Tag: money laundering

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SBP directs MFBs to ensure verification of customers

KARACHI: State Bank of Pakistan (SBP) on Tuesday issued orders to microfinance banks (MFBs) to ensure verification of customers in order to mitigate various risks arising from money laundering and financing terrorism.

A circular issued by the central bank referred it previous instructions issued through Circular No. 02 dated October 05, 2018 to mitigate various risks arising from money laundering and financing of terrorism.

As stipulated under Regulation M-1, ongoing Customer Due Diligence (CDD) is an essential aspect of effective KYC/CDD procedures and applies to all customers to whom the MFB is offering any type of service(s).

Accordingly, it is reiterated that MFBs must ensure strict observance of all applicable instructions including identification and verification of customers and their beneficial owner(s) and obtain information on the purpose and intended nature of business relationship.

The monitoring mechanism in place at MFBs should be adequately resourced and strengthened to ensure that the transactions being conducted in the accounts are consistent with the MFB’s knowledge of their customer, business, risk profile and the source of funds.

With the objective to know the ultimate beneficial ownership of accounts/ transactions, the MFBs shall enhance their efforts to obtain relevant information and examine background and purpose of all complex, unusual large transactions and unusual patterns of transactions, which do not commensurate with customer profile or have no apparent economic or visible lawful purpose.

MFBs are also advised to refer to the SECP Circular No. 16 of 2018 dated August 29, 2018 (https://www.secp.gov.pk/laws/circulars/) through which the Commission has directed all companies to enhance their efforts to obtain and maintain up-to-date information relating to their ultimate beneficial owners, i.e. natural persons or individuals who ultimately own or control the company.

Therefore, MFBs may also seek such ultimate beneficial ownership information from their relevant customers during the CDD process.

Moreover, with the view to further strengthen the measures already in place and mitigate the money laundering and terrorist financing risks, MFBs are advised to immediately take following steps:

a) Ensure optimal utilization of biometric technology and carry out biometric verification of the existing customers (if already not done) as per following timelines and thresholds:

Priority	Category of Customers	Threshold	Timeline
High Priority	Listed /Public Limited Companies	Account turnover exceeding PKR 1,000 million for any of the calendar year 2017, 2018 or for a period since January 1, 2019 to September 30, 2019.	31st January, 2020
Private Limited Companies	Account turnover exceeding PKR 500 million for any of the calendar year 2017, 2018 or for a period since January 1, 2019 to September 30, 2019.
All customers except Public/Private Limited Companies	Account turnover exceeding PKR 250 million for any of the calendar year 2017, 2018 or for a period since January 1, 2019 to September 30, 2019.
Medium Priority	Listed /Public Limited Companies	Account turnover from PKR 500 million to PKR 1000 million for any of the calendar year 2017, 2018 or for a period since January 1, 2019 to September 30, 2019.	31st March, 2020
Private Limited Companies	Account turnover from PKR 250 million to PKR 500 million for any of the calendar year 2017, 2018 or for a period since January 1, 2019 to September 30, 2019.
All customers except Public/Private Limited Companies	Account turnover from PKR 100 million to PKR 250 million for any of the calendar year 2017, 2018 or for a period since January 1, 2019 to September 30, 2019.
Normal	All other accounts not covered in the above categories	30th June, 2020

Note

Biometric verification of persons authorized to open and operate the account of legal entities or legal arrangements shall be conducted.

In case of customers whose eligible identity documents are other than biometrically verifiable documents, re-validation/ verification of identity shall be done based on documents, data or information obtained from customer and/or from reliable and independent sources having regard to MFB’s own assessment of materiality and risk.

Submit compliance status in respect of biometric verification of their existing/legacy portfolio of customers within 15 days of aforesaid timelines.

Furthermore, MFBs are advised to adhere to the following instructions regarding biometric verification of existing customers presently outside Pakistan:

	Type of Customer	Treatment
a)	Non-resident Pakistanis (NRPs) As defined in Income Tax Ordinance, 2001 – Chapter 5, Division II, Section 82	For customers who fall under the definition of NRP, the MFB may obtain a signed undertaking from the customer invariably containing the following: • Customer’s NRP status along with proof (i.e. copy of valid passport, visa, exit stamp, resident permit, etc.). • Copy of valid identity document. • Account number(s) of the customer’s account(s) maintained with the bank as per customer record. • Undertaking by the customer to inform the bank of any change in residency status. The MFB, after verification of the customer’s signature from its record, shall accordingly update/ reflect the NRP status in the customer profile. For such customers, as an alternative to biometric verification, the MFB may conduct fresh NADRA Verisys using the information provided by the customer.
b)	Resident Pakistanis temporarily outside Pakistan	For customers who do not qualify under the definition of NRP, but are currently/ temporarily outside Pakistan for any reason, the MFB may obtain reasonable evidence/ proof from the customer regarding his/ her absence from the country (i.e. copy of valid passport, visa, exit stamp, resident permit, etc.) and the expected date of return. For such customers, as an alternate to biometric verification, the MFB may conduct fresh NADRA Verisys using the information provided by the customer. The MFB may retain the NADRA Verisys in place of biometric verification until the customer returns, subject to reasonable time limit (not more than six months) to be defined by MFB. Biometric verification of such customers shall be done immediately upon the customer’s return to the country.
c)	Joint Accounts where one account holder is outside Pakistan (NRP/ temporarily)	For joint account holders, treatment of biometric verification should be done according to the status of respective individual. Biometric verification should be conducted for the joint account holder who is resident Pakistani, while for other joint account holders, the relevant procedure described at (a) and (b) above should be adopted.

Moreover, MFBs may operate accounts on the basis of NADRA Verisys in genuine cases, in line with Frequently Asked Questions (FAQ No. 8, Annexure – I) on Use of Biometric Technology, provided MFBs are satisfied and proper reason/ proof is recorded/ retained by them.

For such cases in line with Para-7 above, in the absence of biometric verification, MFB may ensure that requisite identification document has been obtained, marked as ‘original seen’ by their staff and verified through NADRA Verisys.

Moreover an undertaking should be obtained from the customer declaring that the particulars provided to the MFB are correct and that their staff has verified the same. The declaration should be endorsed by the Branch Manager and should be available in the bank’s centralized record.

December 31, 2019

Law drafted to examine national saving schemes investments for money laundering, terror financing

ISLAMABAD: The government has draft law to examine involvement of money laundering and terror financing in investment made in national saving schemes.

The ministry of finance on Thursday issued draft rules namely National Saving Schemes (AML and CFT) Rules, 2019.

Under the draft rules, the Central Directorate of National Savings (CDNS) would conduct customers due diligence (CDD) of all the customers / investors.

“Every customer, whether permanent or occasional and whether natural or legal person or legal arrangement, shall be identified for establishing business relationship and for the purpose following information shall be obtained, verified using reliable, independent source documents, data or information and recorded namely: –

(a) full name as per identity or registration documents;
(b) national identity card, passport, national identity card for overseas pakistanis, Pakistan origin card or alien registration card number, etc.
(c) registration or incorporation number of business, if applicable;

(d) residential address, telephone numbers and e-mail, if available;

(e) business address, telephone numbers and e-mail, if available;

(f) date of birth;

(g) date and place of registration or incorporation of business, if applicable;

(h) nationality

(i) place of birth;

(j) national tax number (NTN), if applicable;

(k) nature of business and location, if applicable;

(l) sources of earnings;

(m) customer’s net worth in respect of legal persons, legal arrangements and high risk customers; and

(n) annual income

The minimum set of documents to be obtained by the office of issue or third party in case of each category of customers shall be as follows:-

(a) In respect of individuals, a photocopy of any one of the following valid identity documents namely:-

(i) computerized national identity card (CNIC) issued by NADRA; or

(ii) national identity card for overseas Pakistani (NICOP) issued by NADRA; or

(iii) Pakistan origin card (POC) issued by NADRA; or

(iv) alien registration card (ARC) issued by NADRA; or

(v) passport having valid visa on it or any other proof of legal stay along with passport in respect of foreign national individuals only.

(b) In respect of limited corporations and companies.-

(i) certified copies of-

(A) resolution of board of directors for opening of account specifying the persons authorized to open and operate the account (not applicable for single member company);

(B) memorandum of association;

(C) articles of association, wherever applicable;

(D) certificate of incorporation;
(E) Securities and Exchange Commission of Pakistan (SECP) registered declaration for commencement of business as required under the Companies Act, 2017 (XIX of 2017); and

(F) list of directors required to be filed under the Companies Act, 2017 (XIX of 2017), as applicable;

(ii). photocopies of identity documents as per sub-clause (b) of all the ` directors and persons authorized to open and operate the account;

(c) In respect of trust clubs, societies and associations, etc.-

(i) Certified copies of-

(A) certificate of registration or instrument of trust; and

(B) by-laws, rules and regulations;

(ii) resolution of the governing body, board of trustees or executive committee, if it is ultimate governing body, for opening of account authorizing the person to operate the account;

(iii). photocopy of identity document as per sub-clause (i) of clause (c) of the following:

(A) authorized persons;

(B) members of governing body, board of trustees or executive committee, if it is ultimate governing body; and

(C) settlor, the trustees, the protector if any, the beneficiaries or class of beneficiaries

(d) In respect of NGOs, NPOs and charities,-

(i) certified copies of –

(A) registration documents and certificates; and

(B) by-laws, rules and regulations;

(ii) resolution of the governing body, board of trustees or executive committee, if it is ultimate governing body, for opening of account authorizing the persons to operate the account;

(iii) photocopy of identity document as per sub clause (i) of clause (d) above of the authorized persons and of the members of governing body, board of trustees or executive committee, if it is ultimate governing body; and

(iv) any other documents as deemed necessary including its annual accounts and financial statements or disclosures in any form which may help to ascertain the detail of its activities, sources and usage of funds in order to assess the risk profile of the prospective customer;

(e) In respect of minor accounts,-

(i) photocopy of Form-B or birth certificate of the minor; and

(ii) photocopy of identity document as per sub-clause (i) above of the guardian of the minor;

(f) In respect of government institutions and entities not covered herein above.-

(i) CNICs of the authorized persons; and

(ii) letter of authorization from the concerned authority.

the office of issue or third party shall verify identity documents of the customers from relevant authorities and bodies, including through NADRA’s verification system or biometric identification system and, where necessary, use other reliable, independent sources and retain copies of all reference documents used for identification and verification.
The office of issue or third party shall be responsible for verification of the identity documents and the customer shall neither be obligated nor the cost of verification be charged to the customer.

Where the customer is represented by an authorized agent or representative, or where customer is a legal person, the Office of issue or third party shall identify the natural persons who act on behalf of the customer and verify the identity of such persons and the authority of such natural persons shall be verified through documentary evidence, including specimen signature of the persons so authorized.

Where beneficial owner is different from the customer, the office of issue or third party shall identify and take reasonable measures to verify identity of the beneficial owners using relevant information or data obtained from a reliable source, to the satisfaction of the office of issue.

The verification of the identity of customers and beneficial owners, if any, shall be completed before business relations are established.

The office of issue shall conduct ongoing due diligence on the business relationship, including;-

(a) scrutinizing transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the office of issue’s knowledge of the customer, their business and risk profile, including where necessary, the source of funds; and

(b) ensuring that documents, data or information collected under the CDD process is kept up-to-date and relevant, by undertaking reviews of existing records, particularly for higher risk categories of customers.

The office of issue or third party shall maintain a list of all such customers and accounts where the business relationship needed to be closed on account of negative verification that includes all type of customer identity verification such as NADRA, UNSCR or any other document or information etc.

December 19, 2019
FBR starts air travelers’ monitoring to detect money launderers, drug smugglers

ISLAMABAD: Federal Board of Revenue (FBR) has launched passenger profiling system at international airports to curb money laundering and drug smuggling.

A statement on Thursday said that Pakistan Customs, a wing of the FBR, has launched a specialized Risk Management System for passenger profiling at all major international airports in Pakistan.

This exercise is part of the Customs Border Management Initiative (BMI) recently approved by the prime minister.

The Passenger Profiling System, “Global Travelers Assessment System” (GTAS) is now operational at seven major airports of the country for which Customs staff has been adequately trained.

Moreover, World Customs Organization (WCO) and US Customs and Border Protection (US CBP) have provided Technical assistance for deployment and implementation of the project.

The system is capable of carrying out passenger profiling and targeting through Advance Passenger Information (API) and Passenger Name Record Information (PNR) for interdiction of suspected travelers, drug smugglers and money-launders etc. while adhering to the requirements of FATF action plan.

It will also help in creating profiles of passengers travelling to and from Pakistan and generate risk indicators in advance using a proactive methodology for effective border management.

According to Chairman FBR Syed ShabbarZaidi, the GTAS will also enable Customs to achieve the “Invisible Customs approach” with least presence at airports while facilitating the genuine passengers.

The Chairman has also directed Member Customs Operations to ensure adequate training sessions for customs officers while initiating data sharing with border agencies which will serve as a targeting portal for all law enforcement agencies at Pakistan Customs National Targeting Centre.

November 21, 2019
Jewelers, real estate agents to maintain register, report suspicious transactions: draft rules issued

ISLAMABAD: Federal Board of Revenue (FBR) has proposed to make mandatory for jewelers and real estate agents to report suspicious transactions. In this regard the FBR issued draft rules through SRO 1320(I)/2019 to make amendments in Income Tax Rules, 2002.

As per the draft rules, the designated persons as jewelers and real estate agents should maintain documents and records, where the value of transaction exceeds Rs2 million in case of immovable properties and Rs one million in other cases.

The FBR said that the designated persons would require to obtain and maintain the following relating to its buyers and sellers, namely:

In case of an individual any of the following documents should be obtained by jewelers and real estate agents:

i. copy of computerized National Identity Card (CNIC) issued by National Database and Registration Authority (NADRA).

ii. copy of National Identity Card for Overseas Pakistanis (NICOP) issued by NADRA.

iii. copy of Pakistan Origin Card (POC) issued by NADRA.

iv. copy of Alien Registration Card (ARC) issued by NADRA, and

v. copy of passport, having valid visa on it or any other proof of legal stay along with the passport (foreign nationals only).

The jewelers and real estate agents also required to keep a list of all such customers where the business transaction was refused or needed to be closed either on account of failure of the customer to provide the relevant documents or the original documents for viewing as required.

Regarding furnishing of information, according to the draft rules, the sale and purchase register for the immediately preceding calendar month shall be uploaded by the designated persons on the IRIS online system within 15 days of the end of the preceding calendar month for transactions.

The draft rules said that the designated persons would mark a transaction as suspicious in the IRIS online system if the person has reason to believe that the transaction or a pattern of transactions of which the transaction is a part:

(a) involves funds derived otherwise than from the business activity or assets declared to the income tax authorities;

(b) is designed to evade any requirement of the Income Tax Ordinance, 2001 or to conceal the beneficial owner or his activity.

(c) has no apparent economic or lawful purpose after examining the available facts, including the background and possible purpose of the transaction; or

(d) involves financing of terrorism, including fund collected, provided, used or meant for, or otherwise linked or related to, terrorism, terrorist acts or organization and individual concerned with terrorism.

According to the draft rules, the designated persons have also been asked to mark as suspicious transaction if the buyer or seller –

(a) frequently changes bank accounts;

(b) uses a bank account other than an account maintained in the name of beneficial owner;

(c) makes or receives payment in cash or primarily in cash; or

(d) maintains a creditor or debtor account with the designated person and instructs the designated person to adjust the balance of his account against a creditor debtor account of another buyer or seller.

November 9, 2019
SBP emphasizes more efforts for taking Pakistan out of FATF grey list

KARACHI: Dr. Reza Baqir, Governor State Bank of Pakistan (SBP) on Monday emphasized on putting more effort against money laundering and terrorist financing to ensure that Pakistan is out of grey list in the next meeting of FATF.

While inaugurating the conference on Anti-Money Laundering (AML)/ Combating Financing of Terrorism (CFT) and Trade-Based Money Laundering (TBML), Dr. Reza Baqir, Governor State Bank stated that significant progress has been made between May and September 2019 to meet the action plan items set by Financial Action Task Force (FATF) in different areas to demonstrate effectiveness of AML safety regime of Pakistan.

There was a major rethink of the approach being taken by the authorities in early to mid 2019. Consequently, a number of steps were taken to significantly strengthen our approach to making progress on these issues.

He however, stressed for the need of putting more effort to make progress on remaining areas to ensure that Pakistan is out of grey list in the next meeting of FATF.

He was speaking to the conference conducted by SBP and Asian Development Bank today at SBP, Karachi in a collaborative effort to mitigate the risks of money laundering and financing of terrorism.

Speaking at the conference, the Governor informed the audience that since the grey-listing, State Bank has arranged many AML/CFT outreach and awareness programs for its regulated entities and stakeholders and that the conference is a useful platform to understand the AML/CFT challenges being faced globally and the best practices followed in mitigating such challenges.

In the context of implementing AML/CFT requirements, the Governor urged the financial sector to make efficient use of technologies for assessment of risks, controls and ongoing monitoring of financial transactions and enhance capacity by continuous training of their employees.

Dr. Baqir emphasized that trade based money laundering poses complex and sophisticated challenges and that SBP inspection teams conducted thematic inspections of banks with respect to export and import of specific goods.

He also referred to State Bank’s framework for managing risks of trade based money laundering and terrorist financing which has been issued to encourage authorized dealers (banks) to effectively manage the trade based money laundering and terrorist financing risks.

Ms. Xiohang Yang, Country Director ADB, and Mr. Mohsin Ali Nathani, President & CEO HABIBMETRO Bank also spoke on the occasion. Ms. Yang stated that ‘AML/CFT is a critical issue for trade finance, which is why ADB’s Trade Finance Program is playing an increasing role in this space. She stated that ADB has a strong commitment to work with Pakistan’s banking sector and the SBP on this issue.

Ms. Yang further stated that the FATF has identified enhanced capacity building/training in AML/CFT as an immediate priority requirement and they are pleased to partner with the SBP and thankful to HABIBMETRO Bank for organizing the same.

Mohsin Ali Nathani, President & CEO HABIBMETRO Bank while addressing the conference added, ‘Enhancement of AML & CFT efforts through increased awareness and strengthened systems, controls and processes is imperative for our country and the banking sector. HABIBMETRO Bank is pleased to organize this conference and bring together relevant stakeholders from the region, regulator and banking sector to re-affirm our collective commitment to mitigating the risks of Money Laundering and Terrorism Financing.’

During the conference several prominent speakers and panelists discussed the requisites and obligations with regard to AML and CFT, including Terrorism Financing Risk Assessments, Transnational Risks in Trade Based Money Laundering (TBML), risks posed by DNFBPs & NPOs and Ultimate Beneficial Ownership.

The conference also included a detailed discussion on the impact of Trade Based Money Laundering and the repercussions of the same for the banking sector especially in the context of grey listing.

The conference was organized by HABIBMETRO Bank and attended by the Deputy Governor State Bank of Pakistan, Country Head Asian Development Bank and international experts in the field of AML/ CFT and trade from the United States, Australia and UAE.

Participants included CEOs and senior management of Banks, DFIs, Microfinance Banks and Exchange Companies and representatives from the SBP, Financial Monitoring Unit (FMU) and Securities & Exchange Commission of Pakistan (SECP).

October 29, 2019
FBR may get trade details of past five years from customs clearing agents

In a bid to strengthen efforts against money laundering and enhance transparency in trade transactions, the Federal Board of Revenue (FBR) is reportedly considering a directive to customs clearing agents to furnish details of importers and goods declarations filed over the past five years.
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October 27, 2019
FATF gives Pakistan four months to comply with action plan

ISLAMABAD: Financial Action Task Force (FATF) on Friday set a deadline of four months for Pakistan to improve action plan against laundering and terror financing.

At a press conference in Paris, France the officials of FATF expressed concerns over implementation of action plan by the Pakistani authorities.

FATF strongly urged Pakistan to swiftly complete its full action plan by February 2020. Otherwise, should significant and sustainable progress not be made across the full range of its action plan by the next Plenary.

It has been observed that action taken by Pakistan was not sufficient to address its Terror Financing risks. These include remaining deficiencies in demonstrating a sufficient understanding of Pakistan’s transnational Terror Financing risks.

Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the terror financing risks emanating from the jurisdiction.

To date, Pakistan has only largely addressed five of 27 action items, with varying levels of progress made on the rest of the action plan.

In a statement, the ministry of finance said that the FATF Plenary meeting was held in Paris from 13-18 October 2019. The Pakistan delegation was led by Muhammad Hammad Azhar, Minister for Economic Affairs Division.

The FATF meeting considered Pakistan’s progress report on the FATF Action Plan and Pakistan’s APG Mutual Evaluation report (MER).

Pakistan’s delegation reaffirmed its political commitment to fully implement the Action Plan.

The Plenary meeting decided to maintain status quo on the FATF Action Plan and allow the usual 12 months observation period for the APG MER.

The delegation also held sideline meetings with various delegations and briefed them about the progress made by Pakistan on the FATF Action Plan and steps taken for strengthening its AML/CFT framework.

A session on technical assistance and training needs of Pakistan was also organized in collaboration with UNODC and APG Secretariat which was attended by a number of interested countries and multilateral agencies including China, USA, UK, Canada, Japan, EU, World Bank, IMF, ADB, and UNODC.

October 18, 2019
Open account, advance payments considered as higher risk transactions for trade based money laundering

KARACHI: State Bank of Pakistan (SBP) has advised financial institutions dealing foreign exchange to enhance due diligence on higher risk transactions to stop trade based money laundering.

The SBP on Tuesday issued Framework for Managing Risks of Trade Based Money Laundering and Terrorist Financing and said that banks and financial institutions should ensure that high risk transactions in the area of trade business are subject to more extensive due diligence and are escalated, where required, to the higher management.

ii. In this respect, following transactions may have higher Money Laundering/Terror Financing risks and may be considered for Enhanced Due Diligence (EDD):

a) Open Account

b) Advance Payments (Import & Export of Goods)

c) Import/Export of Services

d) Import/Export of Free of Cost Goods

e) Trade transactions with related party

f) Import of goods that are exempt from import related duties

g) Import of goods that are subject to over 25% import duties

h) Export of goods on which export related rebates are allowed by the Government of Pakistan

i) Where an exporter allows trade discounts to the same importer consistently by the way of deduction of amount of discount from the proceeds of export bills.

j) Trade transaction of sole proprietorship or partnership concern received by centralized trade processing unit from a different branch of an AD with whom their relationship is not generally associated or frequent switching of branch for trade transactions by such concerns.

k) Trade transactions with high-risk jurisdictions or jurisdictions with lax AML/CFT regulations and implementations

l) Outward remittance from personal FCY account of the importer

m) Unusually relaxed terms for settlement of counter value both for exports as well as imports e.g. no specific timeline for shipment of goods against exports advance payment, extended credit period for payment against import of goods especially between unrelated parties.

Due weightage shall be given by authorized dealers to the risk rating of the customer while allowing high-risk transactions.

In this respect, a criteria shall be developed by the ADs whereby transactions falling in high-risk category specifically Advance Payments (Import & Export), where clients have outstanding overdues/poor performance history, shall be escalated to the higher management for taking appropriate decision about the fate of transactions.

In case of recurrence of non-performance post allowing the transaction, the higher management of financial institutions may subject the customer to enhance/continuous monitoring.

However, in case of persistent non-performance during the period in which the customer has been subjected to enhance/continuous monitoring, the AD may evaluate the transaction for filing an Suspicious Transaction Report (STR) with Financial Monitoring Unit (FMU) if they have sufficient grounds to form suspicion that the customer is using trade transaction to launder money, finance terrorism etc. ADs, in such circumstance, should also evaluate the risks of continuing relationship with the customer.

Notwithstanding the above, even if the senior management of ADs on the matter escalated to it does not find sufficient grounds for filing of an STR, they may consider subjecting the customer to enhanced/continuous monitoring.

October 16, 2019
SBP issues framework for controlling trade based money laundering, terror financing

KARACHI: The State Bank of Pakistan (SBP) on Tuesday issued framework for controlling trade based money laundering and terror financing.

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.

October 15, 2019
Finance Bill, 2019: 10 years imprisonment for money laundering through foreign trade

KARACHI: In a determined effort to combat money laundering through foreign trade, the government has unveiled strict measures, including up to 10 years imprisonment for offenders and the confiscation of implicated consignments. These proposed reforms are detailed in the Finance Bill 2019, aiming to amend the Customs Act, 1969.
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June 16, 2019

Tag: money laundering

Dr. Baqir emphasized that trade based money laundering poses complex and sophisticated challenges and that SBP inspection teams conducted thematic inspections of banks with respect to export and import of specific goods.