ISLAMABAD: The government has proposed new rules to ensure ‘due diligence’ of investors parking money in national savings certificates as the country is awaiting a crucial decision on its anti-money laundering and terror financing measures from a global finance watchdog early next year, it emerged on Thursday.
The proposed National Savings Scheme (AML and CFT) Rules 2019 would bind the officials to undertake due diligence of customers of NSS to curb money laundering and terror financing.
In February next year, the Financial Action Task Force is scheduled to announce its decision about Pakistan to keep the country in greylist or downgrade it to blacklist of countries lacking AML/CFT standards.
Under the proposed rules, the finance division would constitute national savings AML (anti-money laundering) and CFT (combating the financing of terrorism) supervisory board to provide independent oversight of implementation of these rules and take necessary enforcement actions against violations.
The board would compose of additional secretary of finance division as its chairman. Joint Secretary of finance division would be the member-cum-secretary, while it also consists of representatives of State Bank of Pakistan and Securities and Exchange Commission of Pakistan.
The proposed rules would apply to all offices and individuals responsible for the issuance, management, marketing, registration, replacement, sale and discharge of the instruments issued by and the accounts opened at and maintained with the National Savings Centers, Pakistan Post and any other office designated as offices of issue.
The designated officers would need to identify the customer and verify his identity on the basis of documents, data or information obtained from him or from reliable and independent sources, identify where there is a beneficial owner who is not the customer, and verify his identity so that the office of issue is satisfied that it knows who the beneficial owner is. “The office of issue, including all its officers and employees shall comply with the provisions of the AML Act and the rules and regulations issued there under for reporting of STRs and CTRs (suspicious and currency transaction reports) in the context of money laundering and financing of terrorism and implement appropriate internal policies, procedures and controls for meeting the obligations specified by the AML Act and the rules and regulations issued there under,” the draft of the rules said.
“The controlling office in their respective jurisdiction in respect of the matters covered under these rules shall make use of technology and upgrade their systems and procedures in accordance with the nature of risks of money laundering and financing of terrorism and shall for prevention of such activities and offences establish criteria for management of alerts for such risks and maintain human resource for ensuring compliance with provisions of AML Act.” Under the proposed rules, the officers would report all suspicious transactions, including attempted transactions, to the Financial Monitoring Unit, regardless of the amount of the transaction. “The controlling office shall take appropriate steps to identify, assess and understand their ML/TF risks for customers, countries or geographic areas and products, services, transactions or delivery,” the draft said. “The controlling office shall have policies, controls and procedures, which are approved by senior management, to enable them to manage and mitigate the risks that have been identified, either by the country or office of issue or controlling office, monitor the implementation of those controls and to enhance them if necessary and take enhanced measures to manage and mitigate the risks where higher risks are identified.”
The officers will also be obligated to ensure customer due diligence while dealing with occasional and walk-in customers.
“The office of issue or third party shall identify the occasional customers and walk-in-customers and verify their identity using reliable, independent source of information,” the draft said. “Every customer, whether permanent or occasional and whether natural or legal person or legal arrangement, shall be identified for establishing business relationship and for the purpose following information shall be obtained, verified using reliable, independent source documents, data or information.”