The EU has removed Pakistan from its list of "High-Risk Third Countries" that do not have a robust anti-money laundering and countering terrorist financing regime, a move welcomed by Prime Minister Shehbaz Sharif on Wednesday as a major development which would facilitate the cash-strapped country's businesses.
The developments come as a much-needed breather when Pakistan faces an economic crisis.
The EU's delegation in Pakistan termed it an "important positive step" for Pakistan.
"In line with last year's FATF (Financial Action Task Force) decision, the EU has decided to remove Pakistan from its list of countries with high risk regarding money laundering and financing of terrorism," it said on Twitter.
It was referring to the decision by the global money laundering and financing watchdog, the Financial Action Task Force (FATF), to remove Pakistan from its list of countries under "increased monitoring".
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 affecting Pakistani companies doing business with the 27-member bloc.
Pakistan was included on the list in 2018, placing the country under additional regulatory restrictions.
The list includes countries that the European Union considers to have strategic deficiencies in their anti-money laundering and counter-terrorism financing frameworks.
Prime Minister Sharif in a Twitter post said that the decision would facilitate the country's businesses, individuals and entities.
"De-listing of Pakistan from EU's updated list of high-risk third-countries is a major development which would facilitate our businesses, individuals and entities," the Pakistan leader tweeted.
PM Shehbaz also said it was a reflection of the government's unwavering resolve to further strengthen the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime.
According to the Delegated Regulation, following the measures implemented to address the action plans agreed with the Financial Action Task Force (FATF), Nicaragua, Pakistan and Zimbabwe remedied the strategic deficiencies in their respective AML/CFT regimes and no longer pose a significant AML/CFT threat to the international financial system.
Pakistan's Ministry of Commerce said the EU member states' "Obligated Entities" will no longer be required to apply "Enhanced Customer Due Diligence" while conducting transactions with individuals and legal entities established in Pakistan.
The entities include credit institutions, financial institutions, auditors, external accountants, tax advisors, notaries, independent legal professionals (acting on behalf of and for their client in any financial or real estate transaction), estate agents and individuals trading in goods.
Pakistan's exclusion from the list 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 the EU, according to the ministry statement.
Foreign Minister Bilawal Bhutto Zardari in a statement said that it would help Pakistan's economy.
"Pakistani businesses and individuals would no longer be subjected to enhanced customer due diligence by European legal and economic operators," he added.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)