ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday issues regulations for exercising powers to monitor transactions by jewelers, real estate agents and accountants to check dirty money.
The FBR issued SRO 1319(I)/2020 dated December 10, 2020 to empower officers of Inland Revenue to exercise powers conferred by Section 6A of Anti-Money Laundering Act, 2010.
Regulating jewelers, real estate and accountants is one of the conditions set by Finance Action Task Force (FATF). The global dirty money watchdog on October 23, 2020 decided to keep Pakistan on its “grey list”, despite progress by the country on meeting international anti-terrorism financing norms.
The FBR as an important government organ also accelerated its efforts to help the country to meet required conditions of the FATF to make entry in white list.
Through an office order on November 11, 2020 the FBR approved operationalization of Directorate General of Designated Non-Financial Business and Professions (DNFBPs), with its headquarters at Islamabad.
The Designated Non-Financial Businesses and Professions (DNFBPs) are real estate agents, jewelers and accountants.
Through SRO 1319(I)/2020 dated December 10, 2020, the FBR said that directorate general DNFBPs established for performance of functions under Section 6A of the Anti-Money Laundering Act, 2010, shall consist of: Director General; Directors; Additional Directors; Deputy Directors; Assistant Directors; and Inland Revenue Audit Officers, Inland Revenue Officers, Superintendents and Deputy Superintendent Inland Revenue, Senior Auditors Inland Revenue, Inspectors Inland Revenue and Officers of Inland Revenue with any other designation.
The FBR sets up field formations at Islamabad, Quetta, Gilgit-Baltistan, Lahore and Karachi.
The FBR issued SRO 924(I)/2020 dated September 30, 2020 to comply with the conditions under FATF.
Under the 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.
