What are the sources of Money Laundering (ML)?
Money laundering may not just involve wealth related to Drug Trafficking / Terrorism financing. The list of crimes identified by the Financial Action Task Force (FATF) as generators of criminal wealth also included:
AML Regulatory Regime in Pakistan:
What is the AML regulatory regime in Pakistan?
Presently, the Pakistan AML/CFT regime is governed by the following (National & International) legislation:
National
International
A) Penalties under Section 4 of the AML/CFT Act 2010
Whoever commits the offence of money laundering shall be punished: With rigorous imprisonment for a term which shall not be less than one year but may extend up to ten years
And shall also be liable to a fine which may extend up to twenty-five million rupees And shall also be liable to forfeiture of property involved in money laundering or property of corresponding value
The fine may extend up to one hundred million rupees in the case of a legal person. Any director, officer or employee of such legal person who is also found guilty under this section shall also be punishable as mentioned above
B) Reporting of Transactions (STRs/ CTRs) Under Section 7 of the AML/CFT Act 2010
Bank is liable to comply with the provisions of the AML Act, rules and regulations issued there under for reporting suspicious transactions/currency transactions in the context of money laundering, financing of terrorism and financing of proliferation if it:
Involves funds derived from illegal activities or is intended or conducted to hide or disguise proceeds of crime; Is designed to evade any requirements of this Act; Has no apparent lawful purpose after examining the available facts, including the background and possible purpose of the transaction; or
Involves financing of terrorism, including funds collected, provided, used or meant for, or otherwise linked or related to, terrorism, terrorist acts or organizations and individuals concerned with terrorism
C) Law Enforcement Agencies (LEAs) Inquiries
Inquiries may be initiated against the Account Holder by various LEAs like NAB, FBR, FIA, NACTA etc.
| Money Laundering |
|---|
| Terrorist Financing |
| Hawala / Hundi |
| Proliferation Financing |
| Unauthorized Money Changer |
| Trade-Based Money Laundering |
| Ponzi Scheme/Multilevel Marketing (MLM)/Network Marketing |
| Use of fake identification document for the establishment of relationship/execution of transaction |
| Cryptocurrency / Virtual currency (like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond or Initial Coin Offerings (ICO) tokens) |
| DO’s | DON’Ts |
|---|---|
| Provide a Valid Identity Document & Identification Information | Use of Individual Personal account for Business purposes |
| Provide a Source of Income / Wealth | Opening of Numbered Account |
| Provide Purpose of Account Opening | Violation of legal & regulatory requirements |
| Provide details of the Ultimate Beneficial Owner (UBO) | Use of Personal accounts for collection/distribution of donations |
| Provide details of the Mandatee & Purpose of the Mandate | Dealing with Shell organizations/companies in trade transactions |
| Provide all relevant authentic documents (for partnerships, Companies, NGOs/NPOs, etc.) | Opening of Government accounts in the personal names of the Government official(s) |
| Provide Purpose & evidence of inward & outward Transactions (Cash & Non-Cash transactions) | Misrepresentation of quantity and commodities in trade transactions |
| NGOs/ NPOs, Charities and Trusts accounts are used for legitimate purposes only | Alteration of Identity documents and Trade related documents |
| Inform the bank of any change in the personal record including: Address Contact number CNIC validity Employment/business status Identification document |
Ignore any communication (letter/e-mail/SMS/public notice etc.) from your bank |
