Implementation of FATF standards and Law Enforcement Agencies in Pakistan: Challenges and a Way Forward

Abstract

This research paper is a critical examination of the adoption of Financial Action Task Force (FATF) standards by the Law Enforcement Agencies (LEAs) of Pakistan. Following the grey-listing of Pakistan in 2018, the state started a massive legislative reform to make its Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) framework compliant with international standards. The main aim of this research will be to determine the performance of the main LEAs in Pakistan namely the Federal Investigation Agency (FIA), the National Accountability Bureau (NAB) and provincial Police Departments in the implementation of these new laws. The article has taken the approach of a doctrinal research methodology in which primary legal texts, such as the Anti-Money Laundering Act (AMLA) 2010, the Anti-Terrorism Act (ATA) 1997, and the National Accountability Ordinance (NAO) 1999, and key case laws, including Justice Qazi Faez Isa v. Safdar Ali Khan v. the President of Pakistan. The State. The most significant results show that there is a great detachment between the legislative compliance and enforcement reality. Although the state has been able to develop a strong de jure system, giving the agencies cognizable arrest powers and expansive investigative authorities, the actual implementation is undermined by pathologies within the system. These are broken intelligence pipeline in which LEAs are not using financial intelligence efficiently, vicious jurisdiction turf wars between FIA and NAB and a dire lack of specialized human capital needed to conduct forensic financial investigation. The research paper finds out that the existing enforcement paradigm is repressive and divided. The only solution is a radical structural re-engineering, namely establishment of one National Financial Crime Agency (NFCA) and institutionalization of intelligence-led policing by a National Financial Crime Academy.