Pakistan to take measures against black money in real estate

ISLAMABAD – Pakistan, to comply with conditions put forth by the Asia Pacific Group (APG) – a regional affiliate of the Financial Action Task Force (FATF) – as the state is soon to employ measures against black money in the real estate sector.

It has been reported that an authority will be established with the support of federal institutions. The authority rumoured to be called “Real Estate Regulatory Authority,” will focus on ensuring that no transfers of either land or properties are made in the name of any terrorist or banned outfit.

The authority will require a mandatory registration from businessmen involved in the sector and essential documentation of the businesses.

The Security and Exchange Commission of Pakistan (SECP) has already prepared an initial draft for the establishment of the regulatory body in accordance with FATF standards. The technical and law division of the SECP is working jointly to finalise the basic framework. The authority will regulate various matters of the sector but taxation so far has been excluded from the scope of the authority.

With the significant improvements made by the incumbent government to counter money laundering and terror financing, Pakistan aims to comply with 40 recommendations of the APG to remove itself from the FATF’s grey list.

The news of the potential development comes a week ahead of FATF’s review meeting in Paris (Oct 13-18) to determine the status of Pakistan. Pakistan was downgraded to “Enhanced Follow-up” category over the inability to meet international financial status by October 2018 adopted in the 3rd Mutual Evaluation Report (MER) on Pakistan in the 41-member APG meetings in Canberra, Australia.

As a consequence, Pakistan faces increased scrutiny and has been required to submit quarterly progress reports, instead of biannual, to the APG to show improvements in its technical standards on Anti-Money Laundering and Countering Financing of Terrorism starting February 1, 2020.

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