The International Monetary Fund (IMF) has raised concerns over Pakistan’s low reporting of suspicious financial transactions in the real estate sector, urging authorities to strengthen anti-money laundering controls and improve monitoring mechanisms.
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According to official sources, the IMF has asked Pakistan to address the low number of Suspicious Transaction Reports (STRs) linked to real estate activities, amid concerns that untaxed income and illicit funds may be flowing into the property market.
The concerns were reportedly highlighted during recent discussions under Pakistan’s Extended Fund Facility programme, under which the IMF approved the release of a $1.1 billion tranche.
The IMF also called on Pakistan to take stronger action against trade-based money laundering, which involves disguising illegal financial flows through trade transactions such as imports and exports.
Officials said the global lender wants Pakistan to improve coordination among regulatory and enforcement institutions to detect and prevent such activities more effectively.
Particular attention was drawn to the performance of Designated Non-Financial Businesses and Professions (DNFBPs), including real estate agents and other sectors considered vulnerable to money laundering risks.
Pakistan had tasked these sectors with reporting suspicious financial activity to the Financial Monitoring Unit (FMU), following systems similar to banking sector compliance standards.
However, the IMF reportedly observed that the institutional mechanism created for this purpose has produced very few suspicious transaction reports so far.
Authorities have recently increased scrutiny of the property sector, with the Federal Board of Revenue conducting raids on two major housing societies over allegations of concealed income and sales irregularities.
Pakistan also shared updates with the IMF on its National Risk Assessment and cooperation with the National AML/CFT Authority, which oversees anti-money laundering and counter-terror financing efforts.
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Officials said reforms are under way to improve the accuracy of beneficial ownership records held by the Securities and Exchange Commission of Pakistan to prevent misuse of legal entities for hiding assets or financial flows.
The IMF and Pakistani authorities also agreed to strengthen data sharing between customs, banks and other institutions to improve oversight of foreign exchange reporting, import payments and customs declarations.