ISLAMABAD: Pakistan has been removed from the European Union’s ‘High-Risk Third Countries’ list that includes nations which have strategic deficiencies in the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime and pose a serious threat to their financial system.
“According to the Delegated Regulation, following the measures implemented to address the action plans agreed with the Financial Action Task Force (FATF), Nicaragua, Pakistan and Zimbabwe have remedied the strategic deficiencies in their respective AML/CFT regimes and no longer pose a significant AML/CFT threat to the international financial system,” the Ministry of Commerce said in a statement on Wednesday.
As a result of the measures, the “Obligated Entities” in EU member states would no longer be required to apply “Enhanced Customer Due Diligence” while dealing with individuals and legal entities established in Pakistan.
Elaborating the “Obligated Entities” which included credit and financial institutions, the statement described auditors, external accountants and tax advisors; notaries and other independent legal professionals as ‘natural or legal persons’ involved in professional activities.
It explained the professional activities like “buying and selling of real property or business entities; managing of client money, securities or other assets; opening or management of bank, savings or securities accounts; organization of contributions necessary for the creation, operation or management of companies; creation, operation or management of trusts, companies, foundations, or similar structures; trust or company service providers not already covered and estate agents.”
It also validated other persons trading in goods to the extent that payments made or received in cash in an amount of EUR 10,000 or more, whether the transaction is carried out in a single operation or in several operations which appear to be linked.
According to the national news agency, Pakistan was included in the “List of High-Risk Countries” on October 22, 2018, by the EU.
The placement of Pakistan in the list had created an undue regulatory burden on “Obligated Entities” in the EU and there were instances whereby some of them had refused to entertain legal and financial transactions with individuals and entities based in Pakistan.
“The new development would add to the comfort level of the European economic operators and is likely to ease the cost and time of legal and financial transactions by Pakistani entities and individuals in the EU,” the ministry said.
