Money Laundering Laws in Pakistan and Their Compliance With FATF (Applied Linguistics Research Review)

Summary

• Pakistan introduced legislative and institutional changes to align its anti-money laundering and counter-terrorism financing systems with FATF standards [p.1].p.1
• Reforms included amendments to the Anti-Money Laundering Act 2010 and expanded powers for key regulatory bodies [p.3].p.3
• Implementation remains hampered by judicial delays, institutional corruption, and reliance on unbanked hawala and hundi systems [p.5].p.5
• Technological advancements such as Artificial Intelligence and Biometric Verification present opportunities to enhance suspicious activity detection [p.6].p.6

Key insights

1. FATF grey listing acted as the chief driver for regulatory and banking reforms in Pakistan [p.3].p.3
2. The Anti-Money Laundering Act, 2010 serves as the primary legal framework criminalizing financial offenses and enabling asset freezing in Pakistan [p.4].p.4
3. Regulatory compliance, deterrence, and institutional theories explain the mechanisms of anti-money laundering enforcement [p.4].p.4
4. Informal financial transfer mechanisms such as hawala and hundi pose significant monitoring challenges due to their anonymity [p.5].p.5
5. Lack of timely information sharing among agencies like FIA, NAB, SBP, and SECP undermines investigative effectiveness [p.5].p.5
6. Achieving FATF compliance facilitates access to foreign financial markets and attracts foreign direct investment [p.5].p.5
7. Integrating AI tools into suspicious transaction and activity monitoring (STAM) can improve enforcement efficiency [p.7].p.7