The UK government has removed Pakistan from its list of "High Risk Third Countries", which covers jurisdictions perceived to have unsatisfactory money laundering and terrorist financing controls.

The list, which is now made up of 26 countries including the likes of Iran, Myanmar and Syria, also removes Nicaragua as high risk in an amendment tabled in Parliament on Monday.

It replicates countries listed as high risk or under increased monitoring by the Financial Action Task Force (FATF), an intergovernmental organisation founded in 1989 on the initiative of the G7 to develop policies to combat money laundering and to maintain certain interest.

"On the new list, Nicaragua and Pakistan are no longer classed as high-risk third countries for the purposes of enhanced customer due diligence requirements in regulation," reads the official UK government legislation dated November 14.

The move follows an advisory notice by the UK Treasury welcoming "significant progress" in its anti-money laundering and combatting the financing of terrorism and proliferation (AML/CFT) regime.

"The FATF welcomes Pakistan's significant progress in improving its AML/CFT regime. Pakistan has strengthened the effectiveness of its AML/CFT regime and addressed technical deficiencies to meet the commitments of its action plans regarding strategic deficiencies that the FATF identified in June 2018 and June 2021, the latter of which was completed in advance of the deadlines, encompassing 34 action items in total," reads the advisory.

"Pakistan is therefore no longer subject to the FATF's increased monitoring process. Pakistan will continue to work with APG [Asia-Pacific Group on Money Laundering] to further improve its AML/CFT system," it notes.

Pakistan's Foreign Minister Bilawal Zardari Bhutto shared the "good news" on his Twitter handle alongside a Note Verbale or diplomatic note from the UK Foreign, Commonwealth and Development Office (FCDO).

The FCDO note reads: "His Majesty's Treasury issued an amendment to the UK's High Risk Third Countries' list on 14 November 2022 through a Statutory Instrument. The amendment removes Pakistan from the list in accordance with the decision taken by the Financial Action Task Force (FATF) on 21 October 2022.

"The FCDO recognises the progress Pakistan has made to improve money laundering and terrorist financing controls."

The UK government had added Pakistan to the list of high-risk countries in April 2021 following FATF action to red flag countries with weak financial monitoring procedures.