ISLAMABAD: Federal Board of Revenue (FBR) has been empowered to share information of civil servants with commercial banks in Pakistan.
In this regard, the FBR issued SRO 80(I)/2022 on February 01, 2023 to notify rules called “the Sharing of Declaration of Civil Servants Rules, 2023.
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According to the FBR, the rules would apply for sharing of information with banking companies as defined under sub-section (7) of Section 2 of the Income Tax Ordinance, 2001. However, these rules shall apply for limited purpose of sharing of information in respect of civil servants in BS-17 to BS-22.
The FBR further stated that it would share a simplified or abridged version of declaration, based on the fields agreed with the State Bank of Pakistan (SBP), made by a civil servant in his electronic declaration filed with the FBR.
The banks shall require to seek information of civil servants in a prescribed manner.
However before generating request seeking information from the FBR for Customer Due Diligence (CDD), the banks shall take following steps –
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(a) the bank shall determine in writing the reasons for which CDD requires that the information from FBR is to be accessed (the decision of the bank);
(b) the bank shall obtain an express written consent from the civil servant of whom the bank intends to access information from FBR; and
(c) the bank shall obtain a certificate from the civil servant as per prescribed format annexed duly signed by the person declaring that he is a civil servant of BS-17 and above, with his complete name, designation, employee number and all other particulars that are prescribed in the format.
The Focal Person of the bank shall send the authorized email to the FBR seeking provision of information and follow the procedure as under –
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(a) send a scanned copy of the decision of the bank as referred in clause (a) of sub-rule (l) of rule 5;
(b) send a scanned copy of the express written consent as referred in clause (b) of sub-rule (1) of rule 5; and
(c) send a scanned copy of certificate prescribed under clause (c) of sub-rule (l) of rule 5.
The FBR shall provide simplified or abridged information, within five working days through the authorized email, or may refuse in case information is not available or cannot be provided due to any reason. In case of dispute, the decision of FBR shall prevail being custodian of information.
The FBR shall have a dedicated Banks’ CDD desk assigned to an authorized officer supported by designated officials to deal with the information requests from the banks.
The FBR may use other secured electronic access and transmission methods as available from time to time like a dedicated portal page.
The responsibilities of banks under these rules are:
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1) The bank shall abide by sub-section (7) of section 216 of the Ordinance in respect of information received from FBR.
(2) The bank shall provide bi-annual feedback on the use of information received by the bank as well as on the outcome of CDD in terms of success of new accounts opened and how the information helped the bank in establishing its client relationship. Case-wise feedback to be provided by 31st July and 31st of January of every year of preceding six months’ information requests made by the bank.
(3) The bank shall retain the hard copies of documents as mentioned in sub-rule (1) of rule 5 and shall produce to the State Bank of Pakistan (SBP) for the purpose of compliance audit of the steps required under sub-rule (l) of rule 5.
(4) The compliance audit shall be undertaken by the SBP once a year unless specifically asked by FBR on case to case basis.