Global money laundering watchdog the Financial Action Task Force (FATF) has said it will keep Pakistan on its "grey list" despite Islamabad's "significant progress" in plugging money laundering and terrorism financing.
In an online press briefing on Thursday from Paris, FATF President Marcus Pleyer said Islamabad had made "significant progress" but there remained "serious deficiencies" in mechanisms to end money laundering and terrorism financing.
Pleyer said three out of 27 action points still needed work.
FATF had placed Pakistan on its "grey list" of countries with inadequate controls over terrorism financing in 2018, which made foreign firms more cautious about investing in Pakistan.
Pleyer said Pakistan "must improve their investigations and prosecutions of all groups and entities financing terrorists and their associates and show penalties by courts are effective. As soon as Pakistan shows it has completed these items, FATF will verify and members of FATF will vote."
Implementing FATF roadmap
Following the announcement, Pakistan said it was committed to complying with the FATF evaluation process.
"It was also noted by FATF member countries that Pakistan is subject to perhaps the most challenging and comprehensive action plan ever given to any country," Pakistani federal minister Hammad Azhar wrote on Twitter.
Azhar, who leads Pakistan's effort to implement the FATF roadmap, said the country was "subject to dual evaluation processes of FATF with differing time lines."
Last year, Azhar said that FATF acknowledged that any blacklisting, meaning further downgrading of the country's status, is off the table now.
However, replying to a question, Pleyer said that the risk of Pakistan being put on the blacklist has not gone, and that the country must continue to work on outstanding action points to fix its financial monitoring mechanisms.
FATF not an investigative organisation
According to Dawn website, Pleyer said the FATF was not an investigative organisation in response to a question by an Indian journalist about prosecution of terrorists in Pakistan.
"What we assess is the entire system of anti-money laundering [and] the framework. This does not change with incidents per se," he said.
"What is now essential is that Pakistan completes the action plan."
Responding to another question about Pakistan's allegations of funding of terrorism by India, the FATF president declined to comment on specific incidents, and repeated FATF was not an investigative agency.
"India is subject to [the] same rules as any other country and FATF will assess India as any other country when the time comes," he said.