FBR issues AML/CFT guideline for Jewelers

February 16, 2021

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Pakistan’s Tax watchdog, Federal Board of Revenue (FBR) has directed the jewellery Businesses to conduct enhanced due diligence on politically exposed clients (PEPs) under FBR rules to combat money laundering and terrorist financing for businesses and certain non-financial professions.

The FBR has released the Guidelines for Dealers in Precious stones and Metals (DPMS) with guidance on how to implement and comply with AML / CFT laws.

All DPMSs should review the guidelines to determine if they meet the DPMS definition and engage in cash transactions with customers equal to or greater than the Rs 2 million cash limit. The higher risk class includes those customers who use cash for transactions of Rs. 2 million or more, such as Politically exposed personnel, foreign visitors etc.

Newly issued FBR guidelines focus on anti-money laundering and terrorist financing measures such as risk assessment, AML / CFT program, customer due diligence (CDD), beneficial ownership, politically exposed persons, third party trust, targeted financial sanctions and reporting Suspicious Transactions (STR)), Currency Transaction Report (CTR), and Record-Keeping.

According to the FBR, Politically Exposed Persons (PEPs) are people who, because of their position in public life, may be vulnerable to corruption. Increased due diligence requirements for politicians and their close associates and family members are requirements of the rule.

In accordance with Section 9 (1) of the FBR Anti-Money Laundering / Terrorist Financing Rules for certain non-financial businesses and professions, enhanced due diligence is to be applied to all politicians, their close associates and their families. Unlike other clients, the enhanced due diligence will depend on whether the client (and beneficial owner) is assessed as high risk.

The policies are defined in the definitions sections of the FBR Anti-Money Laundering / Terrorist Financing Rules for specific non-financial businesses and professions, namely: