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Author: Mrs. Anjum Shahnawaz

  • List of customer information to be verified by banks under latest AML regulations

    List of customer information to be verified by banks under latest AML regulations

    KARACHI: The State Bank of Pakistan (SBP) on Wednesday issued the Anti-Money Laundering, Combating the Financing of Terrorism & Counter Proliferation Financing (AML/ CFT/ CPF) Regulations for banks and other financial institutions, which shall supersede previous regulations/instructions.

    Under the new regulations, the SBP issued the list of information, which the banks and financial institutions shall require to verify customer identity.

    List of Information Required for Customer Identity

    A. Basic Identification Information

    1. Full name as per identity document

    2. Mother Maiden name

    3. Date of Birth

    4. Place of Birth

    5. Permanent Address

    6. Identity document number, whichever applicable

    7. Date of expiry of applicable identity document

    B. Other basic information

    8. Father/ spouse name as per identity document

    9. Date of issuance of applicable identity document

    10. Contact Number: Mobile Number (s)/ Land Line Number

    11. Purpose of account/ transaction/ business relation

    12. Beneficial ownership/ controlling rights

    C. Other relevant Information for natural persons, as applicable

    13. Current/ Mailing Address

    14. Personal Email Address (as applicable)

    15. Nationality – Resident/ Non-Resident Status

    16. FATCA/ CRS Declaration, wherever required

    17. Profession/ Source of Income/ Funds: Salary, Business, investment income

    18. Next of Kin

    19. Attested Passport Size Photo (in case of Photo Account instructions)

    20. Live Photo (in case of digital onboarding)

    D. Information for Legal Persons/ Legal Arrangements

    1. Registration/ incorporation number or business registration number (as applicable)

    2. Date of incorporation or registration of legal person or arrangement (as applicable)

    3. Place of incorporation or registration of legal person or arrangement (as applicable)

    4. National Tax Number (NTN)

    5. Nature of business, geographies involved and expected type of counter-parties (as applicable)

    6. Registered or business address

    7. Intended nature of business relations

    8. Purpose of account or transaction (where accounts are not maintained and transactions are done by walk in/ occasional customers)

    9. Type of account/ financial transaction/ financial service

    10. Expected monthly credit turnover (amount and No. of transactions)

    11. Normal or expected modes of transactions/ delivery channels

    12. Wherever instructed/ advised, regulatory limits imposed such as: credit and debits/ deposit and withdrawals/ execution of financial transaction/ types of financial services allowed/ restricted.

    E. Additional Information in case of ”Trusts”

    13. Whether the Trust is a Public Trust or Private Trust including foreign and national trust

    14. Trust Deed whereby the Trust has been created;

    15. Details of Settlor (this will also be available in the Trust Deed);

    16. Objects of the trust (this will also be available in the Trust Deed);

    17. Trustee of the trust (whether trustee is associated person of the settlor);

    18. Description of each class or type of beneficiary (this information may also be checked from Trust Deed);

    19. Details of any possibility of influence of any other person on trustee regarding management and control of trust property;

    20. In the case of “Private Trust” if the beneficiary of a trust is also the beneficial owner of the trust, identification and verification of the beneficiary is required otherwise the name and CNIC of each beneficiary of a trust should be obtained.

  • ECC approves retrenchment plan of Pakistan Steel Mills

    ECC approves retrenchment plan of Pakistan Steel Mills

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved the retrenchment plan of Pakistan Steel Mills (PSM). Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the ECC meeting at the Cabinet Division.

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  • Stock market ends down by 633 points on political noise

    Stock market ends down by 633 points on political noise

    KARACHI: The stock market fell by 633 points on Wednesday owing to selling pressure observed during the day due to political noise and pressure in international markets.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,571 points as against 41,204 points, showing a decline of 633 points.

    Analysts at Topline Securities said that lackluster activity was observed during the initial hours of trade, however market came under pressure during the latter hours of trade to close at 40,571 level.

    Pressure in the market can largely be attributed to selling pressure in international markets along with political noise.

    Major contribution to the index came from UBL, HUBC, ENGRO, TRG and OGDC, as they cumulatively contributed 193 points to the index.

    HASCOL was today`s volume leader with around 87 million shares; notice to the exchange from the company disclosing that an executive of the company has sold 8.7 million shares triggered selling in the oil marketing company, as the scrip closed 7 percent lower.

  • Rupee gains 18 paisas against dollar on inflows

    Rupee gains 18 paisas against dollar on inflows

    KARACHI: The Pak Rupee strengthened by 18 paisas against dollar on Wednesday owing to inflows of workers’ remittances and export receipts.

    The rupee ended Rs165.70 to the dollar from previous day’s closing of Rs165.88 in interbank foreign exchange market.

    Currency experts said that the rupee strengthened owing to strong inflows of the foreign currency in the shape of workers’ remittances and export receipts.

    They said that the demand for the greenback was remained higher during the day for imports and corporate payments.

    The experts said that usually by quarter end the demand for the foreign currency on the higher side as foreign companies repatriate their profits to their parent companies.

    However, they said that substantial inflows helped the local units to make gain.

  • FBR to extend return filing date by one month

    FBR to extend return filing date by one month

    ISLAMABAD: Federal Board of Revenue (FBR) to extend date for filing income tax return by one month i.e. October 31, 2020, sources said on Wednesday.

    The last date for filing income tax return for tax year 2020 is expiring today evening i.e. September 30, 2020.

    The date for filing income tax return may be extended for salaried persons, business individuals, Association of Persons (AOPs) and companies having special financial year.

    The major reason for extending the date is very short time given to taxpayers to make compliance as FBR delayed the issuance of return form for tax year 2020.

    However, delayed issuance of return form for tax year 2020 by the FBR has made it difficult for taxpayers to make compliance by due date.

    Tax experts said that the taxpayers were still waiting to get withholding statements under various heads.

    They also said that the taxpayers were less bothered about the due date for filing annual returns as for the past many years the FBR used to issue return form after lapse of time and extend the date.

    Besides, tax bars are also demanding the FBR to instead extend the date the taxpayers should be given time as per law for filing their returns.

    The FBR issued a finalized income tax return form on September 08, 2020 for taxpayers, which the tax bars said the form should be issued by the start of fiscal year giving around three months to taxpayers filing their returns, whose due date is on September 30.

  • FBR issues SRO to regulate accountants, jewelers, real estate agents under AML/CFT

    FBR issues SRO to regulate accountants, jewelers, real estate agents under AML/CFT

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday issued a notification to regulate the profession/business of accountants, jewelers, real estate agents in ongoing efforts against money laundering and countering finance of terrorism.

    The regulations have been issued through SRO 924(I)/2020 dated September 30, 2020 to comply with the conditions under Finance Action Task Force (FATF), which is scheduled to meet October 2020 to evaluate Pakistan’s performance.

    The regulations are called the Federal Board of Revenue Anti Money Laundering (AML) and Countering Financing of Terrorism (CFT) Regulations for DNFBPs, 2020.

    The Designated Non-Financial Businesses and Professions (DNFBPs) are real estate agents, jewelers and accountants.

    The regulations have been issued by FBR’s FATF Cell.

    Under the new regulations, every DNFBP shall be registered with the FBR. The DNFBP shall provide any information or documentation that may be required by the Board for the purposes of registration or keeping the DNFBP registration up to date, including but not limited to criminal records of the senior management and beneficial owners.

    The DNFBP shall notify the FBR if it ceases operations as a DNFBP within thirty business days after ceasing operations, in the form and manner that may be required by the FBR, and the FBR shall deregister the DNFBP if the appropriate information is provided.

    The DNFBPs shall maintain records as set out in section 7C of the AML Act which are sufficient to permit reconstruction of individual transactions including the nature and date of the transaction, the type and amount of currency involved and the customer involved in the transaction so as to provide, when necessary, evidence for prosecution of criminal activity.

    The record may be maintained in paper or electronic form or on microfilm. The records of identifications data obtained through Customers Due Diligence (CDD), including Enhanced Due Diligence (EDD) process, including copies of identification documents, application forms, verification documents and other documents along with business correspondence, and results of any analysis undertaken shall be maintained for a minimum period of five years after the business relationship is terminated.

    The DNFBPs shall retain such records till disposal of case where transactions, customers or instruments are involved in litigation or the same are required by a court of law or other competent authority, the DNFBP shall retain such records until such time as the litigation is resolved or until the court of law or competent authority indicates that the records no longer need to be retained.

    The DNFBP shall satisfy promptly any enquiry or order from Board, designated law enforcement Agencies and FMU, for supply of CDD information and transaction records as per the relevant provisions of AML Act.

    The DNFBPs shall conduct CDD in the circumstances and matters set out in section 7A(1) of the AML Act when they engage in the following activities, namely:-

    Real Estate Agents- when they are involved in transactions for a client concerning the buying and selling of real estate;

    Jewelers and Dealers in precious metals and stones – when they engage in any cash transaction with a customer or client equal to or above Rs. 2 Million; and

    Accountants when they prepare for, or carry out, transactions for their clients concerning the activities described in section 2(xii)(c) and (d) of the AML Act.

    The DNFBP shall identify the customer whether entering into a business relationship or conducting an occasional transaction, and whether natural or legal person or legal arrangement and verify that customers identity using reliable, independent sources documents, data or information as required under these regulations.

    The DNFBP shall identify the beneficial owner and take reasonable measure to verify the identity of the beneficial owner by using reliable and independent document, data or sources of information as set out in these Regulations, such that the DNFBP is satisfied that it knows who the beneficial owner is.

    Where the customer is represented by an authorized agent or representative, the DNFBP shall –

    Identify every person who acts on behalf of the customer,

    Verify the identity of that person by using reliable and independent documents, data or information as set out in these regulations;

    and Verify the authority of that person to act on behalf of the customer.

    For the purposes of verification of identity of customer or beneficial owner in these regulations, reliable and independent document, data or sources of information includes –

    (a) for a natural person, copy of –

    Computerized National Identity Card (CNIC) issued by NADRA; OR

    National identity card for overseas Pakistanis (NICOP) and/or duly issued machine readable passport for non resident/overseas Pakistanis or those who have dual nationalities; or

    Copy of Pakistan origin card (POC) issued by NADRA; and/or passport for Pakistanis who have given up Pakistan nationality; or Form B or smart/juvenile card issued by NADRA to children under age of 18 years; or

    Where the natural person is a foreign national, either Alien Registration Card (ARC) issued by National Aliens Registration Authority (NARA), Ministry of Interior or Passport having valid visa on it or any other proof of legal stay along with the passport.

    The DNFBPs shall apply EDD in the following circumstances, including but not limited to:

    business relationship and transactions with natural and legal persons when the risks are higher;

    business relationship and transactions with natural and legal persons from countries for which this is called for by the FATE and

    PEPs and their close associates and family members.

    EDD measures may include but shall not be limited to the following measures:

    Obtaining additional information on the customer (e.g. volume of assets, information available through public databases, internet, etc.), and updating more regularly the identification data of customer and beneficial owner;

    Obtaining additional information on the intended nature of the business relationship;

    Obtaining information on the source of funds or source of wealth of the customer;

    Obtaining information on the reasons for intended or performed transactions. Obtaining the approval of senior management to commence or continue the business relationship;

    Conducting enhanced monitoring of the business relationship, by increasing the number and timing of controls applied, and selecting patterns of transactions that need further examination.

    The record to be maintained and furnished by the Accountants, Real Estate Agents and Jewelers under these rules and as required by AML Act shall be subject to inspection by FBR, as laid down in section 6A(2)(f) of AML Act, who may be assisted by other law enforcement agencies.

    Any violation of any provision of these regulations shall be subject to sanctions issued under the AML Act.

  • KTBA advises FBR to update tax laws on its website

    KTBA advises FBR to update tax laws on its website

    KARACHI: Federal Board of Revenue (FBR) has been advised to update tax laws with latest amendments on its official website to facilitate taxpayers as well as tax practitioners.

    The Karachi Tax Bar Association (KTBA) in a letter to FBR Chairman Muhammad Javed Ghani on Tuesday pointed out that the available tax laws such as income tax, sales tax, federal excise and customs are not updated and required to insert latest amendments made through Finance Acts or other legislations.

    In the letter, KTBA President Zeeshan Merchant said that FBR had provided soft copies of certain tax laws on its official website i.e. fbr.gov.pk for the facilitation of taxpayers as well as tax practitioners.

    Merchant invited attention of the FBR chairman towards the fact that the important tax laws had been frequently amended and updated in the recent past through budgetary and other amendments. “However, it has been observed that the income tax laws as well as sales tax, federal excise and customs duty laws, which were available on the website of the FBR, have not yet been updated to incorporate such recent amendments.”

    Since up to date tax laws are presently not available on the website, the same may lead to an inadvertent mistake by the taxpayer while ensuring compliance to the relevant provisions of law.

    KTBA president said that the taxpayers should apply correct, up to date and valid laws in its true letter and spirit in order to be a compliant taxpayer.

    The FBR chairman has been urged to issue necessary instructions for the updating the important direct and indirect tax laws which are available on the FBR’s website.

  • FBR offices to remain open late hours for tax collection

    FBR offices to remain open late hours for tax collection

    ISLAMABAD: In a bid to assist taxpayers in meeting their obligations before the end of the month, the Federal Board of Revenue (FBR) has directed its Inland Revenue field offices to remain open for extended hours on Wednesday, September 30, 2020. This decision aims to facilitate the payment of duties and taxes on the last day of the month.

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  • SBP doubles loan size for setting up hospital to combat COVID

    SBP doubles loan size for setting up hospital to combat COVID

    KARACHI: State Bank of Pakistan (SBP) has enhanced loan size to Rs 1 billion from Rs500 million for setting up new hospital to combat COVID-19.

    The central bank in a notification said that in order to meet financing needs for setting up new hospitals allowed through a notification issued on July 2020, it has been decided to enhance loan size from Rs 500 million to Rs 1 billion per hospital.

    The scheme for setting up of new hospitals will remain valid up till June 30, 2021, as mentioned in Circular Letter No. 16 of 2020.

    The SBP further invited attention to to IH&SMEFD Circular No. 03 and 04 of 2020 read with IH&SMEFD Circular Letter No. 08 and 16 of 2020 and said that the applications approved by Participating Financial Institutions up till September 30, 2020 will be eligible for refinance under the scheme.

    Hence, LCs established under these approved applications will be eligible for refinance even if these LCs are established after September 30, 2020. Details of all these approved cases should be reported in weekly report of RFCC/IRFCC by 1st October, 2020.

  • FPCCI demands extending refinance scheme for three months to support employment

    FPCCI demands extending refinance scheme for three months to support employment

    KARACHI: The business community has demanded the State Bank of Pakistan (SBP) of extending refinance scheme, which was introduced to prevent layoff owing to coronavirus outbreak, for further three months.

    The Federation of Pakistan Chamber of Commerce and Industry (FPCCI) in a statement on Tuesday urged the central bank to consider extension in refinance scheme to support employees and prevent layoff of workers due outbreak of coronavirus, by December 31, 2020.

    Mian Anjum Nisar, President FPCCI while appreciating the initiative of SBP for introducing Refinance Scheme, which had helped many industrial and service oriented sectors to retain employees during Corona pandemic, stated that since the companies that availed this credit facility through banks have not been recovered from devastating economic impact of covid-19, it would be advisable if Ministry of Finance keep shouldering with SBP and extend this Scheme till end of the year.

    “In many of the countries, the second wave of Corona Virus has already started, Pakistan not being the case of exception, should be prepared to take proactive precautionary in view of increase in corona patients from 4500 in August to more than 1000 in September.

    “Therefore, discontinuation of this facility on September 30, 2020, would not serve the purposes,” added President FPCCI.

    Nisar further added that before discontinuing credit facility on concessional markup rate, Ministry of Finance and SBP need to review the prevailing economic situation closely as such the small and medium sized businesses have not been able to regain pre-corona economic stability. Further, processing of documentation and furnishing of employees’ data to avail credit facility was also a time consuming activity.

    Therefore, withdrawal of this facility at this stage would neither be in the interest of private sector nor in the interest of the Government that aimed at controlling unemployment situation in the country.

    Under the SBP’s Refinance Scheme to Support Employment and Prevent Layoff of Workers due to the impact of COVID-19, businesses that commit to not lay off workers in the next three months can avail credit through banks for the three months of wages and salaries expenses at a concessional markup rate.