Compliance report ready as FATF meeting approaches

Updated October 10, 2019

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The next meeting of the Financial Action Task Force (FATF) is scheduled to be held in Paris from Oct 12 to 15 and Pakistan has already prepared its compliance report, which will be presented by Minister for Economic Affairs Division Hammad Azhar. — FATF website/File
The next meeting of the Financial Action Task Force (FATF) is scheduled to be held in Paris from Oct 12 to 15 and Pakistan has already prepared its compliance report, which will be presented by Minister for Economic Affairs Division Hammad Azhar. — FATF website/File

ISLAMABAD: The next meeting of the Financial Action Task Force (FATF) is scheduled to be held in Paris from Oct 12 to 15 and Pakistan has already prepared its compliance report, which will be presented by Minister for Economic Affairs Division Hammad Azhar.

The Pakistani delegation is scheduled to leave for France on Oct 13 as Pakistan’s case will be taken up on Oct 14 and 15.

Meanwhile, a report finalised by the Securities and Exchange Commission of Pakistan (SECP) on Wednesday has said that the comprehensive guideline developed by the Commission has helped financial institutions to generate 219 Suspicious Transactions Reports (STRs) in one year, as compared to 13 STRs in eight years.

To align itself with the FATF’s standards and its 40 recommendations, the Commission developed a set of regulations — SECP AML/CFT Regulations — in June 2018.

The SECP has conducted 167 inspections, focusing on AML/CFT (Anti-Money Laundering / Combating Financing of Terrorism) compliance in the cases of 72 securities brokers, 27 non-banking financial companies, 13 insurance companies and 55 high risk non-profit organisations.

The SECP report has said that apart from penalties imposed for non-compliances with the said regulations, the financial institutions have also undertaken remedial measures to ensure effective compliance with the regulations.

Automated screening software has been deployed by many financial institutions to screen the proscribed persons and the regulated entities now also have access to the Go AML system of the State Bank of Pakistan’s (SBP) Financial Monitoring Unit (FMU) for online filing of STRs.

According to the report, the SECP has successfully made transition from one-size-fits-all to a risk-based approach to implement a consolidated AML/CFT regulatory framework in its regulated financial sector comprising of stock and commodity brokers, NBFCs, Modarabas and insurers/Takaful operators.

Further to effectively identify assess and understand the Money Laundering / Terror Financing (ML/TF) risks that Pakistan faces, a National ML/TF Risk Assessment has been undertaken in 2019 to assess ML/TF vulnerabilities that are inherent within the financial sector including banking, NBFCs, brokers and insurance.

The SECP has said that the FMU is collaborating with stakeholders — including ministries, law enforcement agencies, SBP and SECP — to implement the control mechanism to check potential abuse by money launderers and terrorist financiers.

The report has said that continuous awareness campaigns and efforts have resulted in improvement in compliance level by the regulated entities.

Published in Dawn, October 10th, 2019