Financial Monitoring Unit https://www.fmu.gov.pk Fri, 13 Aug 2021 08:58:42 +0000 en-US hourly 1 https://wordpress.org/?v=5.8.1 https://www.fmu.gov.pk/wp-content/uploads/2019/01/fav.png Financial Monitoring Unit https://www.fmu.gov.pk 32 32 Pakistan’s 3rd Follow-up Report https://www.fmu.gov.pk/third-follow-up-report/ https://www.fmu.gov.pk/third-follow-up-report/#respond Fri, 13 Aug 2021 08:58:42 +0000 https://www.fmu.gov.pk/?p=30136 The post Pakistan’s 3rd Follow-up Report appeared first on Financial Monitoring Unit.

]]>
Pakistan FUR Team During APG meeting

Pakistan’s 3rd Follow-up Report

Asia Pacific Group (APG) on Money Laundering has published results of Pakistan’s third Mutual Evaluation follow-up Report on 12 August 2021. As per the report, Pakistan has achieved compliant/largely compliant rating in 4 more recommendations leading aggregate to 35/40 Recommendations rated as Compliant (C) or Largely Compliant (LC). Pakistan is now in the top tier of countries that have achieved a rating of C/LC for over 30 of the 40 FATF Recommendations. Moreover, Pakistan has also achieved the rating of Largely Compliance / Compliance in all Big Six Recommendations of the FATF which includes R.3(Money laundering offence), R.5(Terrorist financing offence), R.6(Targeted financial sanctions related to terrorism & terrorist financing), R.10(Customer due diligence), R.11(Record keeping) and R.20(Reporting of suspicious transactions).

These results prove the sincerity along with resolve of the Government in complying with FATF requirements. These results are also a manifestation of the irreversibility and sustainability of the complete process in bringing Pakistan at par with Global AML/CFT standards.

Pakistan’s MER was adopted in August 2019 in which Pakistan was rated compliant and largely complaint in 10 out of 40 FATF Recommendations for the Technical Compliance. Pakistan carried out major legal reforms with the enactment of 17 Laws along with relevant rules and regulations. The laws not only strengthened the systems in Pakistan but also brought in the sustainability.

The post Pakistan’s 3rd Follow-up Report appeared first on Financial Monitoring Unit.

]]>
https://www.fmu.gov.pk/third-follow-up-report/feed/ 0
Drug Traficking https://www.fmu.gov.pk/drug-traficking/ Fri, 30 Apr 2021 07:13:08 +0000 https://www.fmu.gov.pk/?p=30055 The post Drug Traficking appeared first on Financial Monitoring Unit.

]]>

Drug Traficking

An STR was reported to FMU by an Exchange Company on Mr. K for frequently receiving foreign remittances from multiple unrelated individuals belonging to different countries Philippines, Spain, Italy, USA.

Mr. K was resident of Peshawar and declared himself as self employed. During analysis of remittances received by Mr. K, it was observed that the Mr. K had received three remittances from an individual namely “Mr. G” who was based in Italy. The purpose of remittances was gift and the total amount of funds involved was PKR 374,666/-

While conducting search on risk screening database it was identified that the remitter “Mr. G” was positively matched for alleged links with Italian Organized Criminal Group which was also involved in drug trafficking related crimes Keeping in view Mr. G’s alleged links with organized criminal group, it was suspected that the proceeds remitted to Mr. K might be related to drugs trafficking.

Based on above analysis, the financial intelligence was shared with Anti-Narcotics Force under the AML Act, 2010 for any action deemed appropriate.

The post Drug Traficking appeared first on Financial Monitoring Unit.

]]>
Pakistan’s 2nd Follow-up Report https://www.fmu.gov.pk/second-follow-up-report/ Wed, 09 Sep 2020 12:59:46 +0000 http://www.fmu.gov.pk/?p=2953 The post Pakistan’s 2nd Follow-up Report appeared first on Financial Monitoring Unit.

]]>
Pakistan FUR Team During APG meeting

Pakistan’s 2nd Follow-up Report

Asia Pacific Group (APG) on Money Laundering has published results of Pakistan’s second Mutual Evaluation follow-up Report on 2 June 2021. As per the report, Pakistan has achieved compliant/largely compliant rating in 31 out of 40 FATF Recommendations in Technical Compliance. These results prove the sincerity along with resolve of the Government in complying with FATF requirements. These results are also a manifestation of the irreversibility and sustainability of the complete process in bringing Pakistan at par with Global AML/CFT standards. These results are manifestation of a whole of government approach adopted to achieve the same. An upgrade of 21 Recommendations within this short period of time remains unprecedented in FATF history. FATF’s Mutual Evaluation Report (MER) of jurisdictions is assessed in two domains i.e., Technical Compliance/Legal Instruments (40 FATF Recommendations) and Demonstration of Effectiveness (11 Immediate Outcomes). Pakistan’s MER was adopted in October 2019 in which Pakistan was rated compliant and largely complaint in 10 out of 40 FATF Recommendations for the Technical Compliance. After adoption of MER, Pakistan was placed under Post Observation Period by FATF which expired in February 2021. During the said period, Pakistan carried out major legal reforms with the enactment of 14 Federal Laws & 3 Provincial Laws along with relevant rules and regulations, most prominently the amendments in the Anti Money Laundering Act and the Anti-Terrorism Act. The laws not only strengthened the systems in Pakistan but also brought in the sustainability. Pakistan submitted its report to FATF on its Technical Compliance on 1st October 2020. APG has acknowledged that Pakistan has made notable progress in addressing the Technical Compliance deficiencies identified in its MER and has been re-rated compliant /largely compliant in 31 out of 40 FATF Recommendations.

Pakistan has also submitted re-rating requests to APG on four more recommendations in next follow-up report on 1st February 2021 which are under review by APG. The technical upgrades achieved will help manifest achievement of effectiveness in 11 immediate outcomes of the APG MER process. As a result of this substantial progress, APG has decided to move Pakistan from enhanced (expedited) to enhanced follow-up; and Pakistan will continue to report back to the APG on progress to strengthen its implementation of AML/CFT measures.

 

The post Pakistan’s 2nd Follow-up Report appeared first on Financial Monitoring Unit.

]]>
Home Remittances for Terrorism Financing https://www.fmu.gov.pk/home-remittances-for-terrorism-financing/ Sat, 13 Jun 2020 08:32:55 +0000 http://www.fmu.gov.pk/?p=2917 The post Home Remittances for Terrorism Financing appeared first on Financial Monitoring Unit.

]]>

 

Home Remittances for Terrorism Financing

Mr. A opened PKR account with ABC Bank as Muhtamim (Caretaker) in the name of a religious school in March 1984. Mr. A was declared deceased on 19-08-2011 in the Medical Certificate of Cause of Death produced by the executive body of the said Maderesa to the Bank. Later on, Mr. B was nominated as the new Muhtamin to run the affairs of the religious school by its executive body in 2011. The account was reportedly opened to deposit funds and receive home remittances therein.

Reportedly, the Madresa under discussion was registered with the Registrar of Firms, under Societies Registration Act, 1860 under Registration No. 202 issued on 19-Jul-1980. The main purpose of the Madresa was to provide Islamic education and life necessities to the students of the aforesaid Madresah.

The reporting bank noted that the transactions in the Madresa account did not make any economic and business sense and did not commensurate with the profile of the customer. The subject customer has been receiving heavy amount of frequent inward remittances in the account with the purpose “charity” as mentioned on the swift messages. The funds were later on withdrawn from the account in cash or transfers. In three years, inward remittances amounting to Rs. 63,895,353/- had been received in the account.

On analysis of the statement of the account, it was observed that high value home remittances were received in the Madresa account in different periods of time. The remittances were sent by “XYZ” charity organization located in a Middle Eastern country. It operates as an independent body under the supervision of the Ministry of Islamic Affairs. There was no adverse information on the public domain about the XYZ organization; however, the utilization of the funds received in the account of Madresa was unknown.

In addition to the account, the Muhtamim of the Madresa Mr. B was also maintaining several other accounts with ABC Bank wherein high value transactions with unrelated counterparties were conducted which did not make any economic sense.

In view of the foregoing, the financial intelligence was shared with FIA on account of TF/ground check under the provision of AML Act, 2010 for the measure deemed appropriate.

 

The post Home Remittances for Terrorism Financing appeared first on Financial Monitoring Unit.

]]>
TF, Tax Evasion and Money Laundering https://www.fmu.gov.pk/tf-tax-evasion-and-money-laundering/ Sat, 13 Jun 2020 08:26:24 +0000 http://www.fmu.gov.pk/?p=2915   TF, Tax Evasion and Money Laundering FMU received a Suspicious Transaction Report (STR) from ABC Bank against Mr. Sun who was doing Marble Business…

The post TF, Tax Evasion and Money Laundering appeared first on Financial Monitoring Unit.

]]>
 

TF, Tax Evasion and Money Laundering

FMU received a Suspicious Transaction Report (STR) from ABC Bank against Mr. Sun who was doing Marble Business and had extremely high turnover in his accounts. Based on the reported STR, FMU conducted a detailed analysis of all reported STRs/CTRs against Mr. Sun and his business. During analysis, turnover of billions of rupees was observed in suspects multiple accounts maintained with different banks, whereas no tax was paid by him. Based on this analysis, FMU shared a Financial Intelligence against Mr. Sun with relevant LEA, for suspected predicate offence of tax evasion and ML.

Based on FMU’s Financial Intelligence, LEA initiated an enquiry against the suspect and the news came in the newspapers. Based on adverse media news, additional STRs were reported to FMU by different banks against multiple accounts of Mr. Sun, along with details of his major counterparties.

During analysis of these additional STRs on Mr. Sun, multiple STRs were found against many of the given counterparties of Mr. Sun, reported by different banks for having inconsistent activity in their accounts. Most of his counterparties were general order suppliers and turnover in their accounts was found to be in millions of rupees. Based on FMU’s analysis, Mr. Sun and his counterparties were suspected to be involved in Hawala, Smuggling and Tax Evasion.

Meanwhile, FMU received a request of information from one LEA against a few accounts which were allegedly being exploited for transnational TF. A search was conducted against these accounts across FMU’s database and STRs/CTRs were found against a few of these accounts which were maintained by three different individuals (Mr. X, Mr. Y and Mr. Z). Two of these individuals (Mr. X and Mr. Y) were identified to be the counterparties of Mr. Sun. Thus, a suspicion was raised against Mr. Sun and his counterparties for their possible involvement in TF also.

Based on new information, analysis of STRs/CTRs of all the suspects (Mr. Sun, his counterparties and other related individuals) was done and a collective turnover of billions of rupees was identified in the accounts of all the suspects. The activity in the suspects’ accounts was not in line with their profile and transaction with unrelated counterparties in far flung areas (including High Risk Regions) of the country were observed. Many of the suspects were found to be transacting with each other on frequent basis. Based on FMU analysis, all the suspects appeared to be part of an organized network involved in TF, Hawala/Hundi and smuggling. Thus, financial intelligence on all the individuals was shared with the relevant LEAs and the financial regulator.

On FMU’s intelligence the concerned LEAs initiated inquiries with following outcomes:

Taxation Authorities (FBR-IR) registered a case against Mr. Sun and his associates under Income Tax Ordinance, 2001 along with Anti Money laundering Act, 2010. The suspects were charged for committing tax theft of more than PKR 1.26 billion over the period of last 5 years.

The Customs Court issued bail-able arrest warrants for four accused. The Customs and Taxation’s Special Court granted permission to attach ten immovable properties and ten bank accounts of four accused. Further investigation is under progress.

Counter Terrorism Wing (CTW) of FIA, initiated an investigation against Mr. Sun and his associates for their involvement in TF and ML. FIA-CTW lodged an FIR against Mr. Sun and his associates under different laws including AML Act 2010 and Anti-Terrorism Act 1997. During the course of enquiry, sufficient incriminating evidence came on record substantiating that the said individuals committed the offence of TF, using channels of Hawala and employing tactics of ML and forgery. The case is under investigation.

SBP (central bank of Pakistan) conducted a thematic inspection covering multiple banks and carried out focused onsite review of the bank accounts and as a result, imposed monetary penalties on multiple banks for violation of Prudential Regulations for AML/CFT.

The post TF, Tax Evasion and Money Laundering appeared first on Financial Monitoring Unit.

]]>
Wire transfers/Use of Foreign Bank Accounts https://www.fmu.gov.pk/wire-transfer-terrorism-financing/ Sat, 13 Jun 2020 08:17:37 +0000 http://www.fmu.gov.pk/?p=2910 The post Wire transfers/Use of Foreign Bank Accounts appeared first on Financial Monitoring Unit.

]]>

Wire transfers / Use of foreign bank accounts

STR was reported against an individual Ms. Z based on an inconsistent activity in her accounts and an adverse media news against her for her alleged involvement in anti-estate activities.

Ms. Z was maintaining two PKR accounts in ABC Bank. One was in the name of NGO where she was the Chairperson and also one of the signatories to that account while the second account was in her personal name. Two inward foreign remittances were received in the NGO account from a foreign country as donations.

The funds from NGO account were transferred to Ms. Z’s personal account and to the accounts of her parents. Since the signatories of the NGO account were Ms. Z and her younger sister, these transfers created suspicion about the possible misuse of NGO’s funds for personal gains.

Considering the elements of anti-state activities and possible misuse of donations, the financial intelligence was shared with relevant LEA.

LEA started investigation based on FMU’s intelligence and registered a case against Ms. Z and her family members. The case is in progress.

The post Wire transfers/Use of Foreign Bank Accounts appeared first on Financial Monitoring Unit.

]]>
Use of False Identification in Terrorism Financing https://www.fmu.gov.pk/use-of-false-identification-terrorism-financing/ Sat, 13 Jun 2020 08:14:24 +0000 http://www.fmu.gov.pk/?p=2908 The post Use of False Identification in Terrorism Financing appeared first on Financial Monitoring Unit.

]]>

Use of False Identification in Terrorism Financing

An STR was reported to FMU by ABC Bank on MW s/o SM which was one of the fake identities of an individual AM. During analysis it was observed that the suspect opened his personal account with the ABC bank for saving purpose and declared himself as Freelancer engaged in business of real estate and cars.

 

During analysis it was revealed that suspect had received funds via different modes of transactions from different individuals maintaining accounts at different banks. The funds were mostly utilized via ATM and transfers transactions. It was further observed that suspect had transferred PKR 2 Million of funds to a real estate agent. While conducting FMU database search two accounts of real estate agent accounts were also identified. Keeping in view the analysis and finding the financial intelligence was shared with Federal Investigation Agency (FIA) and State Bank of Pakistan (SBP).

 

Upon receipt of financial intelligence from FMU, FIA’s Counter Terrorism Wing initiated an investigation wherein it was identified that the person “MW” in respect of whom financial intelligence was generated by FMU was infact a leader of a terrorist organization and his actual name was “AM” (as per media reports killed by US drone attack), who was also designated under UNSCR 1267. It was further revealed that he had also got issued 02 more fake identification cards with fake particulars and, subsequently, indulged in real estate business under these fake identities. (A separate case was registered by FIA whereby accused involved in facilitating the accused AM in getting fake identity cards was convicted).

 

The investigation team unearthed various immovable properties worth of Rs. 100 million approx. (as per current market rates) and 03 bank accounts with balance of Rs. 1.5 million of the accused procured under fake identity.

The post Use of False Identification in Terrorism Financing appeared first on Financial Monitoring Unit.

]]>
Reports https://www.fmu.gov.pk/statistical-reports/ Mon, 28 Oct 2019 07:03:42 +0000 http://www.fmu.gov.pk/?p=2566 The post Reports appeared first on Financial Monitoring Unit.

]]>

Reports

Quarterly Report as on June 2021

Quarterly Report as on March 2021

Statistical Report as on June 2020

Statistical Report as on March 2020

Statistical Report as on December 2019

Statistical Report as on September 2019

The post Reports appeared first on Financial Monitoring Unit.

]]>
Enhancing Effectiveness of Sanctions Screening Programs https://www.fmu.gov.pk/enhancing-effectiveness-of-sanctions-screening-programs/ Tue, 02 Jul 2019 04:41:53 +0000 http://www.fmu.gov.pk/?p=2370 The post Enhancing Effectiveness of Sanctions Screening Programs appeared first on Financial Monitoring Unit.

]]>

Enhancing Effectiveness of Sanctions Screening Programs

Background of Study

The aim of the study was to analyze the tendency of use of conventional and non- conventional banking channels by the proscribed individuals, and the effectiveness of sanctions screenings by the banking sector to choke -out terrorism and/or terrorism financing related activities. To fulfill this objective the strategic analysis was carried out based on six hundred sixteen (616) suspicious transactions reports raised by the banks mainly on the reason of listing of various individuals on Schedule-IV of Anti-Terrorism Act, 1997.  The key findings derived from this study are laid below:

Analysis & Findings

During the analysis of these suspicious transaction reports it has been noticed that:

  • The individuals listed on Schedule-IV have attempted conventional banking for the receipt of remittances as walk- in customers.
  • They have also attempted the services of branchless banking by maintaining mobile wallet accounts for the receipts/ payments of funds.

The break- up of status of the transactions made/ attempted by the individuals involved in these reports is given in chart below:

(Note: This Chart is based on analysis of 616 STRs)

During analysis of these suspicious transaction reports, it was noticed that 77 % of the transactions/accounts related to Schedule-IV individuals were blocked, and 23% were rejected (where services were denied) by the banks. The above transaction status chart reflects the continuous improvements in effectiveness of the sanction screening programs applied by the banks in Pakistan.

The above percentages  also show the level of collaborative efforts  made through compliance forums and joint awareness sessions across the country by the relevant stakeholders such as FMU, SBP, SECP, NACTA, Law Enforcement Agencies and reporting entities  to fight against money laundering and terrorism financing.

Conclusion & Recommendations

There is no single compliance program suitable for every financial institution (FIs), however, a common thing for FIs is the formation of a Sanctions Compliance Program (SCP), as a part of the anti-money laundering and financing of terrorism (AML/CFT) policies. While, designing of Sanctions Compliance Program (SCP), FIs can consider following key pillars for effective SCP.

  1. Policies & Procedures

Clear policy and procedures set the right tone for the organization. It is important for the policy to be easy to understand and provide clear guidance to different units and individuals within the organization.

  1. Country Supplements/ Addendums

It is important to take into account the difference between local regulations and business nature and supplement/ addendums to the policy and procedures as needed. Conflict of laws between local regulations versus headquarters’ policy need to be clearly addressed.

  1. Risk Assessment

Risk Assessment provides an overall view of the sanctions risk faced across the organization and helps to ensure that it is aligned to the organization’s appetite.

It helps to identify emerging risk and control deficiencies. Without an effective risk assessment, is like driving in the dark without headlights.

  1. Sanctions Leadership

Strong sanctions leadership will drive success. Clear division of roles and responsibilities will ensure the controls are effectively implemented, and issues are being escalated and dealt with promptly.

  1. Screening & Transaction Monitoring

Technology is becoming increasingly important in helping an organization to comply with sanctions regulations. Millions of transactions happen daily, effective screening and monitoring will help identify risky transactions efficiently.

  1. Training & Awareness

Trained personnel and organizational awareness of sanctions risk is one of the best defenses. Training should be updated from time to time and should be relevant to the function of the personnel. 

  1. Audit & Assurance

Audit and Assurance should be regularly performed, both internally and through qualified external professionals.

Periodic health checks will help to ensure that controls are still effective and relevant.

The post Enhancing Effectiveness of Sanctions Screening Programs appeared first on Financial Monitoring Unit.

]]>
Strategic Analysis on Schedule-IV Listed Individuals https://www.fmu.gov.pk/schedule-iv-listed-individuals/ Thu, 20 Jun 2019 08:11:51 +0000 http://www.fmu.gov.pk/?p=2354 The post Strategic Analysis on Schedule-IV Listed Individuals appeared first on Financial Monitoring Unit.

]]>

Strategic Analysis

Schedule-IV Listed Individuals

Reference #: FM/Proscribed Individuals- Schedule-IV ATA, 1997 /2018

Objective

The focus of the study was to analyze the transaction patterns, demographic and professional profile of the individuals proscribed under Schedule-IV of ATA 1997(which is the law that deals with domestic listing under UNSCR 1373 in Pakistan)

Background of analysis

The analysis was carried out on the basis of significant number of suspicious transactions reports submitted by the banks in the pretext of listing of various individuals under Schedule-IV of ATA 1997.The break down of the reports analyzed for the study is given in Figure 1 below;

Findings of the Study

The key findings derived from this study are as follows;

  • These individuals are not limited to only one geographic location of the country.
  • They are from all walks of life such as salaried, businessman, farmers, students and some of them reportedly found PEPs as well.
  • Some of the individuals are also found working/ have affiliations with trusts and charitable organizations.
  • These individuals are not only maintaining accounts in conventional banks but are also using the channel of branch-less banking.
  • They are also receiving remittances through banks over the cash counter i.e. as a walk in customer.
  • During analysis it has also been noticed that some of the individuals listed on Schedule -IV of ATA, 1997 have performed repeated remittance transactions over the counter of the banks.
  • They had also conducted transactions in the branches of other cities i.e. other than their home city provided on CNIC.
  • Some of the individuals are holding more than one bank account.
  • Through some bank accounts it has also been reflected that individuals listed on Schedule IV of ATA, 1997 are maintaining joint accounts with other individuals and/ or holding mandate in it.
  • During analysis of the reported transactions it has been noticed that these individuals were also using credit card, demand finance, car finance, demand draft and micro finance facilities of the banks.
  • The financial institutions have taken actions in accordance with the Anti-Terrorism Act, 1997 upon proscription of persons.

Based on above findings the analysis was shared with law enforcement agencies for probing of matter and necessary actions.

The post Strategic Analysis on Schedule-IV Listed Individuals appeared first on Financial Monitoring Unit.

]]>