ISLAMABAD: As the Financial Action Task Force (FATF) is set to take a decision on Pakistan’s efforts against terror financing in September 2019 to de-list the country from its grey list, experts believe that it would be a daunting task for the Securities and Exchange Commission of Pakistan (SECP) to monitor thousands of NGOs registered with provinces as these organisations have allegedly been used for terror financing.
Speaking at a workshop on anti-money laundering (AML) regulations and countering financing of terrorism (AML/CFT) regulations here on Thursday, they highlighted that the FATF recommendations were of global standards for countering terror financing.
The SECP cancelled registration of 3,000 NGOs and non-profit organisations (NPOs) during 2017-18 as their accounts ware suspected to be misused for money laundering.
But the SECP has no jurisdiction to regulate or monitor around 15,000 NPOs registered under provincial laws across the country.
The FATF requires Pakistan to implement its recommendation for countering terror financing.
Khalida Habib, head of SECP’s anti-money laundering and international relations departments, said that the commission’s obligations under FATF action plan included identifying and assessing terror financing risks, in relevant sectors, geographic locations, channels and products, in consultation with other stakeholders and departments.
She said: “SECP’s AML regime is aimed at protecting financial system and the economy from the threats of money laundering and terror financing.”
She recalled that the FATF had observed deficiencies in Pakistan’s implementation of AML/CFT regime in February and in June the country was placed on FATF’s grey list for the strategic deficiencies.
“However Pakistan committed to implementing the action plan and the non-implementation of action plan may result in blacklisting of the country,” she said, adding Pakistan gave high-level political commitment to implement the action plan as agreed with FATF to address the notified deficiencies. She said the FATF would monitor progress against the agreed upon action plan that would be completed by September 2019.
She said that two parallel FATF monitoring processes were currently under way, the first was Pakistan’s mutual evaluation by Asia Pacific Group-against FATF 40 recommendations and the second was FATF Action Plan - 27 Actions.
The FATF Action Plan - 27 Actions has identified four key areas of concerns, which are deficiencies in the supervision AML/CFT regime by both the financial institution and the NPOs.
The other deficiencies were cross-border illicit movement of currency by terrorist groups, progress on terrorism financing investigation and prosecution by the law enforcement and effective implementation of UN Security Council resolutions on suspicious financing.
Waseem Ahmad Khan, additional director of SECP’s corporatisation and compliance department, briefed on the commissions regulatory framework for beneficial ownership.
He said that the SECP had issued a circular that required companies having legal persons as members or shareholders to take reasonable measures to obtain and maintain up-to-date information relating to their ultimate beneficial owners in a register of ultimate beneficial ownership.
Published in Dawn, November 23rd, 2018