KARACHI: Federal Board of Revenue (FBR) on Tuesday issued regulations binding accountants, jewelers, and real estate agents to maintain records of their clients/customers transactions to ensure compliance with FATF conditions.
The FBR issued the regulations in respect of Designated Non-Financial Businesses and Professions (DNFBPs).
The DNFBPs include real estate agents, jewelers, and accountants.
The inspection of records maintained by these DNFBPs will be conducted under laws related to anti-money laundering and counter financing of terrorism (AML/CFT).
As per the regulations the DNFBPs are required to get registered with the FBR.
Further the DNFBPs are required to record transactions till disposal of cases where transactions, customers, or instruments are involved in litigation or are required by a court of law.
The business entities are also required to promptly satisfy any enquiry or order from the FBR, designated law enforcement agencies, and Financial Monitoring Unit (FMU) of the ministry of finance.
The FBR said the real estate agents, jewelers, and accountants were required to keep a list of all such customers where the business transaction was refused or needed to be closed on account of failure of the customer to provide the relevant documents.
The DNFBPs should ensure that their foreign branches and majority-owned subsidiaries apply AML & CFT measures consistent with Pakistan requirements where the minimum AML & CFT requirements are less strict than Pakistan, to the extent that host country laws.
If the foreign country does not permit the proper implementation of AML/CFT measures consistent with that of Pakistan requirements, financial groups should apply appropriate additional measures to manage the risks, and inform the relevant authority or regulator.
A comprehensive mechanism for customers due diligence (CDD) under these regulations have been laid down.
The real estate agents are required CDD when they are involved in transactions for a client concerning the buying and selling of real estate.
In case of jewelers and dealers in precious metals and stones, the CDD will be done when they engage in
any cash transaction with a customer or client equal to or above Rs 2 million.
For accountants, the CDD is mandatory when they prepare for, or carry out, transactions for their clients concerning the activities described under the Anti-Money Laundering Act.
The DNFBPs are required to identify customers and beneficial owners and take responsible measures to verify the identity of the customer/beneficial owner by using reliable and independent documents, data or sources of information.
For the verification of identity of customer or beneficial owner, the DNFBPs are required to obtain copy of CNIC, NICOP, POC, Form ‘B’ in case of minor under age of 18 years or National Alien Registration Card (ARC) issued by National Aliens Registration Authority (NARA).
The regulations also stressed enhanced due diligence (EDD). The DNFBPs are required to apply EDD in cases, included: business relationship and transactions with natural and legal persons when the risks are higher; business relationship and transactions with natural and legal persons from countries for which this is called for by the FATF and Politically Exposed Persons (PEPs) and their close associates and family members.