The Financial Monitoring Unit (FMU) Karachi has directed real estate agents, including housing authorities, builders, real estate developers, and property dealers, dealers in precious metals and precious stones, (jewellers and gem dealers), lawyers, notaries, other legal professionals, accountants, trusts, and company service providers, etc. to follow the Red Flags Indicators to report suspicious transactions involved in terrorist financing or money laundering.
Therefore, the FMU issued instructions to the Chairman of the Securities and Exchange Commission of Pakistan (SECP) and the Director General of the Directorate General DNFBPs, FBR on Tuesday
This means that all the jewellers, accountants, and developers/builders are required to follow the instructions of the FMU. The Red Flags Indicators are related to the nature of the customers of jewellers, accountants, and developers/builders, and other DNFBPs and transaction patterns of these DNFBPs for detection of suspicious transactions.
According to the FMU, it has asked the Designated Non-Financial Businesses and Professions (DNFBPs) to follow the Red Flags Indicators for the DNFBPs sectors and effectively implement and comply with the TFS obligations.
The Red Flags Indicators for the DNFBPs Sectors on Targeted Financial Sanctions (TFS) related to Terrorism Financing (TF) and Proliferation Financing (PF) in terms of Section 7 (H) of the Anti-Money Laundering Act, 2010, shows that the reporting entities, including the DNFBPs, are required to effectively implement and comply with the TFS obligations.
Furthermore, in terms of Section 7 (1) of Anti-Money Laundering Act, 2010, the reporting entities, including DNFBPs, are also required to promptly report Suspicious Transactions Reports (STRs) to the FMU for potential Money Laundering (ML)/Terrorism Financing (TF)/Proliferation Financing (PF) related activities.
In order to identify a suspicion that could be indicative of potential activity in breach of the TFS obligations regarding Terrorism Financing (TF)/Proliferation Financing (PF) related activities, the FMU has prepared the Red Flags Indicators that are specially intended to aid the DNFBPs sectors reporting entities.
These red flags are attached as ‘Red Flags Indicators for DNFBPs Sectors on Targeted Financial Sanctions (TFS) related to Terrorism Financing (TF) And Proliferation Financing (PF)’ Encl: ‘Red Flags Indicators for DNFBPs Sectors on Targeted Financial Sanctions (TFS) related to Terrorism Financing (TF) And Proliferation Financing (PF)’, the FMU added.
If the DNFBP observes one or more of these Red Flags and forms a reasonable suspicion, the DNFBP shall take appropriate follow-up actions to prevent suspected prohibited transactions/business relationship, which may include: suspension of a transaction pending further investigations and completion of Enhanced Due Diligence; refusing to process or execute transactions when unable to obtain additional information; terminating the business relationship with the customer or client; freezing the relevant funds and assets without delay in line with legal requirements, and notifying the same to the respective AML/CFT Regulatory Authority; filing an STR to the Financial Monitoring Unit (FMU) and storing documentary evidence in line with record-keeping requirements.