Regulatory Alerts2020-07-23 | Circular No.4Accountants Red Flags
The Financial Monitoring Unit mandates that accountants, as designated non-financial business professionals, must promptly report suspicious transactions related to money laundering or terrorism financing under the Anti-Money Laundering Act, 2010. FMU has issued specific red flag indicators to assist these professionals in identifying potentially illicit activities. Practitioners should not rely on single indicators but must evaluate combinations of red flags alongside comprehensive client profiles and financial activity analysis to determine if suspicious activity exists.
FINANCIAL MONITORING UNIT (FMU) GOVERNMENT OF PAKISTAN 2ND FLOOR, SBP MAIN BUILDING, I.I. CHUNDRIGAR ROAD, KARACHI 4400 FMU-Circular No. 04 of 2020 July 23, 2020 DNFBPs (Accountants) Dear Sirs/Madams, Red Flags Indicators for Accountants 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. The reporting entities also includes Designated non-Financial Business Professions (Accountants) as per Section 2 (u) read with Section 2 (m) of AML Act 2010. 2. 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 Accountants, which are attached as “Red Flags Indicators for Accountants”. 3. 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 Accountants Yours truly, Sd/- (Sumera Baloch) Additional Director Distributed to: The Chairman, Federal Board of Revenue (FBR) The Chairman, Securities and Exchange Commission of Pakistan (SECP) The President, Institute of Chartered Accountants of Pakistan (ICAP) The President, Institute of Cost and Management Accountants of Pakistan (ICMAP)