Financial Crime World

Pakistan Introduces Tough Anti-Money Laundering Guidelines for Designated Non-Financial Businesses and Professions

The Federal Board of Revenue (FBR) has been tasked with ensuring that designated non-financial businesses and professions (DNFBPs) comply with anti-money laundering and counter financing of terrorism obligations under the Anti-Money Laundering Act. DNFBPs, including real estate agents, dealers in precious metals and stones, and FBR-supervised accountants, must take steps to prevent the laundering of criminal proceeds and ensure that they are not being used as conduits for illegal activity.

The Importance of Combating Money Laundering

Money laundering is a serious issue that can have devastating consequences for the integrity of Pakistan’s domestic and international financial systems. It involves the concealment of illicit funds to disguise their origins, often through complex networks of transactions and shell companies. Under the country’s Anti-Money Laundering regime, DNFBPs must take steps to prevent money laundering and ensure that they are not being used as conduits for illegal activity.

Terrorist Financing: A Major Concern

Terrorist financing is another major concern, as it involves the use of funds to support terrorist activities. Pakistan’s counter terrorist financing system works in tandem with international efforts to target and disrupt the financial networks of terrorist organizations, protecting the public from harm.

Designated Non-Financial Businesses and Professions

Pakistan has designated certain DNFBPs as subject to AML/CFT obligations. These include:

  • Lawyers and law firms
  • Notaries
  • Other legal professionals
  • Accountants and accounting firms
  • Real estate agents
  • Dealers in precious metals and stones
  • Builders and developers

Each of these sectors has a dedicated supervisor or set of supervisors to monitor and encourage compliance with AML/CFT obligations. This includes regular compliance inspections to assess how well DNFBPs are meeting their AML/CFT obligations.

Compliance Obligations

DNFBPs must take steps to:

  • Assess and document their risks
  • Implement preventive measures and internal controls
  • Ensure that they are meeting their AML/CFT obligations

The Pakistani government is committed to ensuring that its financial system remains safe from the risks posed by money laundering and terrorist financing. These new guidelines are an important step towards achieving this goal.

Conclusion

Pakistan’s Anti-Money Laundering regime is designed to prevent the misuse of the financial system for illegal activities. The designation of certain DNFBPs as subject to AML/CFT obligations, along with regular compliance inspections and dedicated supervisors, will help to ensure that Pakistan’s financial system remains safe from the risks posed by money laundering and terrorist financing.