SBP orders strict monitoring to curb money laundering & terrorism financing

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Stop money laundering. Word cloud illustration in shape of hand print showing protest.

The State Bank of Pakistan (SBP) on Friday advised all financial institutions to take necessary measures to ensure that beneficial owners, directors, members, trustees and authorized signatories of any company are in no connection with the proscribed list of entities or persons.

The SBP’s decision is in accordance with the amended paragraph 6 of the Guidelines on Compliance of Government of Pakistan’s Notifications issued under United Nations Security Council (UNSC) Resolutions. According to the amendment, banks/DFIs/MFBs should not provide any banking services to proscribed entities and persons or their associated persons as required under Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Regulations.

In case of entity accounts, it should be ensured that their beneficial owners, directors, members, trustees and authorized signatories are not linked with any proscribed entities and persons, whether under the same name or under a different name.

The association of individuals/ entities with proscribed entities and persons may be determined on the basis of appropriate screening of sanctions lists/ watch lists, publicly known information or linkages on the basis of online NTN verification, government or regulatory sources, reliable media information, etc.

Furthermore, it has been advised that strict screening measures be taken while opening new accounts or extending services to customers. Any similarity between a customer and and a proscribed entity and/or  person, including national identification number, address, etc will require further investigation and appropriate action if necessary.

The banks/DFIs/MFBs have also been asked to monitor client relationships on a continuous basis and ensure prompt reporting to the Financial Monitoring Unit (FMU) be done. The FMU unit will take further action as per law.

Furthermore, SBP informed banks/DFIs/MFBs to align their existing monitoring function/systems with the amended  provisions within a period of six (06) months from the date of  issuance. The govt  has already prescribed penalty of up to Rs10 million for non-compliance of sanctions regime being implemented through SROs under the UN (Security Council) Act, 1948.