The European Union (EU) has officially removed Pakistan from its “List of High-Risk Third Countries” due to the country’s successful implementation of measures to address the strategic deficiencies in their Anti Money Laundering/Countering the Financing of Terrorism (AML/CFT) regime. This means that Pakistani businesses and individuals will no longer be subjected to “Enhanced Customer Due Diligence” by the EU’s legal and economic operators.
According to the delegated regulation, Pakistan has remedied the strategic deficiencies in its AML/CFT regime and no longer poses a significant AML/CFT threat to the international financial system. This decision has led to the removal of Pakistan from the list of nations with strategic deficiencies in their respective AML/CFT frameworks, and they do not pose a significant threat to the financial system of the European Union.
As a result of this decision, 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. The “Obligated Entities” include credit institutions, financial institutions, natural or legal persons acting in the exercise of their professional activities, auditors, external accountants, tax advisors, notaries, and other independent legal professionals.
Pakistan was initially included in the “List of High-Risk Countries” on October 22, 2018, by the EU. However, the decision to remove Pakistan from the list will add to the comfort level of European economic operators and is likely to ease the cost and time of legal and financial transactions by Pakistani entities and individuals in the region. The UK had previously removed Pakistan from its high-risk list in November 2022.
