MAINTENANCE OF RECORD OF TRANSACTIONS CONDUCTED THROUGH FOREIGN CURRENCY ACCOUNTS
EPD Circular Letter No. 03 of 2016 February 23, 2016
The Presidents/Chief Executives of all
Authorized Dealers in Foreign Exchange
Dear Sirs / Madam,
Maintenance of Record of Transactions Conducted Through Foreign Currency Accounts
With the view to preserve the integrity, soundness and safety of the financial system, State Bank of Pakistan (SBP) has been endeavoring to prevent the possible use of the banking sector for money laundering, terrorist financing and illegal transfer of funds. To this end, SBP has been issuing various instructions/guidelines to the banks from time to time.
2. It may be noted that in pursuance of sub-section (7) of section 7 of the Anti-Money Laundering Act, 2010 (as amended in 2015), reporting entities including Authorized Dealers are under obligation to conduct Customer Due Diligence (CDD) and maintain record of transactions, account files and documents obtained through such diligence in accordance with the regulations issued by the SBP. In this regard, it is reiterated that Authorized Dealers must ensure strict observance of all applicable instructions including Regulations/Guidelines issued by SBP regarding KYC/CDD while opening and maintaining foreign currency accounts.
3. Further, ongoing CDD is an essential part of an effective Anti Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regime and applies to all customers to whom the Authorized Dealers are offering any type of service(s). This includes monitoring and scrutiny of transactions undertaken throughout the course of business relationship between the bank and the customer to ensure that the transactions being conducted are consistent with the institution’s knowledge of the customer, purpose of account, business and risk profile, and the source of funds.
4. Accordingly, Authorized Dealers are advised to ensure that consolidated data/record of transactions routed through foreign currency accounts of individuals/entities is maintained by them at their head offices on monthly basis, in addition to the data/record already being maintained, in the following manner: Data of those personal foreign currency accounts maintained by individuals where aggregate amount exceeding US$ 10,000 or its equivalent in other foreign currencies is deposited in, withdrawn from or remitted out from the account during the month as per the attached format(Annex. I). Data of foreign currency accounts maintained by entities where aggregate amount exceeding US$ 25,000 or its equivalent in other foreign currencies is deposited in, withdrawn from or remitted out from the account during the month as per attached format (Annex. II).
5. The above data/record shall be maintained by the Authorized Dealers and produced for on-site inspection/off-site monitoring by the SBP as and when required.