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FATF Measures: Govt To Empower Private, Public Entities To Curb Money Laundering

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In a bid to effectively curb money laundering in line with the Financial Action Task Force (FATF) recommendations, the federal government has decided to grant regulatory powers to public and private bodies after amendments in the Anti-Money Laundering Act, 2010.

According to The Express Tribune, newly-added Section 6A in the AML Act would allow the government to designate the government and private entities to regulate sectors, such as housing, that are suspectable to money laundering and terror financing.

“The entities that are included in the schedule of the proposed bill are State Bank, Securities, and Exchange Commission of Pakistan, Federal Board of Revenue, National Saving Schemes Supervisory Body and Pakistan Post Office,” the report added.

“In the private sector, the Institute of Chartered Accountants of Pakistan, Institute of Cost and Management Accountants and Pakistan Bar Council are proposed to be designated as AML/CFT authorities. These private entities are defined as self-regulatory bodies.”

All these authorities are allowed to register and issue licences to ‘designated non-financial businesses and professions (DNFBPS) — housing authorities, real estate, and financial institutions and any other person designated by the federal government in the official gazette’.

They are also authorised to impose conditions on DNFBPs, including monetary and administrative penalties on directors and senior management and officers who violate section 7A to 7H. Each designated authority will also cooperate with their foreign counterparts.

According to the proposed amendments, the DNFPBS would conduct customer due diligence, if it conducts occasional transactions above the prescribed threshold, on suspicion of money laundering or terror financing.

According to the proposed amendments, it would be the responsibility of the DNFBPs to identify the beneficial owner, and in case of suspicion, it would report the transaction to the Financial Monitoring Unit. No business transactions would be allowed on fictitious names and anonymity, it added.

The government has also aligned the fines for offense of money laundering with the fines imposed under the Anti-Terrorism Act for natural persons and the maximum penalty imposed under the Companies Act for legal persons.

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Naya Daur