ISLAMABAD: State Bank of Pakistan (SBP) on Tuesday hinted at making it mandatory for the international incoming and outgoing passengers to Pakistan to declare the currency they are carrying with them through possible amendments in the Protection of Economic Reforms Act, 1992.The anti-money laundering regime would also require jewelers and real estate agents to submit details of the suspicious transactions — above Rs 2.5 million — to the Financial Monitoring Unit (FMU) of the SBP under the long term strategy to check money laundering under the Anti-Money Laundering Law, Syed Mansoor Ali Senior Joint Director Financial Monitoring Unit (FMU) SBP told a national conference.During the question-answer session at the conference on ‘Money Laundering and Implications for Counter Terrorism organised by Pakistan Institute of Legislative Development and Transparency (PILDAT) on Tuesday, Syed Mansoor Ali said that presently the SBP has no requirement for the passengers to give any declaration on amount of currency taking in or outside the country.
This could be instrumental in money laundering for which the government is considering options to amend the Protection of Economic Reforms Act, 1992. This Act has provided liberal freedom to passengers as well as foreign currency accountholders. Therefore, the government is considering review of the Protection of Economic Reforms Act, 1992.Responding to a query, Joint Director FMU of the SBP stated that the government under the long-term strategy would make it necessary for the jewelers and real estate brokers to report the suspicious transactions to the FMU of the SBP. Whenever any jeweler/real estate agent found suspected person involved in transaction of over Rs 2.5 million, the jeweler or the real estate broker would be required to report the suspected transaction in the next five years. Keeping this in view, the definition of “non-financial businesses and professions” covers real estate agents and jewelers.While highlighting the role of the anti-Money Laundering Law, he said that presently cash transactions involving over Rs 2.5 million have to be reported to the FMU of the SBP. The limit of over Rs 2.5 million as threshold for reporting suspicious transactions is high which needs to be brought down. The limit of over Rs 2.5 million has been set keeping in view cash based economy in the country. Under the anti-money laundering law, all the financial institutions operating under the purview of the SBP and the Securities and Exchange Commission of Pakistan (SECP) have to report the suspicious transactions above the said threshold.
Referring to the law enforcement agencies, he said that the FBR Customs Intelligence has been included in the list of law enforcement agencies for investigation. The FMU receives thousands of “Cash Transaction Report” i.e. report on currency transactions, but all of them are not suspicious transactions. When we receive any suspicious transaction, the FMU of the SBP analyze the history of account, counter party information and other relevant data. For example, if a suspicious transaction has been carried out by a trader, it would be analysed whether the trader has conducted business with other trader or similar kind of transaction has been conducted in the past. If necessary, the FMU of the SBP is empowered to collect information from other organizations or institutions as allowed under the law. Similarly, the information is also verified with the database of the SBP itself. If the case needs further investigation, the case would be referred to the concerned law enforcement agencies.Sharing key features of the anti-money laundering law, he said that a person shall be guilty of offence of money laundering, if the person acquires, converts, possesses, uses or transfers property, knowing or having reason to believe that such property is proceeds of crime; conceals or disguises the true nature, origin, location, disposition, movement or ownership of property; knowing or having reason to believe that such property is proceeds of crime; holds or possesses on behalf of any other person any property knowing or having reason to believe that such property is proceeds’ of crime; or participates in, associates, conspires to commit, attempts to commit, aids, abets, facilitates, or counsels the commission of specified acts.
About the role of reporting entities, Senior Joint Director FMU of the SBP said that the reporting entities included Financial Institutions (FI) and non-financial businesses and professions (DNFBP). The financial institution are banks, DFIs, modarbas, insurance, NBFCs, securities broker, exchange companies etc and designated non-financial businesses and profession have not yet been mandated to report STR/ CTR. The reporting entities are supposed to file suspicious transactions report (STR) to the FMU within seven days. The reporting entity shall keep and maintain all records for all the STR and CTR i.e. report on currency transactions reported by them for at least five years after reporting; focus on high risk customers, products, delivery channels, etc – Dailytimes
