SBP issues framework to strengthen AML/CFT regime and restrict misuse of banking channel

October 15, 2019 (MLN): The State Bank of Pakistan (SBP) has prepared a comprehensive framework to strengthen trade related Anti Money Laundering/Combating Financing of Terrorism (AML/CFT) regime and restrict possible misuse of banking channel.

Accordingly, SBP has advised Authorized Dealers (ADs) to upgrade their systems and controls and bring policies and procedures in line with the requirements of the framework to ensure meticulous compliance with the provisions thereof with immediate effect.

‘The provisions of this framework are in addition to and not a replacement of already issued instructions on the subject of ML/FT risks. Therefore, the compliance of the same shall not absolve ADs from their legal and regulatory obligations under prevailing AML/CFT laws/rules and regulations or any other relevant law in force’ the notification issued by SBP said.

ADs have been also advised to educate their clients about their obligation of ensuring (a) correct declaration of particulars on the prescribed forms, (b) utilization of foreign exchange for the exact purpose for which it is acquired by them and (c) repatriation of foreign exchange that represents the full export value of goods.

‘In the event, it is found that material information required to be submitted on the prescribed forms has been omitted or suppressed, foreign exchange is misutilized by a client of an AD or export proceeds repatriated by a client does not represent the full export value of goods, SBP shall initiate penal action against such delinquent parties under relevant provisions. Further, the matter shall also be reported to relevant stakeholders for necessary action under the laws being administered by them’ the notice added.

Link to the full document

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