ISLAMABAD: The Federal Board of Revenue (FBR) has granted enhanced powers to Inland Revenue (IR) officers to closely monitor transactions conducted by jewelers, real estate agents, and accountants in an effort to curb money laundering activities.
The FBR, through SRO 1319(I)/2020 dated December 10, 2020, has officially authorized IR officers to exercise the powers granted under Section 6A of the Anti-Money Laundering Act, 2010. This move aligns with Pakistan’s commitment to meeting the conditions set by the Financial Action Task Force (FATF), which has kept the country on its “grey list” due to concerns regarding anti-terrorism financing measures.
Recognizing the need to comply with FATF regulations, the FBR has taken significant steps, including the establishment of the Directorate General of Designated Non-Financial Businesses and Professions (DNFBPs). The headquarters for this directorate is based in Islamabad, with field formations set up in key cities such as Quetta, Gilgit-Baltistan, Lahore, and Karachi. IR officers will play a pivotal role in ensuring compliance with these regulations.
Under these new regulations, every DNFBP, including real estate agents, jewelers, and accountants, must register with the FBR. IR officers will oversee the process, ensuring that all required documentation, including criminal records of senior management and beneficial owners, is submitted. In cases where a DNFBP ceases operations, it must notify the FBR within 30 business days to initiate deregistration.
IR officers are also tasked with ensuring that DNFBPs maintain transaction records as stipulated in Section 7C of the Anti-Money Laundering Act. These records must include transaction details, customer identification data, and financial documentation, all of which must be preserved for at least five years after a business relationship is terminated. If a case is under litigation, records must be retained until legal proceedings are resolved.
Moreover, IR officers are responsible for enforcing Customer Due Diligence (CDD) protocols as outlined in Section 7A(1) of the AML Act. This applies to real estate agents involved in property transactions, jewelers handling cash transactions of Rs. 2 million or above, and accountants engaged in financial transactions specified under the AML Act.
By equipping IR officers with expanded authority, the FBR aims to strengthen Pakistan’s anti-money laundering framework, ensuring greater transparency in high-risk sectors and enhancing the country’s chances of being removed from the FATF “grey list.”