February 27, 2020: The Commissioner, Securities, and Exchange Commission of Pakistan (SECP), Farrukh Sabzwari chaired the AML/CFT Compliance Forum organized to deliberate on progress on FATF Action Plan, deficiencies identified in Pakistan FATF/APG mutual evaluation, supervisory findings and issues in the implementation of AML/CFT regulations.
This initiative was part of the overall SECP AML/CFT capacity building program to enhance the understanding of AML/CTF obligations and elevate the AML/CFT compliance, aiming to sensitize the top decision-makers in the industry on the AML/CFT obligations. Over 45 Chief Executive Officers from Securities and Commodities markets, Insurance/Takaful companies, Non-Banking Finance Companies and Modaraba sector participated in the Compliance Forum.
Commissioner Sabzwari stated that Pakistan has demonstrated significant progress towards fulfilling FATF obligations under the Action Plan. Nonetheless, it must continue its efforts in combating money laundering and terror financing by accomplishing the remaining actionable items under ICRG -Action Plan and addressing deficiencies identified in Pakistan’s Mutual Evaluation Report.
The Commissioner reiterated SECP’s graduated approach to enforcement actions related to violations. While the penalty regime began with caution letters and warnings and graduated to financial penalties, the regulates need to be aware that these penalties were on a lower level. Repeat offenses and TFS gaps will be dealt with a lot more severity, in the future.
The commissioner reminded the audience that the SECP has revised the penalty scale for violations of AML/CFT requirements, including TFS, making the penalty scale proportionate to the non-compliance and risk sensitiveness. Significance of immediate screening and freezing actions by the industry in the case of UNSC designated individuals and entities was also stressed.
SECP also encouraged financial institutions to make use of technological solutions for effective screening of designated and proscribed persons, ongoing monitoring of transactions and reporting of suspicious transactions. SECP also offered its support to the industry to adopt such technological solutions.