The federal cabinet has approved the launch of a comprehensive five-year national anti-money laundering (AML) policy, marking a significant step in strengthening the country’s financial crime prevention framework. The decision underscores the government’s commitment to aligning with international standards set by the Financial Action Task Force (FATF) and enhancing transparency across public and private sectors.
Policy overview and objectives
The newly endorsed National Anti-Money Laundering Policy spans fiscal years 2026 to 2031 and outlines a coordinated strategy to detect, deter, and disrupt illicit financial flows. Key objectives include:
- Preventing the misuse of the national financial system for money laundering and terrorist financing
- Strengthening institutional capacity of law enforcement, regulatory bodies, and financial intelligence units
- Promoting inter-agency coordination and information sharing
- Enhancing compliance obligations for businesses, including virtual asset service providers (VASPs)
- Reducing corruption, tax evasion, hundi/hawala operations, and organized crime financing
According to a senior official from the Finance Ministry, the policy aims to safeguard economic stability by insulating the fiscal system from the risks posed by financial crime. It specifically targets revenue leakage, cryptocurrency-related offenses, drug trafficking proceeds, fraud, counterfeit currency circulation, and internal terrorism financing.
Strategic components and implementation roadmap
The policy is structured around five strategic pillars:
- Legal and Regulatory Framework Enhancement
Updates to existing AML legislation will close loopholes, expand the scope of obliged entities, and introduce stricter beneficial ownership transparency requirements. - Institutional Capacity Building
Specialized training programs will be rolled out for law enforcement agencies, customs authorities, and financial supervisors to improve detection and investigation capabilities. - Public-Private Partnership and Information Sharing
A secure platform will enable real-time data exchange between banks, fintech firms, and government agencies to flag suspicious transactions more effectively. - Risk-Based Supervision and Compliance Monitoring
Regulators will adopt a risk-based approach, focusing resources on high-risk sectors such as real estate, precious metals dealers, and crypto exchanges. - International Cooperation
The policy emphasizes deeper collaboration with foreign counterparts, including mutual legal assistance treaties and participation in global AML networks.beehive.
Implementation will be overseen by a newly formed National AML Steering Committee, chaired by the Finance Secretary and comprising representatives from the State Bank, Securities Commission, Internal Revenue Authority, and law enforcement agencies.
Statements from key stakeholders
Finance Minister, in a post-cabinet briefing, stated: “This policy reflects our resolve to protect the integrity of Pakistan’s financial system. By adopting a whole-of-government approach, we are sending a clear message that illicit finance will not find refuge here.
The Governor of the State Bank highlighted the importance of private sector buy-in: “Banks and non-bank financial institutions must treat AML compliance not as a checkbox exercise but as a core component of risk management. The next five years will be about embedding a culture of vigilance.
A spokesperson for the Financial Monitoring Unit (FMU) added: “With enhanced powers and better data analytics, we will be able to identify complex laundering schemes faster and support prosecutions more effectively.
Sector-specific implications
Banking and financial services
Banks will face stricter customer due diligence (CDD) requirements, including mandatory verification of beneficial owners for corporate accounts. Transaction monitoring systems must be upgraded to meet real-time reporting thresholds.
Virtual assets and cryptocurrencies
The policy brings crypto exchanges, wallet providers, and ATM operators under the AML regulatory umbrella. Licensing will be conditional on robust KYC/AML protocols, and cross-border transfers above a set threshold will trigger enhanced scrutiny.
Real estate and high-value dealers
Property transactions above a defined value will require source-of-funds declarations. Dealers in gold, jewelry, and luxury vehicles must maintain auditable records and report cash transactions exceeding prescribed limits.
Non-profit organizations
To prevent misuse for terrorist financing, NPOs will undergo risk profiling and may be subject to periodic audits depending on their funding sources and geographic exposure.
Alignment with international standards
The policy has been drafted in consultation with FATF recommendations and incorporates best practices from jurisdictions such as Singapore, New Zealand, and the European Union. It addresses previous mutual evaluation findings and positions the country for improved ratings in upcoming assessments.mof.gov+1
Notably, the move to a single AML supervisor—mirroring New Zealand’s recent reforms—aims to reduce regulatory fragmentation and ensure consistent enforcement across sectors.
Challenges and expectations
While the policy sets an ambitious agenda, experts caution that success hinges on sustained political will, adequate budgetary allocation, and technical capacity. Civil society groups have called for greater transparency in publishing enforcement outcomes and protecting whistleblowers.
Business associations have welcomed the clarity but urged the government to phase in compliance requirements to avoid overwhelming smaller enterprises. “We support the intent, but implementation must be pragmatic and supported by capacity-building initiatives,” said a representative from the Chamber of Commerce.