Pakistan asked for more action against money laundering, terrorists financing

ISLAMABAD: The Financial Action Task Force (FATF) Asia Pacific Group has demanded more action from Pakistan to put an end to money laundering and giving financial assistance to terrorists.

The FATF has included Pakistan in its ‘Grey List’ upon failure to stop financial aid to terrorists. Pakistan and FATF’s Asia Pacific delegation recently held talks for a week and half in the capital.

According to sources, the FATF has demanded Pakistan to ‘do more’ in terms of stopping money laundering. The organisation has also expressed satisfaction over the progress made by Pakistan so far in this regard.

In the last meeting today, the FATF delegation held talks with Pakistani officials and presented them an initial report.

Sources said that the group will provide Pakistan the first report until November 19 and visit Pakistan in March or April 2019. The Asia Pacific Group will make the report related to Pakistan public in July 2019.

In this connection, the SBP has further tightened the Exchange Companies A and B categories for the compliance of government of Pakistan’s Statutory Regulatory Orders (SROs)/Notifications issued under United Nations Security Council (UNSC) Resolutions / Anti Terrorism Act (ATA), 1997.

The SBP invited the attention of the Exchange Companies and Exchange Companies of ‘B’ category towards Para 14, Chapter 6 of the Exchange Companies Manual – 2017 whereby it has been advised to ensure strict compliance of Statutory Regulatory Orders (SROs) and Notifications issued by the Government of Pakistan under the United Nations (Security Council) Act, 1948 and The Anti Terrorism Act (ATA), 1997 respectively.

SBP said that no services shall be provided to individuals designated under UNSC Resolutions or proscribed under ATA, 1997.

The company’s Information System managing the transactions shall be able to screen the designated and proscribed individual on real time basis, SBP said.

It said that the updated consolidated list of persons designated/proscribed under UNSC Act 1948 and ATA, 1997 respectively shall be updated in the company’s Information System and should be available throughout the company’s network including franchises/third party payment booths etc. SBP during the course of inspection would check the availability of these updated lists in Exchange Companies.

Unique Identification Numbers e.g. CNICs, Passports etc. available in the UNSC Sanction Lists and lists of proscribed individuals under ATA, 1997 shall be blocked in company’s information system, the SBP said adding that any similarity between the identification information of the customer and that of designated/proscribed entities and persons should be properly investigated for necessary action, as per law, including reporting to the Financial Monitoring Unit (FMU).

The SBP said special attention shall be given to the screening of remittances received from or transfer made to ‘high-risk’ jurisdictions, as identified by Financial Action Task Force (FATF).

It said internal controls shall be strengthened by means of deploying adequate systems for real time screening and allocating sufficient/trained resources to ensure meticulous compliance of TFS regime.

The SBP said antecedents of all employees, franchise owners and their employees along with the persons associated with the third party business relationships e.g. landlords, vendors etc. shall be reviewed on an ongoing basis to ensure that no designated/proscribed individual is associated/working with the Exchange Companies and Exchange Companies of ‘B’ category.

Government of Pakistan has already prescribed penalty up to Rs 10 million for non-compliance of sanctions regime under the United Nations (Security Council) Act, 1948 and the Anti-Terrorism Act, 1997, the SBP said and failure to comply with the above instructions shall also attract regulatory action under the relevant provisions of Foreign Exchange Regulation Act, 1947 in addition to penalties prescribed under other laws.

About The Author