As a result of Pakistan’s successful implementation of steps to address the strategic shortcomings in their Anti Money Laundering/Countering the Financing of Terrorism (AML/CFT) regime, the European Union (EU) has formally removed the country off its “List of High-Risk Third Countries.” The legal and commercial actors of the EU will no longer be required to conduct “Enhanced Customer Due Diligence” on Pakistani companies and people.
Pakistan has fixed the strategic flaws in its AML/CFT system, in accordance with the delegated legislation, and no longer constitutes a serious AML/CFT danger to the global financial system. Due to this choice, Pakistan is no longer listed among the countries that have strategic flaws in their AML/CFT frameworks and does not constitute a substantial threat to the European Union’s financial system.
This ruling eliminates the “Enhanced Customer Due Diligence” requirement for “Obligated Entities” in EU member states when interacting with people and businesses formed in Pakistan. Credit institutions, financial institutions, natural or legal persons working in the course of their official business, external accountants, tax consultants, notaries, and other independent legal experts are all considered “Obligated Entities.”
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On October 22, 2018, the EU first added Pakistan on its “List of High-Risk Countries.” However, the choice to take Pakistan off the list will increase the degree of confidence among European businesspeople and is likely to reduce the expense and duration of legal and financial operations by Pakistani businesses and people in the area. In November 2022, the UK earlier took Pakistan off of its high-risk list.
