Regulatory Alerts2020-09-02 | Circular No.9Red Flag Indicators for Misuse of Legal Arrangements and NPOs
Reporting entities must submit Suspicious Transaction Reports to the Financial Monitoring Unit to comply with the Anti-Money Laundering Act, 2010. The FMU provides specific red flag indicators to assist entities in identifying potential money laundering or terrorism financing associated with legal arrangements and non-profit organizations. While individual indicators are not definitive, a combination of these flags analyzed alongside overall financial activity and client profiles may signify illicit activity.
FINANCIAL MONITORING UNIT (FMU) GOVERNMENT OF PAKISTAN 2ND FLOOR, SBP MAIN BUILDING, I.I. CHUNDRIGAR ROAD, KARACHI 4400
FMU-Circular No. 09 of 2020 September 02, 2020
All Reporting Entities
Dear All,
Red Flags Indicators for Misuse of Legal Persons
In terms of Section 7 (1) of Anti-Money Laundering Act, 2010, the reporting entities are required to promptly report Suspicious Transactions Reports (STRs) to Financial Monitoring Unit for potential Money Laundering (ML) / Terrorism Financing (TF) related activities.
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In order to identify a suspicion that could be indicative of Money Laundering (ML) or Terrorism Financing (TF), FMU has prepared the red flags indicators that are specially intended as an aid for the reporting entities, which are attached as “Red Flags Indicators for Misuse of Legal Arrangements and NPOs”.
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These red flags may appear suspicious on their own; however, it may be considered that a single red flag would not be a clear indicator of potential ML / TF activity. However, a combination of these red flags, in addition to analysis of overall financial activity and client profile may indicate a potential ML / TF activity.
Encl: Red Flags Indicators for Misuse of Legal Arrangements and NPOs
Yours truly, Sd/- (Sumera Baloch) Additional Director
Copy to: The Governor, State Bank of Pakistan The Chairman, Securities and Exchange Commission of Pakistan