Joint efforts against money laundering, terror funding stressed

Speakers at the financial crime summit Saturday called for joint efforts and close coordination among stakeholders to deal with money laundering and terror financing issues.

Dellsons Associates in collaboration with A F Ferguson & Co (a member firm of PwC Network), organized the 2nd Financial Crime Summit "Pakistan's FATF Way Forward: Transforming the National Financial Crime Landscape." Stat Bank of Pakistan (SBP) Governor Dr Reza Baqir was the key speaker. Deputy Governor SBP Jameel Ahmad, Syed Irfan Ali Executive Director Banking Policy and Regulations Group SBP, representative from Securities & Exchange Commission of Pakistan (SECP), presidents of various banks, representatives of exchange companies, asset management companies and other regulatory bodies also attended the summit.

Talking to journalists, Deputy Governor SBP Jameel Ahmed said the SBP has taken major steps towards dealing with trade-based money laundering and still making concrete efforts to get out of the Financial Action Task Force (FATF) grey list.

He said Pakistan's banking sector is stable and working on dealing with trade-based terrorist financing issues.

He said as the country's economy is gradually improving, the SBP is taking steps for ease of doing business. The SBP has allowed 50 percent advance payment against imports by the manufacturing sector. Previously some restrictions were imposed at this end due to exchange rate volatility, he added. Syed Irfan Ali, Executive Director, Banking Policy and Regulations Group SBP said that money laundering is a global issue and Pakistan is no exception.

However, he said the SBP is making serious and well-planned efforts to meet the FATF action plan.

He urged the financial institutions to develop close coordination and added that banks and financial institutions should compete on products and not information. In order to curb the trade-based terror funding, the SBP is working on data sharing with customs and details will be shared with banks once it is completed, he maintained.

Irfan said it is good to see that banks and financial institutions are working in tandem on the SBP guidelines. This will help mitigate risks to banking sector, he said and added that no financial crime can be addressed without support of law enforcement agencies, therefore a close collaboration among all stakeholders is needed to tackle these challenges.

Banks and financial institutes can reduce the risk of trade-based terror financing by adopting new technologies and techniques. Banks should strengthen the 'Know Your Customer (KYC) and Customer Due Diligence (CDD)' initiatives. He said the SBP will address all the issues highlighted in the summit. "Terror financing is also a geographical issue. We have Afghanistan, from where people come to Pakistan daily without visa," he maintained.

Pakistan has made tremendous progress on FATF. The SBP has asked all banks to set up desk for dealing with trade-related terror financing. Banks and financial institutions should ensure that their institutions must not be part of terror financing.

He said financial inclusion is the primary objective of the SBP to bring more people into the system but not at the cost of violating the rules.

A panel discussion "Realizing the Immensity of Threat and Insulating the Values," with presidents & CEOs of banks was also held.

Tahir Hassan Qureshi, President & CEO, Allied Bank Limited (ABL) said lack of understanding is a major issue, which needs to be addressed. He said Allied Bank has heavily invested in information technology and human resource to comply with the SBP directives.

He said all stakeholders including SBP, Nadra and SECP should work together to address real issues.

Mohsin Nathani, President & CEO, Habib Metropolitan Bank said some small foreign banks have refused to work with Pakistan due to FATF issue.

Arif Usmani, President, National Bank of Pakistan said trade-based terror financing is very difficult to address, but can be handled with joint efforts.

Khalida Habib, Executive Director, Securities & Exchange Commission of Pakistan (SECP) discussed the 'Rising to the FATF Challenges' and said that now the companies are required to submit director's fresh information. In addition, the SECP is making amendments to get more information from companies.

Syed Amir Ali, President & CEO, BankIslami Pakistan Limited said that BankIslami has announced incentives for KYC and CDD staff to enhance their productivity.

A panel discussion of CEOs of Non-Banking Financial Institutions was organized on "Addressing the Expectations: Moving Mountains at the Crossroads," in which participants discussed realizing the severity of challenge as the foundational step-insights into the key FATF/Asia Pacific Group concerns. A panel discussion was also held with business & operations heads on 'Making the 1st Line of Defense the Transformation Leaders.