Business
Pakistan: New unit at State Bank to curb money laundering and terrorist funding
Karachi, 11 July (AKI/DAWN) - Pakistan's State Bank has introduced new checks on money transactions which may be used to monitor the funding of mosques and seminaries across the country. The bank said it had decided to establish a Financial Monitoring Unit (FMU) to curb money laundering and terrorist financing.
The move is considered significant as it came while the military operation against militants holed up in Lal Masjid and Jamia Hafsa was at its peak and showed the government’s concern over the flow of funds to seminaries.
After the 9/11 attacks in the United States, a large number of accounts belonging to banned organisations were frozen by the State Bank of Pakistan which also helped law-enforcement agencies to locate the sources of funding.
Senior bankers said that people who provided funds to the Lal Masjid and other mosques and madrassas or Islamic seminaries through cheques could be traced.
“An incident like Lal Masjid could put the donors into a difficult situation,” said a senior banker. The head of Lal Masjid, Maulana Abdul Aziz, has already disclosed names of some people who have been providing funds to his madrassas.
“The FMU will be headed by a director and would receive, analyse and disseminate suspicious transactions reported by banks or DFIs (Development Finance Institution). The FMU after analysis would pass on suspicious transactions to the relevant law-enforcement agencies as and when required,” said a State Bank of Pakistan circular issued on Tuesday.
All banks and DFIs have been advised to report suspicious transactions to the director of the FMU.
“Failure to report suspicious transactions or any violation of the instructions will attract punitive action,” the State Bank of Pakistan warned.
The FMU will maintain a database of suspicious transactions and establish and maintain working relationship with domestic law-enforcement agencies, supervisory and regulatory bodies and reporting entities.
It will also assist the reporting entities and law-enforcement agencies in formulating training programmes and developing strategies to combat money laundering and terrorist financing.
“The scope of FMU will be further enhanced once the legislation on anti-money laundering is passed,” said the circular by the State Bank.
The move is considered significant as it came while the military operation against militants holed up in Lal Masjid and Jamia Hafsa was at its peak and showed the government’s concern over the flow of funds to seminaries.
After the 9/11 attacks in the United States, a large number of accounts belonging to banned organisations were frozen by the State Bank of Pakistan which also helped law-enforcement agencies to locate the sources of funding.
Senior bankers said that people who provided funds to the Lal Masjid and other mosques and madrassas or Islamic seminaries through cheques could be traced.
“An incident like Lal Masjid could put the donors into a difficult situation,” said a senior banker. The head of Lal Masjid, Maulana Abdul Aziz, has already disclosed names of some people who have been providing funds to his madrassas.
“The FMU will be headed by a director and would receive, analyse and disseminate suspicious transactions reported by banks or DFIs (Development Finance Institution). The FMU after analysis would pass on suspicious transactions to the relevant law-enforcement agencies as and when required,” said a State Bank of Pakistan circular issued on Tuesday.
All banks and DFIs have been advised to report suspicious transactions to the director of the FMU.
“Failure to report suspicious transactions or any violation of the instructions will attract punitive action,” the State Bank of Pakistan warned.
The FMU will maintain a database of suspicious transactions and establish and maintain working relationship with domestic law-enforcement agencies, supervisory and regulatory bodies and reporting entities.
It will also assist the reporting entities and law-enforcement agencies in formulating training programmes and developing strategies to combat money laundering and terrorist financing.
“The scope of FMU will be further enhanced once the legislation on anti-money laundering is passed,” said the circular by the State Bank.
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