Fresh move to check terror financing, money laundering

Published April 14, 2019
The new measures relate to SECP’s fresh guidelines on anti-money laundering (AML), combating the financing of terrorism (CFT) and proliferation financing — act of providing funds for acquiring weapons of mass destruction. ─ File photo
The new measures relate to SECP’s fresh guidelines on anti-money laundering (AML), combating the financing of terrorism (CFT) and proliferation financing — act of providing funds for acquiring weapons of mass destruction. ─ File photo

ISLAMABAD: In compliance with the requirements of the Financial Action Task Force (FATF), the Securities and Exchange Commission of Pakistan (SECP) has announced new measures to combat money laundering and terror financing.

The new measures relate to SECP’s fresh guidelines on anti-money laundering (AML), combating the financing of terrorism (CFT) and proliferation financing — act of providing funds for acquiring weapons of mass destruction.

The fresh guidelines pertaining to “know your customers” (KYC) for the insurance sector, stock brokers and the non-banking financial institutions (NBFC) have been released ahead of the implementation review by the FATF on the action plan given to Pakistan. The review by the FATF is scheduled to be held in Colombo next month.

The SECP has reiterated that KYC and customer due diligence was essential even for the existing customers on the basis of materiality and risk at appropriate times.

The corporate sector regulator has stated despite having a long-term banking relationships with the investment of funds through banking channel the regulated person (RT) will be responsible even for the generation of suspicious transaction report (STR). The SECP guidelines identify and verify the beneficiaries in case of trusts.

The SECP has said that in the case of “trusts”, the regulated person should obtain ‘trust deed’ which contains the details of settlers, objects of the trust, details of trustees and the details of any possibility of influence of any other person on trustee regarding management and control of trust property.

While in case of “private trust” if the beneficiary of a trust is also the beneficial owner of the trust, identification and verification of the beneficiary is required otherwise the name and CNIC of each beneficiary of a trust should be obtained.

The SECP has also highlighted that the annual risk assessment framework and compliance assessment checklist are required to be filed with it by June 30 of each financial year, while May 31 of each financial year may be taken as a cut-off date for data to conduct necessary assessment and subsequent filing to the SECP on June 30.

However, the data for the month of “June” has to be included in the subsequent annual filing.

The commission has also stated that the regulated person should respond to discrepancies arising during monitoring and if the RT is not able to satisfactorily complete required CDD measures the account will be blocked or existing business relationship has to be terminated, and the STR has to be reported to the Financial Monitoring Unit (FMU).

Published in Dawn, April 14th, 2019

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Smog hazard
Updated 05 Nov, 2024

Smog hazard

The catastrophe unfolding in Lahore is a product of authorities’ repeated failure to recognise environmental impact of rapid urbanisation.
Monetary policy
05 Nov, 2024

Monetary policy

IN an aggressive move, the State Bank on Monday reduced its key policy rate by a hefty 250bps to 15pc. This is the...
Cultural power
05 Nov, 2024

Cultural power

AS vital modes of communication, art and culture have the power to overcome social and international barriers....
Disregarding CCI
Updated 04 Nov, 2024

Disregarding CCI

The failure to regularly convene CCI meetings means that the process of democratic decision-making is falling apart.
Defeating TB
04 Nov, 2024

Defeating TB

CONSIDERING the fact that Pakistan has the fifth highest burden of tuberculosis in the world as per the World Health...
Ceasefire charade
Updated 04 Nov, 2024

Ceasefire charade

The US talks of peace, while simultaneously arming and funding their Israeli allies, are doomed to fail, and are little more than a charade.