FATF conditions: FBR seeks details of trust funds from all banks

ISLAMABAD: In order to ensure compliance on FATF requirements, FBR Chairman Shabbar Zaidi has written letters to all banks and sought details of trust funds along with identification of persons involved in such activities.

The Financial Action Task Force (FATF) under its 27 action plan has asked Pakistan to regulate non-profit organisations, trusts and other activities undertaken on name of welfare so scrutiny of all those is requirement for compliance under the FATF review conditions. Pakistan has already taken different steps to avoid blacklist in the upcoming review meeting of FATF scheduled to take place in the current month at Paris.

Pakistan had already submitted its compliance report and defended its position in face to face meeting last month. Now the final review meeting of FATF will be held by mid of the ongoing month as Pakistan is confident that no downgraded was expected after taking different remedial measures in last 10 months period.

According to letters written by Chairman FBR Shabbar Zaidi to all banks stating that banks in Pakistan may engage in ‘Trust Activities’ whereby they hold assets on behalf of individuals, trusts, retirement benefit funds and other institutions.

The ‘assets’ so acquired are not reflected in the ‘financial statements’ of the banks, however relevant ‘Off Balance Sheet’ details are duly reflected in the financial statements, the letter added.

In order to comply various compliance requirements, including FATF, the Chairman FBR stated in his written letter that it is imperative for FBR to have appropriate details of such transactions including identification of persons on behalf of which such ‘trust activities’ are undertaken. “We therefore suggest you to share the details of such ‘trust activities’ conducted by the bank ‘during’ the financial year ended on December 31, 2018 with us”, the letter states.