Financial Crime World

New AML/CFT Regulations in Pakistan: Holding Designated Non-Financial Businesses and Professions (DNFBPs) Accountable

In an endeavor to combat money laundering and terrorist financing, the Pakistani government has bolstered its Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) regime. The new regulations now apply to Designated Non-Financial Businesses and Professions (DNFBPs), which include:

  • Real estate agents
  • Dealers in precious metals and stones
  • FBR-supervised accountants

Government’s Efforts to Strengthen Pakistan’s AML/CFT Regime

Pakistan’s Anti-Money Laundering Act has put the Federal Board of Revenue (FBR) in charge of ensuring that DNFBPs comply with their AML/CFT obligations. Financial institutions, lawyers, notaries, and non-FBR-supervised accountants are governed by other competent authorities and self-regulatory bodies.

The Importance of AML and CFT Systems

  • Money laundering is a concern for both local and international financial systems
  • AML system in place to ensure crime doesn’t pay and safeguard financial networks
  • Counter-terrorist financing system essential to protect the public from devastating consequences of terrorist financing

Regulations for DNFBPs

DNFBPs, including lawyers and law firms, notaries, accountants and accounting firms, real estate agents, builders, developers, housing authorities, and dealers in precious metals and stones, are required to:

  • Abide by AML/CFT regulations when providing certain services to clients
  • Conduct cash transactions over PKR 2 million
  • Be involved in trust and company services

Understanding Risks and Implementing Robust Compliance Programs

  • Effective AML/CFT system relies on assessing risks properly
  • Regular risk analysis to identify and allocate resources to high-risk areas
  • Robust compliance program with preventive measures and internal controls to protect from illicit activities

FBR’s Role in Overseeing DNFBP Compliance

  • FBR to oversee AML/CFT regulations’ implementation and compliance across various DNFBP sectors
  • Regular inspections to ensure stringent measures are in place to prevent illicit activities within these sectors