ISLAMABAD: In order to bring further improvement in the Anti-Money Laundering Act, 2010, the Finance Minister Ishaq Dar, Wednesday, got the Anti-Money Laundering (Amendment) Bill, 2015 from the Lower House of the Parliament.
However, a bill to provide for the establishment of Deposit Protection Corporation, as a subsidiary of the State Bank of Pakistan, and for the management and control thereof. The Deposit Protection Corporation Bill, 2015 was referred to concerned committee for further deliberations.
Dar also laid before the National Assembly the Government Bai-Muajjal Financing Facility Rules, 2015 under sub-section (3) of section 28 of the Public Debt Act, 1944.
Dar had already gained approval of the bill from the Senate on last Friday along with amendments moved by the members of the Senate Finance Committee in a process of clause-by- clause reading.
The bill proposed actions and measures to make effective regime stakeholders, amendments and reflected reflect the government’s firms resolve to strengthen its Anti-Money Laundering regime.
The bill is aimed at streamlining the existing AML law in line with international standards prescribed by Financial Action Task Force (FATF) and to bring consistency and clarity in the enforcement provisions.
These amendments would help the government to ensure that proceeds of crimes and property involved in money laundering are detected, investigated and prosecuted effectively.
The bill had been much debated in both the senate and national assembly standing committees on Finance and Revenue as the members held heated debates on each and every clause of the bill. Members of these committees had been unanimous in rejection the clause related to the inclusion of income tax frauds under the money laundering law.
The draft of the bill available with this scribe states that provides all business relations with customers shall be monitored on an ongoing basis to ensure that the transactions are consistent with the bank/ DFI’s knowledge of the customer, its business and risk profile and where appropriate, the sources of funds.
Banks/DFIs shall obtain information and examine, as far as possible the background and purpose of all complex, unusual large transactions, and all unusual patterns of transactions, which have no apparent economic or visible lawful purpose.
The background and purpose of these transactions shall be inquired and findings shall be documented with a view to making this information available to the relevant competent authorities when required.
Banks/ DFIs shall periodically review the adequacy of customer information obtained in respect of customers and beneficial owners and ensure that the information is kept up to date, particularly for higher risk categories of customers.
The review period and procedures thereof should be defined by banks/DFIs in their AML/CFT policies, as per risk-based approach.
I order to avoid the risk where front-end staff do not follow the desired procedures and update the KYC/CDD form of the customer based on their personal knowledge/perception rather than interviewing the customer, banks/DFIs shall obtain sign-off from the customer on every revision of KYC/CDD form.
Banks/ DFIs shall comply with the provisions of AML Act, rules and regulations issued there under for reporting suspicious transactions/currency transactions in the context of money laundering or financing of terrorism.
Banks/ DFIs shall implement appropriate internal policies, procedures and controls for meeting their obligations under AML Act.
Banks/ DFIs shall pay special attention to all complex, unusually large transactions, and all unusual patterns of transactions, which have no apparent economic or visible lawful purpose.
The back ground and purpose of such transactions shall, as far as possible, be examined, the findings established in writing, and be available to assist the relevant authorities in inspection and investigation. AML/CFT Regulations
Examples and characteristics of some suspicious transactions (Red Alerts) that may be a cause for increased scrutiny for AML/CFT purposes are listed at ‘Annexure-II’.
Banks/DFIs are advised to make use of technology and upgrade their systems and procedures in accordance with the changing profile of various risks.
Accordingly, all banks/DFIs are advised to implement automated Transaction Monitoring Systems (TMS) capable of producing meaningful alerts in real time, based on pre-defined parameters/thresholds and customer profile, for analysis and possible reporting of suspicious transactions. Further, banks/DFIs shall establish criteria in their AML/CFT Policies for management of such alerts.
The transactions, which are out of character or are inconsistent with the history, pattern, or normal operation of the account including through heavy deposits, withdrawals and transfers, shall be viewed with suspicion, be properly investigated and referred to Compliance Officer for possible reporting to FMU under AML Act.
Banks/ DFIs should note that STRs, including attempted transactions, should be reported regardless of the amount of the transactions; and, the CTRs should be reported above the threshold of Rs. 2.5 million as per requirements of AML, Act.
The basis of deciding whether an STR is being filed or not shall be documented and kept on record together with all internal findings and analysis done in relation to a suspicion irrespective of the fact that transaction is subsequently reported or not.
Banks/ DFIs, without disclosing the contents of STRs, shall intimate to State Bank of Pakistan on bi-annual basis the number of STRs reported to FMU. The status report (indicating number of STRs only) shall reach to Director, BPRD within seven days of close of each half year.
