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SECP holds sessions on AML/CFT obligations

September 20, 2018

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) held two awareness sessions about the regulatory framework on anti-money laundering and countering financing of terrorism (AML/CFT) for not-for-profit organisations (NPOs) in Lahore and Peshawar this week.

The SECP has been expanding its outreach efforts to other cities after holding the first awareness session in Islamabad last week, a statement said on Wednesday.

A large number of NPOs attended the sessions at the Institute of Cost and Management Accountants of Pakistan, Lahore and the Institute of Chartered Accountants of Pakistan, Peshawar.

The SECP issued the AML/CFT Guidelines to NPOs early this month to facilitate them in their efforts to mitigate money laundering, terrorist financing (ML/TF) and other risks and abuses by adopting a risk-based approach.

These well-attended sessions were aimed at further developing government-NPO engagement through an inclusive approach. Recommendation number eight of the Financial Action Task Force (FATF) requires countries to work with NPOs to develop and refine best practices to address terrorist financing risk and vulnerabilities to protect them from TF abuse.

At each event, a detailed presentation was given by the SECP official who apprised the participants about the regulatory framework applicable on NPOs incorporated under the Companies Act, 2017.

The official highlighted the regulatory measures to prevent the NPOs from ML/TF abuses as contained in the regulations for section 42 companies and supplemented by the best practices and recommendations contained in the NPO Guidelines.

During these sessions, the salient features of the guidelines, including risk factors for NPOs, terrorist financing process, fundamental principles of good practice, red flags and high-risk indicators were explained.

The official emphasised that through issuance of the guidelines, the SECP has adopted a soft law approach and encouraged self-regulation among the NPOs to ensure that the legitimate and essential work being carried out by them does not suffer. However, regulatory action against non-compliant NPOs is a regular feature of SECP enforcement strategy, which will be continued in the future, the statement said.

The lead role played by the National Counter Terrorism Authority (NACTA) and the collaborative efforts being made to minimise the TF risks through coordination with all the relevant authorities, including SECP, were also highlighted during these sessions.

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