State Bank of Pakistan calls on banks to focus on TBML

State Bank of Pakistan (SBP) has called on all of the country’s major banks to improve their capacity to control money laundering, and to particularly participate in multi-agency efforts to curb trade-based money laundering (TBML).

Senior SBP officials made the call during a meeting earlier this month with the heads of all the country’s major banks.

AML amendment

In 2016, Pakistan passed a long-awaited amendment to its anti-money laundering (AML) laws, but very little has happened in terms of implementing the amended legislation.

While conceding that much of Pakistan’s money laundering takes place through informal money channels such as hawala or hundi, according to SBP officials the formal banking sector needs to focus on TBML.

The SBP governor recognised during the meeting with bankers that TBML can be most effectively curbed by Pakistan’s Customs. But banks need to enhance their capacity in this area too, and work alongside customs officials to counter this type of money laundering, according to Ashraf Mahmood Wathra.

Capacity and training

The governor advised bankers at the meeting to increase their AML capacity and ensure bank officials are adequately trained to identify potential TBML operations.

Existing mechanisms, including conducting due diligence and reporting suspicious operations to the Financial Monitoring Unit, need to be strengthened according to the SBP governor.

Categories: Trade Based Financial crimes News

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