RegAlert2020-08-17 | Circular No.8Added · Updated
Red Flag Indicators for Misuse of Legal Persons
The Financial Monitoring Unit mandates that all reporting entities promptly submit Suspicious Transactions Reports (STRs) under Section 7(1) of the Anti-Money Laundering Act, 2010. While individual indicators of potential money laundering or terrorism financing may appear suspicious, reporting entities should evaluate combinations of these red flags alongside the client's overall financial profile. This guidance serves as an analytical aid to assist institutions in identifying and reporting illicit activities involving legal persons.
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FINANCIAL MONITORING UNIT (FMU) GOVERNMENT OF PAKISTAN 2ND FLOOR, SBP MAIN BUILDING, I.I. CHUNDRIGAR ROAD, KARACHI 4400
FMU-Circular No. 08 of 2020 August 17, 2020
All Reporting Entities
Dear Sirs/Madams,
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 Persons”.
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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 Persons
Yours truly,
Sd/-
(Sumera Baloch)
Additional Director
Copy to:
The Governor, State Bank of Pakistan
The Chairman, Securities and Exchange Commission of Pakistan
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