The State Bank of Pakistan (SBP) on Friday issued updated Guidelines on Compliance of United Nations Security Council (UNSC) resolutions relate to Anti Money Laundering and Combating the Financing of Terrorism (AML/CFT) and asked banks/ DFIs and MFBs for proper implementation on these guidelines.
The State Bank has also asked banks/DFIs/MFBs not to provide any banking services to proscribed/ designated entities and persons or their associated persons as required under the Anti Money Laundering and Combating the Financing of Terrorism Regulations.
Ministry of Foreign Affairs has issued UNSC (Freezing and Seizure) Order, 2019 to streamline the procedure for implementation of Security Council Sanctions against designated individuals and entities.
In light of provisions of the United Nations Security Council (Freezing & Seizure) Order, 2019, banks/ DFIs/ MFBs are required to issue a notice of freezing or seizure of the property to the concerned designated entity/individual and any other person affected by the freezing or seizure of the property, as set out in the United Nations Security Council (Freezing and Seizure) Order, 2019.
Consequently, in accordance with the Guidelines issued by the Ministry of Foreign Affairs and National Counter Terrorism Authority (NACTA) under relevant UNSC resolutions, SBP has also updated the subject guidelines for compliance by all banks/ DFIs/ MFBs.
The Government of Pakistan under the United Nations (Security Council) Act, 1948 gives effect to the decisions of UNSC whenever the Consolidated List maintained by the relevant Sanctions Committee is updated.
The Ministry of Foreign Affairs issues Statutory Regulatory Orders (SROs) to provide legal cover for implementing sanction measures under Security Council Resolutions. These SROs in respect of designated1 individuals/ entities require assets freeze, travel ban and arms embargo in addition to other measures in accordance with the Security Council Resolutions.
State Bank also circulates these SROs/notifications to its regulated entities for taking necessary action. These SROs/notifications, in addition to other requirements, require banks/ DFIs/ MFBs to ensure freezing of assets as per requirements of UNSCR.
As per guidelines banks/ DFIs/ MFBs will also ensure compliance of sanctions regimes with regards to their vendors, employees (permanent, contractual or hired through outsourcing), Board of Directors/ members, sponsors/ shareholders etc.
Banks/DFIs/MFBs will deploy adequate systems for real time screening and allocate sufficient/trained resources to ensure meticulous compliance of the subject sanctions regimes.
Further, the Government of Pakistan has already prescribed penalty up to Rs 10 million for non-compliance of sanctions regime under the UN (Security Council) Act, 1948 and the Anti-Terrorism Act, 1997.
The relevant UNSC resolutions permit deposits (credits) in frozen accounts without changing status of the accounts. For further information banks/DFIs/MFBs may access relevant information /documents from the UNSC website.
No charges will be deducted from such frozen accounts and no such account should be treated as unclaimed deposit for surrendering to SBP. Banks/DFIs/MFBs may seek guidance from Government of Pakistan through SBP regarding any queries on the subject including necessary withdrawals from frozen accounts.
Banks/DFIs/MFBs may educate their customers that in case of any wrongful or inadvertent freezing, they may apply in writing for de-listing to Government of Pakistan through relevant Ministry or to the UN's Ombudsperson, as the case may be.
SBP also advises its regulated entities to report details of such frozen assets and other action taken in compliance with the relevant SRO/notification to SBP within the stipulated time.
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