SBP directs authorised dealers to follow regulations

Guidelines part of anti-money laundering scheme

KARACHI: Dealers i.e. banks and non-banking financial institutions that are authorised to deal in foreign exchange must follow regulations about know-your-customer (KYC) and customer due diligence (CDD) while opening and maintaining foreign currency accounts, said the State Bank of Pakistan (SBP).

In a press release on Tuesday, the SBP said that following the guidelines would prevent the possible use of the banking sector for money laundering, terrorist financing and illegal transfer of funds.



Under the Anti-Money Laundering Act 2010, reporting entities including authorised dealers, are under obligation to conduct CDD and maintain record of transactions, account files and documents obtained through such diligence in accordance with the regulations issued by the SBP.

“The on-going CDD is an essential part of an effective Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regime and applies to all customers to whom the authorised dealers are offering any type of service(s),” the statement said.

This includes monitoring and scrutiny of transactions undertaken throughout the course of business relationship between the bank and the customer to ensure that the transactions being conducted are consistent with the institution’s knowledge of the customer, purpose of account, business and risk profile, and the source of funds.

The SBP has advised the authorised dealers to ensure that the consolidated data/record of transactions routed through foreign currency accounts of individuals/entities must be maintained at their head offices on a monthly basis.



In addition, the SBP said data/record must be kept for those personal foreign currency accounts maintained by individuals where an aggregate amount exceeding $10,000 or its equivalent in other foreign currencies is deposited in, withdrawn from, or remitted out from the account during the month.

Data of foreign currency accounts maintained by entities where an aggregate amount exceeding $25,000 or its equivalent in other foreign currencies is deposited in, withdrawn from, or remitted out from the account during the month should also be kept, the SBP said.

Published in The Express Tribune, February 24^th, 2016.

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