ISLAMABAD: The International Monetary Fund (IMF) has urged Pakistan to strengthen monitoring mechanisms for suspicious financial transactions in the real estate sector amid concerns over money laundering and weak regulatory oversight.
According to sources, the IMF expressed concern over the low number of suspicious transaction reports being filed from the real estate industry and other non-financial business and professional sectors.
The global lender has also called for urgent measures to curb the growing trend of trade-based money laundering and to address loopholes in the exchange of beneficial ownership information.
Sources said the IMF has raised reservations regarding Pakistan’s financial monitoring systems, anti-money laundering framework and banking sector oversight.
The Fund is reportedly concerned that a significant portion of untaxed and undocumented wealth is being invested in the real estate market, increasing the risk of illicit financial activity.
Officials said the Federal Board of Revenue (FBR) recently conducted raids on several housing societies and launched investigations into allegations of concealed sales and undeclared income.
Sources added that the FBR had previously established a monitoring framework for the real estate sector under the Designated Non-Financial Businesses and Professions (DNFBP) regime, through which suspicious transaction reports are forwarded to the Financial Monitoring Unit (FMU).
However, according to sources, the IMF has termed the performance of the DNFBP monitoring system unsatisfactory and has asked Pakistan to improve enforcement and compliance measures.
