State Bank of Pakistan (SBP) with the objective
to preserve the integrity, soundness and
safety of the financial system, has been
endeavoring to prevent the possible use
of the banking sector for money laundering,
terrorist financing and other illicit activities.
Towards this end, SBP has issued various
instructions/ guidelines to the banks/DFIs
from time to time.
2. Attention of all banks/DFIs is invited
towards Regulation-1 (Customer Due Diligence
- CDD) of AML/CFT Regulations, which requires
banks/DFIs, on on-going basis, to perform
such CDD measures as may be appropriate
to its existing customers having regard
to their own assessment of materiality and
risk but without compromise on identity
and verification requirements. Thus, ongoing
CDD is an essential part of an effective
AML/CFT regime.
3. In this context, it is reiterated that
banks/DFIs must ensure strict observance
of all applicable instructions including
identification and verification of customers
and their beneficial owner(s) and obtain
information on the purpose and intended
nature of business relationship. The monitoring
mechanism in place at banks/DFIs should
be adequately resourced and strengthened
to ensure that the transactions being conducted
in the accounts are consistent with the
banks/ DFIs’ knowledge of their customer,
business, risk profile and the source of
funds. With the objective to know the ultimate
beneficial ownership of accounts/ transactions,
the banks/DFIs shall enhance their efforts
to obtain relevant information and examine
background and purpose of all complex, unusual
large transactions and unusual patterns
of transactions, which do not commensurate
with customer profile or have no apparent
economic or visible lawful purpose.
4. Banks/DFIs are also advised to refer
to the SECP Circular No. 16 of 2018 dated
August 29, 2018 (https://www.secp.gov.pk/laws/circulars/)
through which the Commission has directed
all companies to enhance their efforts to
obtain and maintain up-to-date information
relating to their ultimate beneficial owners,
i.e. natural persons or individuals who
ultimately own or control the company. The
banks/ DFIs may seek such ultimate beneficial
ownership information from their relevant
customers during CDD process.
5. Moreover, with the view to further strengthen
the measures already in place and mitigate
the money laundering and terrorist financing
risks, banks/DFIs are advised to immediately
take following steps:
a) Ensure optimal utilization of biometric
technology and carry out biometric verification
of the existing customers (if already not
done) as per following timelines and thresholds:
Priority |
Category of Customers |
Threshold |
Timeline |
High Priority |
Listed /Public Limited Companies |
Account turnover exceeding PKR 1,000 million for any of the calendar year 2016, 2017 or for a period since January 1, 2018 to September 30, 2018. |
30th November 2018 |
Private Limited. Companies |
Account turnover exceeding PKR 500 million for any of the calendar year 2016, 2017 or for a period since January 1, 2018 to September 30, 2018. |
All customers except Public/Private Limited Companies |
Account turnover exceeding PKR 250 million for any of the calendar year 2016, 2017 or for a period since January 1, 2018 to September 30, 2018. |
Medium Priority |
Listed /Public Limited Companies |
Account turnover from PKR 500 million to PKR 1000 million for any of the calendar year 2016, 2017 or for a period since January 1, 2018 to September 30, 2018. |
January 31, 2019 |
Private Limited. Companies |
Account turnover from PKR 250 million to PKR 500 million for any of the calendar year 2016, 2017 or for a period since January 1, 2018 to September 30, 2018. |
All customers except Public/Private Limited Companies |
Account turnover from PKR 100 million to PKR 250 million for any of the calendar year 2016, 2017 or for a period since January 1, 2018 to September 30, 2018. |
Normal |
All other accounts not covered in the above categories |
30th June 2019 |
Note
i. Biometric verification of persons authorized
to open and operate the account of legal
entities or legal arrangements shall be
conducted.
ii. In case of customers whose eligible
identity documents are other than biometrically
verifiable documents, re-validation/ verification
of identity shall be done based on documents,
data or information obtained from customer
and/or from reliable and independent sources
having regard to bank/DFI’s own assessment
of materiality and risk.
b) Confirm compliance status of their internal
risk review of remaining legacy portfolio
of customers, as required vide BPRD Circular
Letter No. 20 dated June 14, 2017 latest
by October 31, 2018.
6. SBP during the course of inspection
will particularly assess the compliance
of above requirements and non-compliance
will attract appropriate enforcement action
in accordance with relevant laws.
7. Please acknowledge receipt.