Islamabad: According to a recent news report, the Federal Board of Revenue (FBR) has issued a notice to 22,000 property dealers across Pakistan, where they have asked them to register themselves on the board’s website as Designated Non-Financial Businesses and Professions (DNFBPs) to comply with the Financial Action Task Force (FATF) requirements. Real estate agents, property dealers, jewellers, brokers, housing authorities and developers have been asked to help raise Suspicious Transaction Reports (STRs).
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FBR’s Financial Monitoring Unit (FMU) has prepared a list of red flags for ascertaining Money Laundering or Terror Financing to comply with FATF requirements. These will then be used in combination with analysis of overall financial activities and client profile. These indicators include the following instances among others:
- Where the purchase/seller’s economic profile does not match the cost of the property;
- Sources of funds cannot be identified or remain unclear;
- The client or transaction is from a country or jurisdiction where FATF has called for countermeasures or enhanced client due diligence measures or where the jurisdiction has inadequate measures in place for prevention of money laundering and terror financing;
- The client or any of its associated person/entity is flagged as a result of screening against UN Security Council Resolutions (UNSCRs);
- Purchaser/seller is linked to negative news or nominated in a news report about a crime or if they are under law enforcement investigation/inquiry;
- Clients who appear to be acting on somebody else’s instructions without disclosing the identity of such persons;
- Unexplained delegation of authority by the client by using power of attorney;
- Purchaser/seller appears to be acting as a proxy for the purchase of properties and makes attempts to conceal the identity of the beneficial owner;
- A politically exposed client who is linked to negative news/crime or any client who is a member or close associate of such a politically exposed person;
- Purchaser/seller provides an unknown address, believed to be false, or simply a correspondence address
- Purchaser/seller respectively buys and sells multiple properties in a short period.
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Therefore, Real Estate Consultants Association (RECA) DHA has connected with the specialists including Minister for Finance Dr Abdul Hafeez Shaikh, Special Assistant to PM on Revenues Dr. Waqar Masood, FBR Chairman Javed Ghani and others on the matter.
Their dispute is that realtors with their restricted information on laws and details are not especially appropriate for the work. They have additionally contended that the terms like Customers Due Diligence (CDD), Enhanced Due Diligence (EDD) and Simplified Due Diligence (SDD) are enigmatically characterized in the SRO. Besides, the letters shipped off the specialists call attention to that the punishments for neglecting to do Know Your Customer (KYC) are ‘savage’.
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