KARACHI: State Bank of Pakistan (SBP) on Thursday extended the date for exchange companies to submit information of customers related to anti-money laundering (AML) and Counter Financing Terrorism (CFT).
The central bank amended the Foreign Exchange Circular No. 04 dated October 14, 2019 in this regard.
The SBP said that in terms of instructions given in Para 5 (a) & (b) of the subject framework, authorized dealers in foreign exchange are required, inter alia, to complete the Risk Profiling of Customers and develop their distinct trade related Risk Profile by April 30, 2020.
In view of the prevailing circumstances due to COVID-19 outbreak and representation from the banking industry, it has been decided to extend the aforementioned deadline up to September 30, 2020.
Through the previous notification the SBP stated that in order to strengthen trade related Anti Money Laundering/Combating Financing of Terrorism (AML/CFT) regime and restrict possible misuse of banking channel, a comprehensive framework on the subject has been developed and attached herewith.
Accordingly, Authorized Dealers (ADs) are advised to upgrade their systems and controls and bring policies and procedures in line with the requirements of the framework to ensure meticulous compliance with the provisions thereof with immediate effect except as otherwise provided in the framework
The provisions of this framework are in addition to and not a replacement of already issued instructions on the subject of ML/FT risks.
Therefore, the compliance of the same shall not absolve ADs from their legal and regulatory obligations under prevailing AML/CFT laws/rules and regulations or any other relevant law in force.
ADs are also advised to educate their clients about their obligation of ensuring (a) correct declaration of particulars on the prescribed forms, (b) utilization of foreign exchange for the exact purpose for which it is acquired by them and (c) repatriation of foreign exchange that represents the full export value of goods. In the event, it is found that material information required to be submitted on the prescribed forms has been omitted or suppressed, foreign exchange is misutilized by a client of an AD or export proceeds repatriated by a client does not represent the full export value of goods, SBP shall initiate penal action against such delinquent parties under relevant provisions of the Foreign Exchange Regulation Act, 1947 (FERA).
Further, the matter shall also be reported to relevant stakeholders for necessary action under the laws being administered by them.
Failure to comply with the instructions on the subject and the regulatory obligations of AML/CFT may attract action against ADs under the FERA and other relevant laws.