Dr. Ikramul Haq & Abdul Rauf Shakoori
The latest update of Financial Action Task Force (FATF) to its mutual evaluation, follow-up, and International Co-operation Review Group procedures read in conjunction with the Consolidated Processes and Procedures for AML/CFT/CPF Mutual Evaluations and Follow-up (Universal Procedures) and the FATF Methodology indicates one of the most significant shifts in global anti-money-laundering oversight over a decade.
The revised framework, adopted originally in 2022 and updated again in October 2025, sets out a sharper, stricter and more time bound assessment regime for all member states and jurisdictions across the FATF Global Network. The changes come as jurisdictions face rising risks tied to money laundering, terrorist financing and the proliferation financing of weapons of mass destruction, threats whose complexity continues to evolve alongside technological and geopolitical shifts.
The updated procedures clarify how countries will be assessed, monitored, and held accountable under the FATF’s fifth round of evaluations, which began in 2024. The FATF emphasizes that its revised methodology contains a renewed push for effectiveness, transparency and measurable outcomes rather than a mere check-the-box compliance exercise. The shift aligns with growing global pressure to strengthen financial integrity frameworks and ensure that national systems adapt quickly when vulnerabilities emerge.
The revised evaluation cycle now follows a six-year schedule, making it far shorter than the earlier consisting of ten years. The FATF believes that the shorter cycle is essential to keeping jurisdictions aligned with rapidly changing global financial crime risks. The approach is designed to ensure that outdated assessments no longer linger for years, as was sometimes the case under the previous evaluation system.
The new assessment sequence considers three fundamental factors which includes the length of time since a country’s last evaluation, the level of money laundering and terrorist financing risk it faces, and the relative size of its financial system and economy. The use of these factors ensures that the FATF prioritizes evaluations for countries where potential global spillover risks are most significant. The emphasis on risk-based approach reflects the organization’s belief that timely scrutiny of large or high-risk economies is critical for protecting the international financial system from contagion effects.
The FATF’s updated procedures introduce a strict three year window for countries to correct deficiencies after their mutual evaluation. The consequences for falling behind are now clearer and more serious, including the possibility of public identification and escalating measures.
The FATF explicitly warns that jurisdictions that do not act within the prescribed timeframe could face public statements raising concerns about their outstanding shortcomings The clarification of consequences aims to instill urgency and encourage sustained political commitment, rather than short-term or cosmetic reforms. The new follow-up assessment framework is fully results oriented.
The FATF stresses that the focus will be on concrete actions taken to detect, prevent, and disrupt money laundering, terrorist financing and proliferation financing not simply on passing laws or issuing regulations. The organization expects jurisdictions to show real world impact through opting risk-based approach and supervision, successful investigations, prosecutions, asset recovery, information sharing and targeted financial sanctions. The updated procedures also introduce a stronger public identification system.
The FATF highlights that its revised listing framework is designed to ensure that the countries presenting the greatest systemic risk are placed on its monitoring lists. The revised process also introduces stronger support mechanisms for countries with weak anti money laundering and countering of financial terrorism (AML-CFT) regime, acknowledging that some jurisdictions require technical assistance and guidance to meet the FATF’s expectations.
The FATF confirms that these updates apply to all countries undergoing the fifth-round evaluation, using the amended methodology and procedural reforms. The fourth-round procedures and the 2013 Methodology, however, will continue to apply to jurisdictions still completing their earlier evaluation cycles or those already engaged in follow up processes under the previous framework.
The coexistence of two sets of procedures reflects the phased nature of FATF evaluations and the need to maintain consistency for countries already in the middle of the earlier process. The expanded procedural document emphasizes the importance of accurate, timely and comprehensive information sharing between assessed countries and evaluation teams. The responsibilities of assessed countries are detailed extensively, including obligations to provide complete access to laws, statistics, intelligence frameworks and institutional practices.
The FATF expects countries to facilitate unimpeded meetings with regulators, supervisors, law enforcement agencies, financial-intelligence units, prosecutors, private-sector entities and non-profit organizations. The responsibilities of assessors, reviewers and follow-up experts have also been strengthened.
The updated guidelines require assessors to commit significant time, demonstrate impartiality and apply a holistic, multi-disciplinary approach across all 40 Recommendations and 11 Immediate Outcomes. The FATF emphasizes that assessments are peer driven, with countries expected to contribute expert personnel as part of their responsibility as members of the global network.
The updated framework also reinforces the critical role of confidentiality and conflict-of-interest safeguards.
The FATF requires that all assessors, reviewers and Secretariat members sign confidentiality agreements and disclose any potential source of bias. The commitment to confidentiality is presented as essential for preserving the integrity and independence of the global evaluation process.
The updated system includes refined guidance on the scoping exercise that takes place before the on-site evaluation. The assessment team is required to conduct a detailed review of the assessed country’s risks, context, financial structure, threat environment and materiality factors.
The evolution update, developed in consultation with the assessed country, determines where the evaluation will apply increased scrutiny and where reduced focus may be appropriate.
The FATF claims that this process ensures that limited assessment resources are concentrated where the risks are highest. The FATF also strengthens its expectations around technical compliance updates. The organization requires countries to identify all Recommendations where material legal or operational changes have been made since the previous assessment. The technical compliance review then evaluates the adequacy and completeness of these reforms, measuring whether the relevant criteria are fully, mostly, partly or not met.
The on-site visit remains the core of the mutual evaluation process. The FATF notes that nine to ten days of meetings are generally required for jurisdictions with complex financial systems, followed by several days spent drafting the Mutual Evaluation Report. The on-site phase is where assessors test not only the formal framework but the functioning of agencies, the quality of coordination, the scale of enforcement outcomes and the level of compliance among financial institutions and designated non-financial businesses.
The FATF’s expanded follow-up system introduces Key Recommended Actions (KRAs) and a KRA Roadmap that countries must follow in the years after their evaluation. The KRAs outline the most urgent and priority reforms required for a jurisdiction to reach acceptable levels of effectiveness.
The FATF monitors progress through regular or enhanced follow-up, depending on the severity of deficiencies identified. The International Co-operation Review Group (ICRG) procedures have also been strengthened to ensure that jurisdictions with significant strategic deficiencies face firm, structured and consistent oversight. The revised criteria for ICRG referral, ongoing monitoring and eventual delisting aim to maintain credibility and fairness across the global network.
The clarification of roles for Joint Group co-chairs, lead reviewers and member experts reflects a drive for greater rigor and standardization. The FATF concludes the updated procedures by emphasizing the importance of transparency in publication and public communication. The Mutual Evaluation Reports, Follow-Up Reports and Technical Compliance Re-ratings will continue to be published promptly after Plenary adoption.
The commitment to timely publication is intended to ensure that markets, institutions and global partners have access to up-to-date information on a jurisdiction’s AML/CFT/CPF risk profile. The overall effect of the FATF’s updated procedural framework is the creation of a more demanding, more responsive and more accountability-driven global evaluation system.
The changes underscore that strong laws alone are insufficient and that only demonstrated effectiveness can protect financial systems from abuse.
The new procedures set higher expectations for political will, institutional cooperation and operational performance across all jurisdictions. The international community will be watching closely as countries prepare for their next evaluations under the fifth-round methodology, knowing that the bar has been raised and the global tolerance for weak enforcement is diminishing.
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Dr. Ikramul Haq, Advocate Supreme Court, specializes in constitutional, corporate, environment, media, ML/CFT related laws, IT, intellectual property, arbitration and international tax laws. He holds LLD in tax laws with specialization in transfer pricing. He was full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He served Civil Services of Pakistan from 1984 to 1996.
He established Huzaima & Ikram in 1996 and is presently its chief partner. He studied journalism, English literature and law. He is Chief Editor of Taxation. He is country editor and correspondent of International Bureau of Fiscal Documentation (IBFD) and member of International Fiscal Association (IFA). He is Visiting Faculty at Lahore University of Management Sciences (LUMS) and member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE).
He has coauthored with Huzaima Bukhari many books that include, Tax Reforms in Pakistan: Historic & Critical Review, Towards Broad, Flat, Low-rate, and Predictable Taxes (third edition, 2024), Pakistan: Enigma of Taxation, Towards Flat, Low-rate, Broad and Predictable Taxes (revised/enlarged edition of December 2020), Law & Practice of Income Tax, Law , Practice of Sales Tax, Law and Practice of Corporate Law, Law & Practice of Federal Excise, Law & Practice of Sales Tax on Services, Federal Tax Laws of Pakistan, Provincial Tax Laws, Practical Handbook of Income Tax, Tax Laws of Pakistan, Principles of Income Tax with Glossary and Master Tax Guide, Income Tax Digest 1886-2011 (with judicial analysis).
He is author of Commentary on Avoidance of Double Taxation Agreements, Pakistan: From Hash to Heroin, its sequel Pakistan: Drug-trap to Debt-trap and Practical Handbook of Income Tax. Two books of poetry are Phull Kikkaran De (Punjabi 2023) and Nai Ufaq (Urdu 1979 with Siraj Munir and Shahid Jamal).
He regularly writes columns/article/papers for many Pakistani newspapers and international journals and has contributed over 3000 articles on a variety of issues of public interest, printed in various journals, magazines and newspapers at home and abroad.
X (formerly Twitter): DrIkramulHaq
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Abdul Rauf Shakoori, Advocate High Court, is a subject-matter expert on AML-CFT, Compliance, Cyber Crime and Risk Management. He has been providing AML-CFT advisory and training services to financial institutions (banks, DNFBPs, Investment companies, Money Service Businesses, insurance companies and securities), government institutions including law enforcement agencies located in North America (USA & CANADA), Middle East and Pakistan. His areas of expertise include legal, strategic planning, cross border transactions including but not limited to joint ventures (JVs), mergers & acquisitions (M&A), takeovers, privatizations, overseas expansions, USA Patriot Act, Banking Secrecy Act, Office of Foreign Assets Control (OFAC).
Over his career he has demonstrated excellent leadership, communication, analytical, and problem-solving skills and have also developed and delivered training courses in the areas of AML/CFT, Compliance, Fraud & Financial Crime Risk Management, Bank Secrecy, Cyber Crimes & Internet Threats against Banks, E–Channels Fraud Prevention, Security and Investigation of Financial Crimes. The courses have been delivered as practical workshops with case study driven scenarios and exams to insure knowledge transfer.
His notable publications are: Rauf’s Compilation of Corporate Laws of Pakistan, Rauf’s Company Law and Practice of Pakistan and Rauf’s Research on Labour Laws and Income Tax and others.
His articles include: Revenue collection: Contemporary targets vs. orthodox approach, It is time to say goodbye to our past, US double standards, Was Due Process Flouted While Convicting Nawaz Sharif?, FATF and unjustly grey listed Pakistan, Corruption is no excuse for Incompetence, Next step for Pakistan, Pakistan’s compliance with FATF mandates, a work in progress, Pakistan’s strategy to address FATF Mandates was Inadequate, Pakistan’s Evolving FATF Compliance, Transparency Curtails Corruption, Pakistan’s Long Road towards FATF Compliance, Pakistan’s Archaic Approach to Addressing FATF Mandates, FATF: Challenges for June deadline, Pakistan: Combating the illicit flow of money, Regulating Crypto: An uphill task for Pakistan. Pakistan’s economy – Chicanery of numbers. Pakistan: Reclaiming its space on FATF whitelist. Sacred Games: Kulbhushan Jadhav Case. National FATF secretariat and Financial Monitoring Unit. The FATF challenge. Pakistan: Crucial FATF hearing. Pakistan: Dissecting FATF Failure, Environmental crimes: An emerging challenge, Countering corrupt practices .
X (formerly Twitter): Adbul Rauf Shakoori
The recent publication, coauthored by these writes with Huzaima Bukhari is:
Pakistan Tackling FATF: Challenges & Solutions, available at:
https://aacp.com.pk/book-detail/pakistan-tackling-fatf-challenges-and-solutions-35
https://www.amazon.com/dp/B08RXH8W46