NEC okays terror financing risk assessment
ISLAMABAD – The National Executive Committee (NEC) on Tuesday approved Terrorist Financing Risk Assessment that would be submitted in the upcoming review meeting of the Financial Action Task Force (FATF) next month. Finance Minister Asad Umar chaired a meeting of the NEC to review the progress on FATF Action Plan. National Counter-Terrorism Authority (Nacta) made a detailed presentation on the Terrorist Financing Risk Assessment, prepared jointly by NACTA and FIA in consultation with a number of relevant authorities.
After detailed deliberations on various aspects of the assessment report, the NEC approved the same subject to address certain observations in respect of key policy and legislative areas. The Nacta will finalise the report accordingly. Financial Monitoring Unit (FMU) presented the analysis on suspicious transaction reports filed by the financial sector in the last three years and the law enforcement actions taken against money laundering and terrorism financing on the basis of such reports.
The NEC also approved the Risk Assessment Report on cash smuggling prepared by FBR-Customs. The Asia Pacific Group had asked Pakistan to undertake an in-depth analysis of all key cash smuggling risks particularly smuggling occurring across Pakistan/Afghanistan and Pak-Iran borders and explore the linkages between cash smuggling and transnational terrorist financing networks.
Pakistan’s sectoral risks assessment report will be submitted to FATF for compliance by next month. This risk assessment report will be reviewed by the plenary session of FATF scheduled to meet in Sydney (Australia) in first week of January 2019. The FATF can put the country into blacklist anytime if it found the progress unsatisfactory on 27 actionable plans till September 2019. Sources said that Pakistan had made progress on around 40 percent of the 27 immediate outcomes (IOs) placed by the FATF to review Pakistan’s progress on money laundering and terror financing. Meanwhile, there is unsatisfactory progress on 60 percent outcomes.
The NEC advised the authorities concerned to enhance enforcement actions and adopt a result-oriented approach. The NEC chairman advised all the departmental heads to regularly monitor timely implementation on the FATF Action Plan. The need for a coordinated effort with the provinces was also highlighted. The meeting was attended by minister for foreign affairs, minister for law and justice, minister of state for interior, SBP governor, SECP chairman, FIA director general, Nacta director general, FBR Customs director general, FMU director general and other senior officials of the federal and provincial governments.
Meanwhile, in a separate development, the Securities and Exchange Commission of Pakistan (SECP) has amended the Intermediaries (Registration) Regulations, 2017. In the light of recommendations made by Financial Action Task Force (FATF), an intergovernmental body formed to coordinate efforts on anti-money laundering and counter financing of terrorism (AML/CFT) The Anti-Money Laundering Act, 2010, places compliance obligations on the company service providers (intermediaries) to conduct customer due diligence and report suspicious transactions to Financial Monitoring Unit. The amended regulations will require compliance by the intermediaries with the AML/CFT regime.
So far, 193 intermediaries have been registered with the SECP under the Companies Act, 2017, and their list is available on its website at www.secp.gov.pk. In terms of aforesaid amendments, notified vide SRO 1521(I)/2018 on December 14, intermediaries while performing their functions, shall ensure that their clients are not involved in suspicious activities, implying money laundering or terrorist financing.
Further, the intermediaries shall also ensure that the client is not placed on the United Nations Security Council’s (UNSC) list of designated persons or entities linked to terrorist financing or against whom a ban, sanction or embargo subsists.