ISLAMABAD - The Securities and Exchange Commission of Pakistan (SECP) has intensified its efforts to combat terror financing and money laundering by asking all companies to comply with Anti-Money Laundering Act, 2010.
The Financial Action Task Force (FATF), an independent inter-governmental body, has issued international standards containing recommendations to combat money laundering and financing of terrorism. The FATF recommendations require countries to take measures to prevent the misuse of legal persons for money laundering and terror financing and ensure that there is adequate, accurate and up-to-date information available with the companies on the ultimate (actual) beneficial ownership and control of legal persons that can be accessed in a timely manner by competent authorities.
The SECP has issued circular No 16 of 2018 to all companies on the directive of its Chairman Shaukat Hussain with a view to maintaining a register of ultimate beneficial ownership. The SECP has directed all the officers of companies to endeavour to prevent fraud and money laundering, including predicated offences as provided in Anti-Money Laundering Act, 2010, with respect to affairs of a company.
The circular has asked all the companies having legal persons as their members/shareholders to obtain and maintain up-to-date information relating to their ultimate beneficial owners, i.e. the national persons who ultimately own or control the company through direct or indirect ownership of not less than 10% shares, voting rights, ownership or controlling interest in that company.
The information is required to be obtained and maintained irrespective of the number of levels of ownership pattern until the natural person or individual exercising ultimate ownership or control and lying at the end of the ownership chain is revealed.
Companies shall obtain the ultimate beneficial ownership information from their members and also ensure to maintain and update this information in a register of beneficial ownership.
The minimum fields of information required by the companies have been specified through the circular. In case no natural persons are identified after having exhausted all possible means or there is any doubt that the persons identified are the beneficial owners, there shall be entered in the register of beneficial ownership the names of the natural persons who hold the position of senior managing officials of the company.
The Commission may require the information from a company or a class or classes of companies relating to its/their ultimate beneficial owners or changes thereto within such time period as specified in the notice. The companies shall also provide this information to any other authority or agency of the government pursuant to the powers to call for information entrusted by law to such authority or agency. For the purpose, each company shall authorise its chief executive officer or one of its directors to provide the requisite information to the authorities concerned and provide further assistance as may be needed
This circular has been issued in pursuance of making Pakistan compliant with 40 recommendations which serve as international standards for combating ML/TF. Pakistan is a member of APG, a FATF-styled regional body, and is required to adopt FATF standards as per membership obligations and also to comply with the UN resolution.