SBP tells Ecs: No services for persons proscribed under UNSC Act and ATA

The State Bank of Pakistan (SBP) has restricted all Exchange Companies from providing services to individuals designated under UNSC Resolutions or proscribed under ATA, 1997. The State Bank has issued detailed guidelines on Targeted Financial Sanctions (TFS) for prevention of Terrorism Financing and Proliferation Financing under UNSC Act and exchange companies have been asked for strict compliance of the statutory and regulatory framework.
According to SBP circular, under Para 14, Chapter 6 of the Exchange Companies Manual - 2017 the Exchange Companies and Exchange Companies of ''B'' were advised to ensure strict compliance of Statutory Regulatory Orders (SROs) and notifications issued by the government of Pakistan under the United Nations (Security Council) Act, 1948 and The Anti Terrorism Act (ATA), 1997, respectively.
In this regard, detailed guidelines on Targeted Financial Sanctions (TFS) for prevention of Terrorism Financing and Proliferation Financing under UNSC Act, 1948 and ATA, 1997 have been issued and in the light of attached guidelines, Exchange Companies and Exchange Companies of ''B'' category are required to ensure meticulous compliance of the statutory and regulatory framework.
Further, the SBP has advised all exchange companies to take some new measures to ensure compliance.
As per fresh directives, no services will be provided to individuals designated under UNSC Resolutions or proscribed under ATA, 1997 and the company''s Information System managing the transactions should be able to screen the designated and proscribed individual on real time basis. The updated consolidated list of persons designated/proscribed under UNSC Act 1948 and ATA, 1997 respectively should be updated in the company''s Information System and should be available throughout the company''s network including franchises/third party payment booths etc. SBP during the course of inspection would check the availability of these updated lists in Exchange Companies.
Exchange companies have been asked that Unique Identification Numbers e.g. CNICs, Passports, etc, available in the UNSC Sanction Lists and lists of proscribed individuals under ATA, 1997 will be blocked in company''s information system. Any similarity between the identification information of the customer and that of designated/proscribed entities and persons should be properly investigated for necessary action, as per law, including reporting to the Financial Monitoring Unit (FMU).
Special attention will be given to the screening of remittances received from or transfer made to ''high-risk'' jurisdictions, as identified by Financial Action Task Force (FATF).
Internal controls of exchange companies should be strengthened by means of deploying adequate systems for real time screening and allocating sufficient/trained resources to ensure meticulous compliance of TFS regime.
Antecedents of all employees, franchise owners and their employees along with the persons associated with the third party business relationships e.g. landlords, vendors etc. will be reviewed on an ongoing basis to ensure that no designated/proscribed individual is associated/working with the Exchange Companies and Exchange Companies of ''B'' category.
The SBP has also directed exchange companies that trainings to compliance with these directives should be arranged for all the staff/officers including the personnel of third parties arrangements.
Government of Pakistan has already prescribed penalty up to Rs 10 million for non-compliance of sanctions regime under the United Nations (Security Council) Act, 1948 and the Anti-Terrorism Act, 1997.
The SBP has warned that failure to comply with the above instructions shall also attract regulatory action under the relevant provisions of Foreign Exchange Regulation Act, 1947 in addition to penalties prescribed under other laws.
Exchange Companies and Exchange Companies of ''B'' Category have also been advised to regularly access the aforesaid Consolidated Lists to ensure compliance with measures in line with the UNSC resolutions.