ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Wednesday issued Anti Money Laundering and Countering Financing of Terrorism Regulations, 2018, in compliance with Financial Action Task Force (FATF) recommendations, which are mandatory to adopt for Pakistan being a member of the Asia Pacific group on money laundering.
According to a statement issued by the SECP, the latest regulations “supersede all earlier notifications which had separate anti-money laundering (AML) and countering financial terrorism (CFT) requirements for financial institutions regulated by the SECP”.
The SECP has provided a single set of regulations for all the securities brokers, insurance companies, non-banking finance companies and modarabas with the aim to harmonise the AML and CFT regime.
The exchange commission said that with the latest regulations it has enhanced focus towards high-risk areas, taking a risk-based approach towards combating money laundering and financing of terrorism.
“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 required to identify the ultimate beneficial owner, who is a natural person, of all legal persons and legal arrangements before offering their services to them,” read the SECP statement.
Earlier this month, the National Security Committee (NSC) reaffirmed its commitment to cooperate with the international watchdog tasked with countering illicit financing for addressing shortcomings in the country’s anti-money laundering and counter-terror financing regimes.
“The committee reaffirmed the commitment of the country to work with FATF and other international organisations in achieving common goals and shared objectives,” read a statement issued by the Prime Minister Office following the NSC meeting. Pakistan has been placed on the grey list by the Paris-based global watchdog.
Former finance adviser Miftah Ismail had earlier said that the decision to put Pakistan on ‘grey list’ would only cause “embarrassment” for the country at the international level but it would have no effect on the country’s economy. The adviser, however, ruled out the possibility that the country could be placed on the ‘blacklist’ in the next stage.
The grey list identifies the “jurisdictions with strategic anti-money laundering/countering the financing of terrorism deficiencies for which they have developed an action plan with the FATF”.
The FATF carries out an in-depth study of the financial system of a country – known as “mutual evaluation” – as part of the process to avoid blacklisting.