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Saturday, April 13, 2024

SBP and SECP join hands to tackle money laundering in Pakistan

State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) have signed a Letter of Understanding (LoU) to strengthen their joint supervisory role against money laundering in Pakistan.

The SBP and SECP have revised the Terms of Reference (ToR) of their Joint Task Force (JTF) on financial conglomerates to further bolster the supervisory cooperation, inter alia, in Anti-Money Laundering , Combating the Financing of Terrorism and Countering Proliferation Financing (AML/CFT/CPF) supervision at financial-group level.

SBP Governor Dr Reza Baqir and SECP Chairman Aamir Khan signed the LoU for revisions in the ToR.

This LoU has been signed in the wake of the Financial Action Task Force (FATF) tightening its grip over Pakistan as the country failed to get out if its grey list.

Though the Financial Action Task Force (FATF) appreciated Pakistan for the significant progress made on the entire action plan, it decided to keep the country on its grey list.

“To date, Pakistan has made progress across all action plan items and has now largely addressed 24 of the 27 action items,” FATF stated in its plenary meeting held on February 25.

The FATF also acknowledged the continued high-level political commitment of Pakistan to combat terrorist financing which, according to the FATF statement, has led to significant progress across comprehensive countering financing of terrorism plan.

Energy Minister Muhammad Hammad Azhar said that Pakistan had completed almost 90% of its current Financial Action Task Force (FATF) action-plan with 24 out of 27 items rated as largely addressed and the remaining 3 items partially addressed.

Pakistan has another chance to make its way out from the grey list in June 2021 which is why the two regulators – SBP and SECP – have decided to strengthen their role against AML and CFT.

A statement released by the SBP said, “The interagency cooperation between financial sector regulators is a crucial element for the effective supervision of financial groups, which comprise various types of financial institutions”.

“Keeping in view the importance of the group-level AML/CFT/CPF supervision, both SBP and SECP jointly agreed to specifically cover this area in the ToR of the JTF in a more explicit manner,” it further stated.

Read More: PPP Senator thanks FATF chief for evaluating Indian anti-money laundering regime

JTF was established by the SBP and SECP in March 2009 to proactively identify and tackle the risks posed by conglomeration in the financial sector.

These improvements in the ToR will allow the regulators to effectively implement group-level AML/CFT/CPF supervision in line with the international standards, and strengthen cooperation and information sharing in a more systematic manner.

These amendments in the ToR would permit regulators to effectively implement group-level AML/CFT/CPF supervision in line with the international standards, and strengthen cooperation and information sharing in a more systematic manner.

Pakistan’s efforts at fighting money laundering

A high powered 14-member task-force has been also established by the government to curb money laundering, terror financing and seize stolen money.

A notification issued by Financial Action Task Force (FATF) Cell installed at the Federal Board of Revenue (FBR), read that the committee comprises of representatives from the FBR, Federal Investigation Agency (FIA), intelligence agencies and the provincial counter-terrorism agencies. It further revealed that the committee has been created under Section 5(9) of the Anti-Money Laundering Act, 2010, following the decision taken at the 24th meeting of the General Committee for Prevention of Money Laundering in Pakistan. The director general of the FATF Secretariat would be in charge of the committee. It would have quarterly meetings but sessions could also be summoned earlier. The agenda of the meeting would be communicated to the relevant departments a week before the meeting.

The committee will function as a subcommittee of the General Committee of the FATF Secretariat, incorporating Grade 19 and above officers—from the National Accountability Bureau (NAB), FIA, Anti-Narcotics Tax Force (ANF), Financial Monitoring Unit (FMU), FBR’s Inland Revenue, customs department, provincial counter-terrorism departments (CTDs) and intelligence agencies.

The document disclosed that the Multi-Agency Money Laundering Investigation and Confiscation Committee (MAMLICC) will help in the formulation and execution of plans, programs and policies to curb money laundering in Pakistan.

The committee will identify the rising trends in money laundering and terror financing at the national and global level and will put forward its recommendations for policy developments, national anti-money laundering plan and joint operation action plan. It would also provide resources for the training of staff, present inputs for the allocation of opportunities and resources as well as other technical requirements.