Financial institutions asked to identify beneficial owner

ISLAMABAD: The financial institutions need to carry out self-risk assessment relating to money laundering and terrorist financing risks faced by them, an official at Securities & Exchange Commission of Pakistan said on Monday.

“The FATF regulations are mandatory to adopt for Pakistan as a member of the Asia Pacific Group on Money Laundering to ensure that criminals are not able to hide their identity through use of complex ownership structure of companies, partnerships, trusts or other similar forms,” Khalida Habib, Executive Director SECP, said addressing an awareness workshop.

“The financial institutions are now required to identify the ultimate beneficial owner.” The SECP held a full-day workshop on anti-money laundering/countering financing of terrorism (AML/CFT) as part of their efforts to sensitise securities, commodities, non-banking financial institutions and insurance sectors on the subject.

Habib told the audience that commission notified Anti-Money Laundering and Countering Financing of Terrorism Regulations, 2018, in June this year which were fully compliant with the FATF 40 recommendations and shift the perspective from one-size-fits-all to the risk-based approach, enabling financial institutions to focus their resources on the high-risk customers.

Shauzab Ali, Commissioner SECP, said the commitment from higher-level management was essential for the implementation of the AML/CFT regime. Ali proposed that such interaction with stakeholders should be made a regular feature by conducting these awareness sessions more often.

An SECP statement said the workshop focused on sharing best global practices, legislative framework, technological enhancements and streamlining procedures in order to apply national AML/CFT measures and develop an effective risk assessment and compliance framework.

The seminar was last in a series of awareness/ training sessions carried out as part of the outreach program to raise understanding on the risks and obligations there under. The SECP said subsequent awareness and training sessions would be conducted next month to enhance capacity building of the regulated sector with respect to AML/CFT.