Pakistan Country Summary

FATF Status

Pakistan is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies.

Compliance with FATF Recommendations

The last Follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Pakistan was undertaken in 2022. According to that Evaluation, Pakistan was deemed Compliant for 9 and Largely Compliant for 29 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

Pakistan faces significant challenges related to crime and corruption, characterized by widespread bribery and a perception of inefficiency within its judicial system. Despite some progress in accountability measures, the influence of political and military figures on lower courts raises concerns about the integrity of legal processes, while organized crime, including human trafficking and drug smuggling, remains prevalent due to insufficient governance and economic instability.

Pakistan's economy has shown signs of recovery from a near debt default in early 2023, stabilizing after completing a $3 billion IMF Stand-By Arrangement in April 2024 and securing a $7 billion Extended Fund Facility in September 2024. Despite improvements in foreign exchange reserves and inflation rates, the investment climate remains precarious, hindered by high debt levels, low investment rates, and ongoing global trade disruptions. The government is focused on increasing the tax base, enhancing growth, expanding exports, and attracting foreign investment, while simultaneously addressing challenges such as bureaucratic red tape, weak rule of law, and political uncertainty that deter foreign investors.