convenorship of the minister of state for finance to evaluate possible transaction options for the privatization of Roosevelt Hotel and modes to be adopted in the light of available legal provisions,” APP said.
Pakistan’s Khyber Pakhtunkhwa (KP) province and a business group in Canada led by a Pakistani expat have both expressed their interest in acquiring the national flag carrier.
The government had pre-qualified six groups for PIA’s privatization process in June, but only real-estate development company Blue World City participated in the bidding process last month, placing a bid that was below the government-set minimum price of Rs85 billion ($304 million).
The disposal of PIA is a step former governments have steered away from, as it has been highly unpopular given the number of layoffs that would likely result from it.
Other concerns raised by potential bidders for the PIA stake included inconsistent government communication, unattractive terms and taxes on the sector, and the flag carrier’s legacy issues and reputation.
IMF urges Pakistan to digitalize budget preparation for better fiscal monitoring
- The international lender says budget processes still involve manual and paper-based steps despite reforms
- IMF has pointed out Pakistan’s interest payments absorb 60 percent of budgeted revenue due to public debt
ISLAMABAD: The International Monetary Fund (IMF) has suggested Pakistan to digitalize its budget preparation and execution processes to improve fiscal monitoring and reporting to overcome deviations from the planned budgets.
In a technical assistance report to improve budget practice brought out this week, the international lender said Pakistan needed to take strong control over the budget in the coming years.
The report came as an IMF delegation led by Pakistan mission chief, Nathan Porter, completed a five-day trip to the country in which it discussed the performance of a $7 billion loan program approved in September. The IMF has said Porter’s visit is not part of the first review of the loan program, which is not scheduled to take place before the first quarter of 2025.
“An examination of Pakistan’s recent budgetary outcomes reveals substantial deviations from planned budgets,” the lender said in the report. “While these discrepancies are partially due to an unstable external environment and political uncertainties, the establishment of stronger fiscal institutions can help deliver a more credible budget, tighten its execution, and prevent policy slippages.”
The IMF pointed out that despite several reforms, the budget processes still involved significant manual and paper-based steps.
“Fully digitalized processes are yet to be prepared and implemented in the Financial Accounting and Budgeting System,” it said in the report. “The Finance Division has designed a data warehouse to store fiscal data and made available a set of dashboards for use by stakeholders, but this is hampered by the lack of timely data provided by some key entities. As a result, fiscal reporting is not yet comprehensive and timely.”
It added that regulatory framework and fiscal data governance practices, including data exchange, did not fully address these challenges.
The IMF also noted Pakistan’s public debt had increased considerably, and interest payments were now absorbing 60 percent of budgeted revenue.
However, it recognized that multiple external shocks and the unprecedented floods in 2022 buffeted the economy and the government’s fiscal position.
“These shocks have been compounded by policy slippages including unbudgeted subsidies, and delays in implementing revenue measures,” it continued, adding the authorities now had the difficult task of converting a primary deficit of 1.3 percent of GDP for FY23 into a primary surplus for FY24. It also emphasized continued fiscal restraint, while preserving essential social and development spending.
The international lender suggested the finance division to require line ministries to prepare their budget submissions within a binding budget ceiling and explain any request for additional resources.
“Consider a reorganization of the Finance Division to reduce fragmentation and improve effective decision-making,” the reported suggested. “Support the reorganization with a functional review of the Division’s structure and staffing.”
