ISLAMABAD: The Federal Board of Revenue (FBR) has notified regulations for designated non-financial businesses and professions (DNFBP) as part of compliance with the Financial Action Task Force’s recommendations regarding anti-money laundering and combating financing of terrorism (AML/CFT) in Pakistan.
The regulations notified through SRO924 will cover accountants, real estate, gems and jewellery sectors to minimise chances of parking of terror financing there. The FBR will also work as a focal organisation for monitoring services of DNFBP.
Under the rules, every DNFBP will be registered with the FBR and will provide all information to the tax machinery. It includes, but not limited to, criminal records of the senior management and beneficial owners and maintaining records of customers to check money laundering transactions.
It will be mandatory for the DNFBP to communicate to the FBR within 30 days about the closure of their businesses.
FBR declared the regulator to oversee designated professions
As per the notification, the FBR was declared the AML/CFT Regulatory Authority to oversee jewellers, accountants and real estate agents.
The real estate agent includes builders, developers, brokers and dealers when execute a purchase and sale of a real property, participate in a real estate transaction capacity and are exercising professional transactional activity for undertaking real property transfer.
The real estate agents, jewellers and accountants will conduct Customer Due Diligence as per the laid down criteria. It will cover transactions of a client concerning the buying and selling of property; dealing of cash in jewellery, precious metals and stones with a customer equal to or above Rs2 million amounts; and accountants when they prepare for, or carry out, transactions for their clients.
The DNFBP will identify the customer whether entering into a business relationship or conducting an occasional transaction, and whether natural or legal person or legal arrangement and verify that customers identity using reliable, independent sources documents, data or information as required under these regulations.
The DNFBP will identify the beneficial owner and take reasonable measure to verify the identity of the beneficial owner by using reliable and independent document, data or sources of information.
Under the rules, the DNFBPs will take appropriate steps to identify, assess, and understand their risks for customers, countries or geographic areas, and products, services, transactions or delivery channels.
The DNFBPs will have policies, controls and procedures, which are approved by senior management. This has been done to enable them to mitigate risks that have been identified in their own assessment or any other publicly available resource or provided by the FBR; monitor the implementation of those controls and enhance them if necessary; and take enhanced measures to manage and mitigate the risks where higher risks are identified.
The records maintained by DNFBPs will be sufficient to permit reconstruction of individual transactions including its nature and date, the type and amount of currency involved, and the customer in the transaction so as to provide, when necessary, evidence for prosecution of criminal activity.
The real estate agents, jewellers and accountants will keep a list of all such customers where the business transaction was refused or needed to be closed either on account of failure of the client to provide relevant documents or the original document for viewing as required.
The records to be maintained and furnished by the accountants, real estate agents and jewellers will be subject to inspection by FBR, who may be assisted by other law enforcement agencies.
Duty drawback rates increased
Meanwhile, Commerce Adviser Abdul Razak Dawood on Wednesday said that Pakistan Customs has revised upwards the rates of Duty Drawback for leather sector.
The rates have been revised in accordance with the factual determination by Input Output Coefficient Organization after changes in valuations of input items, the adviser tweeted.
He said this will increase the global competitiveness of our leather products and contribute towards export-led growth.
The determination of revised rates of other sectors will follow, including furniture, footwear and pharmaceuticals etc, Dawood said.
Published in Dawn, October 1st, 2020