Circulars/Notifications - Exchange Policy Department  
 FE Circular No. 09 of 2018

October 18, 2018

The Chief Executives of all
Exchange Companies and
Exchange Companies of ‘B’ Category

Dear Sir(s) / Madam,

Compliance of Government of Pakistan’s Statutory Regulatory Orders (SROs)/Notifications
issued under United Nations Security Council (UNSC) Resolutions / Anti Terrorism Act (ATA), 1997

     Attention of the Exchange Companies and Exchange Companies of ‘B’ category is invited towards Para 14, Chapter 6 of the Exchange Companies Manual – 2017 whereby it has been advised to ensure strict compliance of Statutory Regulatory Orders (SROs) and Notifications issued by the Government of Pakistan under the United Nations (Security Council) Act, 1948 and The Anti Terrorism Act (ATA), 1997 respectively.

2. In this regard, detailed guidelines on Targeted Financial Sanctions (TFS) for prevention of Terrorism Financing and Proliferation Financing under UNSC Act, 1948 and ATA, 1997 are attached as annexure. In the light of attached guidelines, Exchange Companies and Exchange Companies of ‘B’ category are required to ensure meticulous compliance of the statutory and regulatory framework. Further, following minimum measures shall be taken:

a. No services shall be provided to individuals designated under UNSC Resolutions or proscribed under ATA, 1997.

b. The company’s Information System managing the transactions shall be able to screen the designated and proscribed individual on real time basis.

c. The updated consolidated list of persons designated / proscribed under UNSC Act 1948 and ATA, 1997 respectively shall be updated in the company’s Information System and should be available throughout the company’s network including franchises/third party payment booths etc. SBP during the course of inspection would check the availability of these updated lists in Exchange Companies.

d. Unique Identification Numbers e.g. CNICs, Passports etc. available in the UNSC Sanction Lists and lists of proscribed individuals under ATA, 1997 shall be blocked in company’s information system. Any similarity between the identification information of the customer and that of designated / proscribed entities and persons should be properly investigated for necessary action, as per law, including reporting to the Financial Monitoring Unit (FMU).

e. Special attention shall be given to the screening of remittances received from or transfer made to ‘high-risk’ jurisdictions, as identified by Financial Action Task Force (FATF).

f. Internal controls shall be strengthened by means of deploying adequate systems for real time screening and allocating sufficient/trained resources to ensure meticulous compliance of TFS regime.

g. Antecedents of all employees, franchise owners and their employees alongwith the persons associated with the third party business relationships e.g. landlords, vendors etc. shall be reviewed on an ongoing basis to ensure that no designated/proscribed individual is associated/working with the Exchange Companies and Exchange Companies of ‘B’ category.

h. Trainings on the subject matter shall be arranged for all the staff/officers including the personnel of third parties arrangements.

3. Government of Pakistan has already prescribed penalty up to Rs. 10 million for non-compliance of sanctions regime under the United Nations (Security Council) Act, 1948 and the Anti-Terrorism Act, 1997.

4. Failure to comply with the above instructions shall also attract regulatory action under the relevant provisions of Foreign Exchange Regulation Act, 1947 in addition to penalties prescribed under other laws.

5. Please bring the above to the notice of all your constituents.


Encl: (As above)



Yours truly,

(Arshad Mehmood Bhatti)

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