KARACHI: The State Bank of Pakistan (SBP) has issued fresh guidelines to combat money laundering and financing of terrorism in line with the United Nations Security Council (UNSC) resolutions.
Pakistan has been under pressure over the issue of money laundering as the Federal Investigation Agency (FIA) keeps arresting people involved in this illicit practice.
In the middle of November 2015, US authorities revealed that they had arrested Pakistani currency dealer Altaf Khanani in September of that year. They accused Khanani Money Laundering Organisation (MLO) of laundering illicit funds for organised crime groups, drug trafficking organisations and designated terrorist groups throughout the world.
It was a shock for currency traders and a source of concern for Pakistan which, despite being a major victim of terrorism, faced international pressure to do more against this menace.
The SBP said the relevant paragraphs of Regulation 1 and Guidelines stand amended with consequential changes. “Banks/development finance institutions (DFIs)/micro-finance banks (MFBs) are advised to ensure compliance of the requirements in letter and spirit,” said the SBP.
Recently, key exchange companies said sending money out of Pakistan through illegal channels has been made impossible. People involved in the currency business are not even ready to discuss this issue. However, they accept that this illegal business cannot be eradicated completely as it has deep roots and extreme secrecy.
Since the issue of terrorism has created a hostile situation particularly in Pakistan, Afghanistan and now Iran, the illegal transfer of money is a key to fighting this menace.
“Banks/DFIs/MFBs should not provide any banking services to proscribed or designated entities and persons or their associated persons as required under Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Regulations,” said the SBP.
The government has already prescribed a penalty of up to Rs10 million for noncompliance of the sanctions regime under UNSC Act 1948 and Anti-Terrorism Act 1997.
