Daily Times

KARACHI: A two-day workshop here on Thursday called for zero tolerance towards money laundering and terrorism financing in the country, adding that developing an effective anti-money laundering/countering financing of terrorism (AML/CFT) risk assessment and compliance framework was need of the time.

The AML/CFT awareness session, organized by the Securities and Exchange Commission of Pakistan (SECP) here at the State Bank of Pakistan building, was attended by a large number of insurance companies, stock brokers, commodity brokers and non-banking financial corporations.

Addressing on the occasion, SECP Executive Director Khalida Habib said the commission notified Anti-Money Laundering and Countering Financing of Terrorism Regulations, 2018, in June this year which are fully compliant with the Financial Action Task Force (FATF) recommendations and shift the perspective from one-size-fits-all to the risk-based approach, enabling financial institutions to focus their resources on the high-risk customers. She said the introduction of simplified due diligence for low-risk customers will allow them to avail the services of financial institutions with relative ease.

She said FATF regulations were mandatory to adopt for Pakistan as a member of the Asia Pacific Group on Money Laundering, adding that the SECP will carry out thematic review of the securities brokers to assess their level of compliance with the AML/CFT framework. In order to ensure that criminals are not able to hide their identity through use of complex ownership structure of companies, partnerships, trusts or other similar forms, the financial institutions are now required to identify the ultimate beneficial owner, she said, adding that the financial institutions are also required to carry out self-risk assessment relating to money laundering and terrorist financing risks faced by them.

SECP Joint Director Muhammad Ali said the money laundering was punishable by up to 10 years imprisonment and Rs 1 million fine. “According to law, money laundering is punishable with rigorous imprisonment for a term which shall not be less than one year but may extend to 10 years and shall also be liable to fine which may extend to Rs 1 million and shall also be liable to forfeiture of property involved in money laundering or property of corresponding value,” he informed the audience.

The workshop focused on sharing the best global practices, legislative framework, technological enhancements and streamlining of procedures in order to apply national AML/CFT measures and develop an effective risk assessment and compliance framework. It also discussed the handling of politically exposed persons who have a higher probability of being involved in such crimes as they generally have access to public funds and by misusing their positions, they create hurdles for the financial institutions in fully implementing the know-your-customer (KYC) strategy.

The workshop was followed by an interactive session with the participants, which provided them a platform to share their experiences as well as feedback. In the question-answer session, SECP officials as well as members of the joint inspection regime (for brokers) addressed the queries of the participants. The participants also gave their suggestions on the initiatives taken by the SECP in the AML/CFT area.

Published in Daily Times, October 19^th 2018.