The European Union (EU) has withdrawn Pakistan from its “list of high-risk third countries”, a move that is expected to enhance conditions for business activity.
In a statement announcing the news on Wednesday, Pakistan’s Ministry of Commerce said the listing of Pakistan in 2018 had resulted in creating a regulatory burden impacting Pakistani firms doing business with the 27-member bloc.
The new development would add to the comfort level of the European economic operators and is likely to ease the cost and time of legal and financial transactions by Pakistani entities and individuals in EU.”
The statement said.
Foreign Minister Bilawal Bhutto-Zardari said in a Twitter post that Pakistani businesses and individuals “would no longer be subjected to Enhanced Customer Due Diligence” by European legal and economic operators.
The “high-risk third countries” list includes countries that, according to the EU, do not have a strong enough regulatory and lawful system to control financial crimes and “terrorism” financing that could pose significant threats to the financial system of the bloc.
When a nation is added to the (EU)list, it is subjected to particularly enhanced scrutiny and further steps that raise the cost of doing business.
The Pakistani entities that will no longer be subjected to enhanced EU scrutiny include credit and financial institutions, auditors, external accountants, tax advisers, notaries, and independent legal professionals, among others.
Pakistan’s delegation in the EU called the removal from the list a “positive step”.
“In line with last year’s FATF decision, the EU has decided to remove Pakistan from its list of countries with high risk regarding money laundering & financing of terrorism,” it tweeted, referring to the decision by the global money laundering and financing watchdog, the Financial Action Task Force (FATF), to pull Pakistan from its list of nations under “increased monitoring” after four years.
Khaqan Najeeb, a former adviser to the Ministry of Finance, praised the EU determination as evidence of Pakistan’s success in withdrawing “strategic deficiencies” that were highlighted under the FATF listing, which can severely restrict a country’s international borrowing capabilities.
In an interview with Al Jazeera, he added that this announcement shows that the EU has accepted that weaknesses in the country’s legal and regulatory systems have been upgraded and Pakistan can now prevent financial crimes and terrorist financing.
