Government Asks Property Deals Details to Fulfill FATF Criteria

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In seven days, all tax-filing estate developers need to submit an online four-page questionnaire.

Islamabad: According to a news source, to meet Financial Action Task Force (FATF) requirement, the government has registered tax-filing real estate dealers as Designated Non-Financial Business and Professions (DNFBPs). It also directed them to provide details of their clients and property transactions.

More than 20,000 tax-filers DNFBPs have to submit a four-page questionnaire that contains 86 questions online in seven days. “In case of non-compliance or partial compliance, action as per law will be initiated,” said in the notice sent to real estate dealers and developers.

Under SRO 924, as per FATF requirements to meet the anti-money laundering and counter-financing of terrorism (AML/CFT), the Federal Bureau of Revenue (FBR) has designated many entities as DNFBPs. The dealers are now required to provide the details of the domestic and foreign clients and high net worth individuals.

Moreover, it is also necessary for them to reveal the nature of interaction with the clients if face to face. Similarly, they need to explain the mode of payments and transactions which are made for the property to ensure risk mitigation controls. Farther, they have to fulfill FBR and AML regulations.

The brokers have also been asked to provide details of the clients related to “high-risk countries or areas of concern or the border areas of Khyber Pakhtunkhwa, Baluchistan, and South Punjab” as to “what was the value of those transactions” in rupees. Further, they are also required to provide suspicious transactions reports (STRs) and currency transactions reports (CTRs) to the Financial Monitoring Unit (FMU) regarding rejected clients due to high-risk factor.

Also, FBR is responsible for ensuring real estate dealer comply with AML/CFT obligations under the Anti-money Laundering Act (AMLA).

Similarly, AMLA-required obligations also apply to DNFBPs including lawyers and legal professionals when they provide legal assistance to the clients regarding real estate and property matters.

According to Ahsan Malik, the convener of the Federation of Pakistan Chamber of Commerce and Industry’s (FPCCI), due to difficulties and limited education, the majority is unable to understand the questionnaire. He further said “we are property dealers not spies or investigators of technical calibre. If we ask these formalities to the clients, they will move away to the other millions of dealers working in the country.”

Mr Malik proposed a practical solution to fulfil FATF demands to register the brokers with land transferring agencies like CDA, LDA, KDA, DHA, etc. He further said that due diligence will discourage investment in the construction sector under the prime minister’s amnesty scheme.

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News source: https://epaper.dawn.com/DetailNews.php?StoryText=25_03_2021_001_002

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