CDNS, NSCs and Pakistan Post told: Customers' risk profiling a must under AMLA

The Finance Division has made it mandatory for the officers of Central Directorate of National Savings, National Savings Centers and Pakistan Post to carry out business and risk profiling of their customers/accountholders, identify beneficial owners and comply with the provisions of the AML Act for reporting of STRs and CTRs in the context of money laundering and financing of terrorism.

The Finance Division has issued National Savings Schemes (AML and CFT) Rules, 2019 on Thursday. According to the SRO, draft National Savings Schemes (AML and CFT) Rules, 2019, which the federal government proposes to make in exercise of the powers conferred under section 28 of the Public Debt Act, 1944 (XVIII of 1944), are hereby published for information of all persons likely to be affected thereby and, as required by sub-section (1) of section 28 of the said Act. A notice is hereby given that objections or suggestions thereon, if any, may for consideration of the federal government be sent within seven days of publication of this notification. Any objections or suggestions received from any person in respect of the draft rules before expiry of the aforesaid period shall be considered by the federal government, namely:-

Short title, extent and commencement: These rules shall be called the National Savings Schemes (AML and CFT) Rules, 2019. These rules shall come into force at once. These rules shall apply to all offices and persons responsible for the issuance, management, marketing, registration, replacement, sale and discharge of the instruments issued by and the accounts opened at and maintained with the National Savings Centers, Pakistan Post and any other office designated as offices of issue.

In these rules, unless there is anything repugnant in the subject or context, (a) "account" means any type of account of the depositor, opened and maintained with any office of issue; (b) "AML Act" means the Anti-money Laundering Act, 2010 (VII of 2010); (c) "beneficial owner" means the natural person who ultimately owns or controls a customer or the person on whose behalf a transaction is being conducted and includes legal heirs and the person who exercises ultimate effective control over a person; (d) "Board" means the National Savings AML/CFT Supervisory Board to oversee implementation of these rules; (e) "controlling office" means head office of the National Savings, State Bank of Pakistan Banking Services Corporation (SBP(BSC), Pakistan Post Office Department (PPOD) or head office of any office of issue ; (f) "CTR" shall have the same meaning as assigned thereto in the AML Act; (g) "customer" means a person having business relationship with the office of issue by holding an account or instrument; (h) "customer due diligence" or "CDD" means.- (i) identifying the customer and verifying the customer's identity on the basis of documents, data or information obtained from customer or from reliable and independent sources; (ii) identifying, where there is a beneficial owner who is not the customer, the beneficial owner and taking adequate measures, to verify his identity so that the office of issue is satisfied that it knows who the beneficial owner is, including, in the case of a legal person, trust or similar legal arrangement, measures to understand the ownership and control structure of the person, trust or arrangement; (iii) understanding and, as appropriate, obtaining information on the purpose and intended nature of the business relationship; and (iv) monitoring of accounts and transactions on ongoing basis to ensure that the transactions being conducted are consistent with the office of issue's knowledge of the customer, their business and risk profile, including, where necessary, the source of funds and, updating records and data and information to take prompt action when there is material departure from usual and expected activity through regular matching with information already available with the office of issue. (i) "Enhanced due diligence" or "EDD" means diligence in addition to CDD and may be carried out in case of existing customers or intending customers generating suspicion for the office of issue; (j) "FATF recommendations" means the applicable recommendations of Financial Action Task Force for combating money laundering and terror financing ; (k) "FMU" shall have the same meaning as assigned thereto in the AML Act; (l) "government institutions" means institutions of Federal and provincial governments and include a ministry within such a government, a local government or an agency specially established by any such government or a department, organization or corporation owned or controlled by such government under a Federal, provincial or local law; (m) "instruments" means the National Savings Schemes and financial instruments of various kinds that includes savings certificates and bonds issued, accounts opened and any other instruments of investment issued under the Public Debt Act, 1944 (XVIII of 1944) and rules thereunder; (n) "legal person" means body of persons or an entity as a corporation, non-profit organization (NPO), non-governmental organization (NGO), trust, charity, society, association, club, etc., established under any law and considered as 4 having many of the rights and responsibilities of a natural person and especially the capacity to sue and be sued; (o) "National Savings" or "CDNS" means the Central Directorate of National Savings, being an attached department of the Ministry of Finance, Government of Pakistan; (p) "National Savings Centre" means a branch, outlet or office of the CDNS; (q) "office of issue" means National Savings Centers or any other office associated with issuance, management, marketing, registration, replacement, sale and discharge of the instruments; (r) "person" includes an individual, association, authority, company, firm, institutions, partnership, society, trust or other entities; (s) "politically exposed person" or "PEP" means any person entrusted with a prominent public function by the state of Pakistan, a foreign country or an international organization and includes heads of state or government and members and senior officials of legislature, judiciary, executive, military and regulatory authorities and senior executives of corporations, departments or bodies that are owned or controlled by the state; (t) "risk" refers to risk associated with money laundering and financing of terrorism; (u) "senior management" means the officers of the controlling office as designated by the Board for the purpose of these rules; (v) "suspicious transaction report" shall have the same meaning as assigned thereto in the AML Act; (w) "third party" means a commercial bank regulated by the State Bank of Pakistan and engaged by CDNS under a third party arrangement to perform Know Your Client (KYC) or CDD or EDD on behalf of the office of issue; and (x) "UNSCR" means the United Nations Security Council Resolution. The words and expressions used but not defined herein shall have the meanings as assigned thereto in the Public Debt Act, 1944 (XVIII of 1944) and the AML Act, 2010 (VII of 2010).