Experience Requirements

EXCELLENT CAREER OPPORTUNITIES
Financial Monitoring Unit (FMU), an autonomous body of the Federal Government, needs to fill up the following posts through the Institute of Bankers Pakistan (IBP):
http://www.fmu.gov.pk/career.html

Assistant Director (FMU-2) 6 Punjab = 3 Sindh(U) = 1 Sindh(R) = 1 Balochistan=1
Academic Qualification:
Post graduate degree or equivalent in Business Administration / Public Administration / Finance / Accounting / Commerce / Economics or related field with at least Second Division from a local or foreign university or institution recognized by HEC. Age: 25-35 years
Experience: Functional & applied experience of 2 years preferably in the financial sector, accounting or legal area.

PS to DG (FMU-2)
1 Sindh(U) = 1
Academic Qualification: Second Division Bachelor degree recognized by HEC with a Secretary course, Good command in shorthand, typing at least 40 words per minute. Age: 23-35 years
Experience: At least 2 years of relevant experience.

Junior Officer (FMU-1)
1 Sindh(R ) = 1
Academic Qualification:
Bachelor degree in Business Administration / Public Administration / Finance / Accounting / Commerce / Economics or related field with at least Second Class from a local or foreign university or institution recognized by HEC.
Age: 22-35 years
Experience:
Preferably 2 years
Further details with responsibilities of each post can be seen at FMU
website
www.fmu.gov.pk

and IBP website www.ibp.org.pk.
Interested candidates meeting the above criteria are advised to visit the IBP website and apply directly to IBP as per prescribed procedure within 15 days from the date of publication of this advertisement. The candidates qualifying IBP test will have to subsequently apply for respective positions at FMU.
The candidates currently working in Federal / Provincial / Semi-Government / Autonomous bodies should send their applications through proper channel.
Candidates will be given age relaxation as per GoP Policy.
No TA/DA shall be admissible.
Director General Financial Monitoring Unit (FMU), Government of Pakistan 2 nd Floor, SBP Main Building, I.I. Chundrigar Road, Karachi. Ph: 021-99221508
Misinformation and any attempt to influence the selection process will be considered a definite disqualification, even if the candidate is otherwise qualified.
Details of Posts/ Job Description and Criteria :
Financial Monitoring Unit (FMU) EXCELLENT CAREER OPPORTUNITIES Financial Monitoring Unit (FMU), an autonomous body of the Federal Government, requires the services of qualified, motivated and self-starter personnel to strengthen its human resource base. Currently, applications are invited for the following Karachi based positions from the candidates who possess the necessary exposure and skills in the stated areas:
1. Assistant Director (FMU-2):
06 Positions
The incumbent will be responsible to:
Analyze Suspicious Transaction Reports (STRs), Currency Transaction Reports (CTRs) and other financial intelligence data received from financial institutions and other reporting entities. Assist in formulation of Policies, Strategies, Rules, Regulations, Guidelines, etc. in the light of international standards and best international practices. Assist in coordination with various reporting entities, law enforcement agencies, regulatory bodies, Government departments, national / international stakeholders, etc.
Assist in review of the AML/CFT related laws, rules, regulations, notifications, etc.
Assist in formulation of FMU’s Business Development Plan, HR Policies & related issues. Prepare and coordinate for responses on Internal Audit and Government Audit queries. Eligibility Criteria Academic Qualification: Post graduate degree or equivalent in Business Administration / Public Administration / Finance / Accounting / Commerce / Economics or related field with at least Second Division from a local or foreign university or institution recognized by HEC.
Experience:
Functional & applied experience of 2 years preferably in the financial sector, accounting or legal area.
Age: 25-35 years.
Domicile:
Punjab = 3, Sindh (Urban) = 1, Sindh (Rural) = 1, Baluchistan = 1
Salary: Salary in the scale of FMU-2 (41,360-3,456-103,560).
2. Personal Secretary to Director General (FMU-2):
01 Position
The incumbent will be responsible to: Provide secretarial services to Director General-FMU. Receive cases for approval, and timely delivery of the cases to respective divisions. Sort, maintain and compile incoming mail/documents and timely putting up the same to supervisor. Attend and place calls, and proper recording and delivery of messages.
Maintain DG’s office record and ensure confidentiality.
Perform any other work that may be assigned by the DG
Eligibility Criteria
Academic Qualification:
Second Division Bachelor degree recognized by HEC with a Secretarial course, Good command in shorthand, typing at least 40 words per minute.
Experience: At least 2 years of relevant experience.
Age: 23-35 years.
Domicile: Sindh (Urban) = 1
Salary: Salary in the scale of FMU-2 (41,360-3,456-103,560).

3. Junior Officer (FMU-1):
01 Position The incumbent will be responsible to assist in the Analysis of STR / CTR, record keeping and information gathering from reporting entities.
Eligibility Criteria
Academic Qualification:
Bachelor degree in Business Administration / Public Administration / Finance / Accounting / Commerce / Economics or related field with at least Second Class from a local or foreign university or institution recognized by HEC. Experience: Preferably 2 years Age: 22-35 years. Domicile: Sindh (Rural) = 1 Salary: Salary in the scale of FMU-1 (25,820-2,070-87,920). Application Procedure Written Test The candidates meeting the above eligibility criteria are required to register themselves with the Institute of Bankers Pakistan (IBP) for appearing in the written test. Registration with IBP Interested eligible candidates shall register themselves with Testing Service Provider as per following procedure:-
Application form and deposit slip is available at IBP website www.ibp.org.pk
Take printout of the form along with Fee Deposit Slip.
Deposit test fee of Rs. 300/- (Rupees Three Hundred Only) through deposit slip at any online branch of Habib Bank Limited or Allied Bank Limited.
Send application form along with original copy of deposit slip, CNIC, Domicile Certificate and 3 passport size photographs to the Director Examinations,
The Institute of Bankers Pakistan Moulvi Tamizuddin Khan (M. T. Khan) Road, Karachi – 74200, Pakistan not later than 28th January, 2019.
Institute of Bankers Pakistan or Financial Monitoring Unit will not be responsible for late receipt of applications sent through post.
Applications submitted in person will not be entertained. Applications sent directly to FMU in contravention of the prescribed procedure will not be entertained.
IBP will upload the result at its website as well as send the marks sheets to the candidates after announcement of result. Selection Procedure .
The candidates who qualify the written test conducted by IBP shall be eligible to subsequently apply for the respective post at FMU.
The candidates short listed on the basis of merit of written test and available number of vacancies will be invited for further evaluation including Interview before a Selection Committee.
Successful candidates will be selected in order of merit subject to the observance of quota as prescribed by the Government of Pakistan.
Post Test Application Procedure After announcement of written test result by IBP, the eligible candidates who qualify IBP test may apply for the respective position at FMU.
The application form will be available at the FMU’s website www.fmu.gov.pk or can be obtained from FMU’s offices. Duly filled in application form along with result sheet issued by IBP, attested copies of all educational documents, experience certificates, CNIC, domicile and 3 passport size photographs MUST reach the following address latest by 15th March, 2019.
Applicants must indicate in their CVs the place of Domicile and whether they have a criminal record, were found guilty of misconduct or have pending criminal or misconduct charges.
The applicants may be subjected to security clearance. Please clearly mark envelop for the “Position applied for”. Only short listed candidates will be contacted.
No TA/DA shall be admissible for appearing in the Test/Interview.
All appointments shall be made in compliance with prescribed regional/provincial quota requirements.
Relaxation in age is admissible in accordance with the policy announced by the Federal Government.
The candidates who are currently employed with Federal / Provincial / Semi-Government /Autonomous Bodies should send their applications through proper channel.
Director General Financial Monitoring Unit (FMU), Government of Pakistan 2nd Floor, SBP Main Building, I.I. Chundrigar Road, Karachi. Ph: 021-99221508
Misinformation and any attempt to influence the selection process will be considered a definite disqualification, even if the candidate is otherwise qualified.

Company Profile and Details :
The Financial Monitoring Unit (FMU) was established under section 6 of the Anti Money Laundering Ordinance-2007 in October 2007. It is the central agency in Pakistan responsible for receiving, analyzing and disseminating to the investigatory and supervisory authorities, disclosures of financial information concerning suspected proceeds of crime and alleged money laundering offences and the financing of any activities or transactions related to terrorism. As such, it plays a decisive role in the detection and investigation of financial crimes.
In furtherance of its role, FMU collects, processes, analyses and interprets all information disclosed to it and obtained by it under the relevant enactments; issues guidelines to Financial Institutions/ non-financial businesses and professions (NFBP) on the manner in which suspicious transactions shall be reported and additional information supplied to the FMU. Additionally, FMU informs, advises and co-operates with investigating agencies, supervisory authorities and other law enforcement agencies and exchanges information domestically and internationally.
In the medium term, FMU plans to review and consolidate its capacity toward improving
its operational efficiency in respect of data storage, retrieval of data and analytical expertise. Special attention will also be given to training and retention of staff who have acquired specialilsed skills and work culture of an FIU. Furthermore, while the desired confidence level exists among FMU and the reporting institutions, focused initiatives shall be undertaken to strengthen the partnership through specialized seminars and other training programs.
The long-run strategy of the FMU will flow out of National AML/CFT strategy and the extent of successful acquisition and integration of expertise, capacity resources and the requirements and expectations of the stakeholders. Essentially, the strategy will look towards enhancement of FMU’s preventive role through the preparation of strategic reports, effective use of the FMU’s website and database for deterrence and better national AML/CFT awareness. Additionally, FMU will continue to play a lead role in regional and international AML/CFT initiatives.
In a nutshell, a successful strategy for the FMU aims at increasing the quality and numbers of essentials input, i.e. STRs, information on cash movements and large transactions and other developments that help to detect and analyze financial crimes; building the necessary human and IT capabilities for its operations and responding effectively to the demand for its output i.e. substantive leads as well as meeting other requests for support from domestic law enforcement agencies, regulators and overseas FIUs.
However, developing responses in the context of specific AML/CFT stakeholders within the agreed national strategy cannot ignore that prevention of money laundering and terrorist financing is an endless exercise. Techniques are fast evolving, reflecting the innovative and sophisticated approaches of the perpetuators of financial crimes who always tend to remain one step ahead using latest techniques and exploration of legal ambiguities and advances in financial technology. FMU is keenly aware of needed alertness to the new risks as a crucial factor in national AML/CFT strategy building.
Laws
Anti Money Laundering Act, 2010 - As amended upto May2016
Anti Money Laundering (Amendment) Act, 2015
The Anti-Terrorism Act, 1997 - Amended upto June 2014
Extention of Anti Money Laundering Act 2010 to Gilgit-Baltistan
Amendment in Foreign Exchange Regulation Act-1947
National Accountability Ordinance
Control of Narcotic Substances Act
Federal Investigation Agency - ACT
Pakistan Penal Code
Foreign Exchange Regulations - ACT
Banking Companies Ordinance-1962
The Securities Act, 2015
Companies Ordinance 2016
Companies Ordinance 1984 (amended)
Code of criminal procedure 1898
Customs Act 1969
Extradition Act-1972
Arms Act 1878 XI OF 1878
Pakistan Arms Ordinance 1965
Copyright Ordinance 1962 update
Emigration Ordinance 1979
Registered Designs Ordinance2000
Trade Marks-Ordinance 2001
Prevention and Control of Human Trafficking Ordinance 2002
Regulations & Guidelines
1. Amendments to SECP AML/CFT Regulations .
2. SECP AML/CFT Regulations .
3. AML/CFT Guidelines in EC Manual by SBP — .
4. Pakistan Post AML/CFT Regulations .
5. Guidelines on Compliance of UNSC Resolutions for Banks, DFIs and ECs
6. Guidelines for Real Estate Agents Associations with Charitable and Not for Profit Objects Regulations
7. APGMJA AML/CFT Guidelines
8. AML/CFT Regulations for Banks and DFIs —
9. AML/CFT Guidelines on RBA for Banks and DFIs —
10. AML/CFT Guide for Accountants —\
11. AML/CFT Guidelines in EC Manual by SBP —
12. AML Regulations —
13. AML Rules
14. NACTA GUIDELINES ON UNSCR 1373

Circulars and Notifications

Notification-Addition of Predicate Offences-Income Tax Ordinance, 2001
Notification:Addition of Predicate Offences-Insider Trading & Market Manipulation —
Notification:Addition of Predicate Offences-Sales Tax Act, 1990 Federal Excise, Act, 2005 —Notification: Addition of Predicate Offences —

Guidelines: Financial Institutions on Investment Incentive Scheme —
Notifications: S.R.O. No. 2(KE)/2011-DG I&I (FBR) as Investigating & Prosecuting Agency & S.R.O. No. 3(KE)/2011-Additional List of Predicate Offences
Notification: SBP - Currency Declaration Form

Reporting Forms
1. Currency Transaction Report (CTR) Format— 22 KB -
2. Suspicious Transaction Report (STR) Format— 25 KB -
3. Currency / Cash Transactions Guidance Notes— 96 KB -
4. Currency / Cash Transactions Reporting Form — 241 KB -
5. Suspicious Transactions Guidance Notes (Banking Sector)— 105 KB -
6. Suspicious Transactions Guidance Notes (Non Banking Sector)— 158 KB -
7. Suspicious Transactions Reporting Form— 321 KB -
8. Observations in CTRs Being Filed by Financial Institution— 36 KB
9. RED Flags for Insurance Sector— 128 KB -
10. RED Flags for Securities Sector— 124 KB -
11. RED Flags for Private Pension Schemes / Voluntary Pension Funds— 108 KB -
12. RED Flags for Exchange Companies— 209 KB -
Typologies
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Money Laundering from Corruption Offence
Case-I
During a bank’s ongoing review of an account holder, who declared himself as a landlord, was noticed to have received funds aggregating to PKR 8.6 Million in his account through online transfers in a month. Subsequently a sum of PKR 3.2 Million was withdrawn from the account without disclosing the purpose. Moreover, structured cash withdrawals were also observed in the account. On a query by the bank, the customer was reluctant to disclose the sources of funds credited in the account or to provide any documentary evidence to substantiate the credits/debits in the account.
During analysis, it was observed that the suspect had also previously served as a provincial legislator. The suspect’s account was credited with high value funds through online transfers. The funds were then withdrawn through cash and clearing. Average monthly turnover in the account was PKR 2.08 Million. During the period of 2.5 years PKR 56.22 Million was deposited in the account while PKR 54.88 Million was withdrawn. Most of the funds were transferred from the account of an individual maintaining account in a branch situated in an area adjacent to the suspect’s constituency.
Due to the high volume of funds credited in the personal account, it was suspected that he might be involved in abusing his authority as a legislator. Therefore, the financial intelligence was shared with LEA for investigation in the matter.
Case-II
ML by a Government Official laundered through an integrated scheme involving winning prize bonds, Term Deposit Receipts, Running Finance Facility, and Asset Acquisition. Person A, a Government Official, opened a savings account in XYZ Bank in 2015. Two high value transfers were made by the suspect from his own account maintained in PQR Bank, out of which, half of the amount was placed Term Deposit Receipts (TDRs). Later on, the suspect received prize money which was cleared via cheque and also placed in TDR. The prize money remained invested in TDRs for five months.
The suspect also got a Running Finance facility (loan) from XYZ Bank against security of term deposits. The suspect was issued a high value demand draft in favour of person D from his running financing facility. After 10 months of utilizing running financing facility, the entire bank’s loan liability was paid off in one go through liquidation of TDRs.
This appeared a typical ML arrangement for routing of apparently illegitimate funds through acquisition of winning prize bonds, investing in TDRs, seeking running finance facility, and asset acquisition. The illegitimate funds were suspected to be kickbacks or embezzled public funds, since the suspect was holding a government office entrusted with district management powers. The suspicious transaction was shared with LEA for further proceedings.
Next

Alternate Remittance Service / Hawala/ Hundi
Case-I
The case involves transfer of funds via cheques from and to the inter-connected accounts maintained in the border area branches by a network of individuals/entities. Moreover, a significant proportion of funds were moved from the accounts maintained at Bank A’s border town branches to accounts maintained at Bank A’s tribal area branch. The individuals involved were young and unlikely to have such large transactions. The movement of funds to the tribal region without any plausible justification made the transactions suspicious to hawala and other criminal activities including terrorism financing. Further, CTRs reported on the individuals indicated that the suspects also held accounts with other banks in the region as well. The case was reported to LEA for further investigation.
Case-II
Multiple STRs were reported on foreign individuals residing in Pakistan suspected to be involved in activities related to hundi/hawala. Some foreign individuals maintained account with ABC Bank. Some of these accounts were personal accounts while others were Sole Proprietorship accounts. The transactional pattern in all these accounts did not match with the profile of the customers. The turnover was very high and very frequent transactions took place in the accounts. The transactions were also being carried out with unrelated counter-parties. All these individuals conducted inter-linked transactions in each other’s accounts. Most of these individuals were not registered with tax authorities.
During analysis of STRs, it was revealed that one of the suspects was already involved in hawala/hundi activities. Accordingly, the financial intelligence on all the connected individuals was forwarded to the LEA to assist them in apprehending the illegal network of hawala/hundi operators.
Case-III
The accounts of D-Trading Company (person DK), S-Fruit Merchant (person SSK), K-Trading Company (persons KK and JK) and A-International Corporation (person AK) were reported by XYZ Bank. The accounts were either opened as proprietorship or partnership concerns. The accounts were reported to the FMU due to heavy turnover in the accounts and transactions with individuals / entities unrelated to the nature of business of the account holders.
During analysis, the accounts of D-Trading Company, S-Fruit Merchant, K-Trading Company and A-International Corporation were found to be linked by the transfer of funds. The accounts were being maintained in XYZ Bank at the same branch located in tax exempted region. An identical pattern of transactions was noticed in all these accounts. Additional accounts of suspects were identified via CTRs. Furthermore, different businesses were mentioned by the suspects in the accounts maintained at different banks and the suspects were not registered with tax authorities, except for AK.
From the activity in the accounts and the location of the accounts, it was suspected that the suspects were engaged in the business of illegal hawala/hundi. Therefore, the financial intelligence was disseminated to LEA for investigation.
Case-IV
A STR was reported on account of news aired on a local TV Channel. According to the news, a local businessman had received a threatening call from a foreign jurisdiction asking him to deposit an amount into an account maintained by person X in a local bank. A search of the FMU’s database revealed a link between the account numbers and other individuals maintaining accounts with the same and other banks.
Analysis of all the linked accounts identified a nexus of Hawaladars who were suspected to be facilitating the network. Analysis of statement of account reflected frequent transfers of funds from/to different accounts. The matter was thus referred to LEA for investigation.
Use of Internet for Money Laundering
The accounts of individuals suspected to have links with individuals running an international cyber-crime racket were reported. Moreover, upon further investigation, one of the culprits was also listed with Interpol. The suspects were involved in cybercrime and earned revenue by generating traffic on various Premium Rate Services (PRS). The suspects used a complex method to defraud the telecom service providers. The suspects hacked into a vulnerable enterprise’s PBX (telephone system) and placed multiple calls to his own PRS numbers. The hacked enterprises were technically responsible for paying the fraudulent charges but in reality they rarely paid for them. The enterprise service provider then routed the call to the provided premium rate numbers and got the call terminated by a hosted IVR system. The service provider was supposedly paying the premium rate number provider extra fee that it would be receiving from the hacked enterprises, who would then be sharing a portion of the revenue from the calls with the number’s owner. The financial intelligence was referred to LEA for further investigation.
Laundering from Tax Offences
The proprietorship accounts of IK and SA were opened in a tax exempted region and transactions in their accounts were conducted online in order to evade withholding tax on cash withdrawals. Furthermore, from the transactional activity and the region where the accounts were maintained, it was likely that IK and SA were involved in hawala/smuggling/trade-based money laundering.
Two proprietorship accounts maintained by IK and SA were reported. The accounts were maintained at XYZ Bank’s branch located in tax exempted area. The accounts were reported by the bank due to large turnover and inconsistent patterns of transactions – transactions were conducted with unrelated counterparties and the transactions in the accounts were conducted online from different regions.
Upon analysis, the accounts of IK and SA were found to be linked due to common office contact number provided in the account opening forms. Further, it was revealed that the accounts were operated by a third party under a mandate, which raised concerns regarding the beneficial ownership of the accounts. Besides large turnover reported in the accounts, many transactions in cash mode were conducted in the accounts and a majority of the transactions in the accounts were conducted online from XYZ Bank’s branch located in tax exempted area.
Many CTRs were reported on IK and SA and from these reports various other banking relationships maintained by IK and SA in different banks were identified. For an account maintained by IK, an STR was reported when he tried to remit USD 900,000, however, the request to transfer the funds was declined by the bank. The said activity was also conducted in ABC Bank’s branch located in tax exempted area.
It was apparent from the transactional activities that the accounts of IK and SA were maintained in tax exempted area to evade withholding tax on cash withdrawals. Due to large turnover in the accounts being maintained in the tax exempted area with the intention to misuse the tax exemption regime, carry out transactions potentially linked to smuggling and trade-based money laundering, the financial intelligence was shared with the relevant LEAs for investigation. Furthermore, the matter was also referred to the regulator to look in to the matter to discourage such practices.
Use of Nominees / Trustees / Family Member’s Accounts
As per news report, a Person ‘A’ allegedly involved in criminal activities and most notably in facilitating target killers, was got killed in May, 2015 in an encounter with the law enforcement agencies. Due to adverse media information, his and mother’s accounts (suspected to be beneficially owned by Person A) were reported to FMU.
Some connected accounts were also reported to FMU owing to huge movement of funds. Out of the different accounts reported to FMU, it was observed that one of the accounts was of person A’s mother Z, in which huge amount of funds were placed over a long time period. Z’s account was opened as a photo account by the bank which requires personal presence of account holder for transactions in the account. Upon analysis of the statement of her account, it was revealed that huge amount of funds were credited in her account via 104 clearing cheques deposited in a single day. Interestingly, the cheques deposited in the account were of different amounts and drawn on various banks. No transaction in the account was subsequently noticed in the account for a long time. However, most of the funds were withdrawn from her account in the months of May and June, 2015. The withdrawals from her account were made via transfers and pay orders. The analysis of counterparts’ details revealed that most of the withdrawals from her account were made to make investments in properties.
FMU analysis, on the basis of transactions in A’s and Z’s accounts and counterparties details, was of the view that the accounts might have been used to route funds relating to criminal activities. FMU referred the matter to LEA for investigation with a view to help the LEA in identifying the people associated with person ‘A’ in his alleged criminal activities.
Co-Mingling of Funds
It was reported to FMU that large volumes of credits were made in the account of person ‘X’. The funds were then debited from the account on same day/next day. It was also observed that most of transactions were related to Foreign Currency Encashment i.e., person ‘X’ made encashment from his US Dollar account into PKR and the same were then credited in his PKR account. Afterwards, he made cash withdrawals below CTR threshold from his PKR account on same day or next day. The purpose of these transactions was not provided to the bank.
During analysis, it was observed that no significant activity was observed in his PKR account since inception of account on 13-10-2009 till an online credit transfer of relatively higher value from an entity’s account was made on 19-07-2012. After that, significantly high value transactions were noted in his PKR account during the months of September and December 2012. The entity’s account was searched in FMU’s internal database and several CTRs were found under the title of Exchange Company.
In addition to above, large amount of funds were transferred in his PKR account from his US Dollar Account as intimated by the bank.
The account holder was probably trying to mingle the proceeds from Exchange Company business with his savings in the personal account to understate the business income or to camouflage the proceeds. Financial information was, therefore, disseminated to State Bank of Pakistan citing possible attempt to circumvent the rules involving Exchange Company business; structuring of transactions; and intermingling the suspected business proceeds.
Structuring of Funds
A set of accounts were reported to FMU wherein the individuals were connected by way of employment in a company ‘B’. Company ‘B’ enticed people by offering attractive profits as a return on their investment in their company besides offering jobs to the unemployed. In response, hundreds of people invested their savings with this company or applied for jobs in the company by depositing application fees in their bank account. However, the company was a fraudulent entity and it deprived people of their hard-earned money. Around 525 individuals filed applications against the company for depriving them of their hard-earned money. It was suspected that the scam involved funds over PKR1.88 billion.
During analysis, it was noted that that large amounts of funds were credited in company’s account through online transfers or deposits in cash by different individuals. The accumulated funds flowed from the company’s account in a structured manner through online cash/ATM transfers to the personal accounts of individuals who were either employees of the company or were involved in other businesses. The funds were then taken out from the personal accounts through online cash withdrawal. The matter was referred to LEA for investigation
Use of False Identification
The suspect ‘JKL’ opened an account at the branch of Bank ‘X’. At the time of account opening the information provided by the suspect stated that he was working as an Associate and dealing in property business. The account was opened for saving purpose.
Two officials of the government department lodged a complaint with bank ‘X’ against the suspect ‘JKL’ and stated that their two cheques were stolen and issued with forged signatures amounting to PKR3,000,000 and Rs.2,500,000. The proceeds of both the cheques were credited in the account of JKL through clearing. Some of the funds were immediately withdrawn in cash while the remaining funds were returned to the issuing bank after receipt of complaint.
From the trail of transactions, it was observed that the account was primarily used to conduct transactions related to the stolen cheques and that no other significant transactions took place in the account. Furthermore, it was noted that the suspect had used signatures, different from his CNIC, to operate the bank account. Both signatures were very different and, therefore, suggested a possibility of a benami account. The case was, therefore, referred to LEA for necessary action.
Strategic Analysis
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Strategic Analysis Typology : Branchless Banking
Branchless Banking
Multiple suspicious transaction reports have been reported to FMU on Branchless Banking Retail agents. The details show that they are owners of either PCOs or kiryana stores and belong from different areas all across the Pakistan. All of them were maintaining Agent (branchless banking level-3) Accounts.
Main Findings of the Analysis:
The agents reportedly executed huge volume of P2P transactions using a single mobile phone number linked with several CNICs. Many instances were found where the agents carried out transactions by changing only the last digit of the CNIC numbers of the senders as well as the receivers. When the CNICs were checked through NADRA Verisys, the verification turned out to be negative with remarks “No Record Found”. As per SBP’s branchless banking regulations, revised on July 12, 2016, the transaction limit for P2P transactions can go up to Rs.50,000/- per month in case the Biometric verification System (BVS) is used at both sender and beneficiary end, however, the limit for P2P transactions is up to Rs. 15,000/- per month in the absence of Biometric Verification System but the agents are required to obtain the copies of the CNICs of the senders and receivers in that case.
Red Flags:
• The senders and the receivers of the funds remain unidentified due to use of fake CNIC numbers.
• All the transactions were structures and were carried out under the BVS (Bio Metric Threshold) which was 15000/- per month on each CNIC
• The purpose of transfer of funds could not be ascertained.
Based on these findings the matter was referred to SBP to take necessary measures in the regard.
Action Taken by the Regulator:
• As per feedback received by SBP since July 01, 2017 onwards OTC transactions are allowed with biometric verification only.
• SBP’s Circular on biometric for BB services is available on the below link: C9-Annx-A
• In follow up to above circular, SBP has also issued a letter to BB operators dated March 24, 2017.
• Moreover, the reported accounts of BB agents were also blocked by the reporting entities based on the feedback provided by FMU.
Virtual Currency
Background of the Case:
The individuals were involved in virtual currency (Bitcoin) business which is considered high risk in terms of anonymity of transferor/transferee of funds. They were using their bank accounts for sale and purchase of Virtual Currency (digital currency) which is not a legal tender in Pakistan.
Modus Operandi:
Multiple STRs were reported from different banks wherein similar nature of transaction activity was noticed in several accounts being maintained by different individuals. The suspicion was that the individuals were involved in dealing with virtual currency. The transactional pattern in their accounts revealed that funds were being credited into the accounts through IBFT, INET, Mobile Banking and transfers through ATM, which were subsequently being debited through cash withdrawals via ATM and transfers. It is pertinent to mention here that these individuals were not using on-counter services of banks but the other channels such as ATM, Internet banking and mobile accounts for transactions related to sale/purchase of virtual currency. Moreover, they were transacting with unrelated counterparties. The individuals were mostly young in age and involved in information technology/ online businesses and some of them were even students.
During the public databases search it was found that the individuals are very active on social websites and influencing people through internet marketing for buying and selling of E-Currency and providing a platform to potential customers of Bitcoins. It is pertinent to mention here that State Bank of Pakistan do not recognize cryptocurrencies as legal tender.
As per information extracted from FMU’s database of STRs/CTRs, few of the individuals were also maintaining multiple accounts and similar nature of transactional pattern was noticed also in those accounts. Based on the analysis, following red flags were noticed:
• Virtual currencies are very volatile in nature and offer an efficient and anonymous way to store and transfer funds online.
• Virtual currencies can be used as a tool for Money Laundering due to decentralization of peer-to-peer online transactions and their anonymity.
• Virtual currencies are also the source to launder tax evaded money as it is easy to park un-taxed money abroad through such digital currencies.
• Further, virtual currencies such as Bitcoins can be exchanged for real money and can be easily transferred online, which is potentially vulnerable to terrorist financing abuse.
Accordingly the strategic analyses was shared with State Bank of Pakistan for appropriate measures/controls on emergent use of bank accounts for virtual currencies such as Bitcoins.
Banking Instruments / Products / Services used:
Inter Bank Fund Transfers, Internet Fund Transfers, Mobile Banking, ATM withdrawals and transfers and online cash deposits/withdrawals.
Action Taken by the Regulator:
Based on our strategic analysis and internal findings of SBP, the regulator issued guidelines vide BPRD Circular No. 03 of 2018 dated April 06, 2018 and FE Circular No. 03 of 2018 dated April 18, 2018 to its reporting entities regarding the prohibition of dealing in Virtual Currencies/ tokens. In addition the State Bank of Pakistan also issued a caution letter regarding the risks of Virtual Currencies for general public awareness vide ERD/M&PRD/PR/01/2018-31 dated April 06, 2018.
• Prohibition of Dealing in Virtual Currencies / Tokens
• Prohibition of Dealing in Virtual Currencies/Tokens/C3
• Caution of Regarding Virtual Currencies
Exchange Policy Department





FE Circular No. 03 of 2018 April 18, 2018

The Chief Executives of all
Exchange Companies and
Exchange Companies of ‘B’ Category
Dear Sir(s) / Madam,
Prohibition of Dealing in Virtual Currencies / Tokens
Virtual Currencies (VCs) like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond etc. or Initial Coin Offerings (ICO) tokens are not legal tender, issued or guaranteed by the Government of Pakistan. State Bank of Pakistan has not authorized or licensed any individual or entity for the issuance, sale, purchase, exchange or investment in any such Virtual Currencies/Coins/Tokens in Pakistan.
2. In view of the foregoing, Exchange Companies and Exchange Companies of ‘B’ Category are advised to refrain from processing, using, trading, holding, transferring value, promoting and investing in Virtual Currencies/Tokens. Further, Exchange Companies and Exchange Companies of ‘B’ Category shall not facilitate their customers to transact in VCs/ICO tokens. Any transaction in this regard shall immediately be reported to Financial Monitoring Unit (FMU) as a suspicious transaction.
3. Please acknowledge receipt.

Yours truly,
Sd/-
(Fazal Mahmood)
Director



Banking Policy & Regulations Department





BPRD Circular No. 03 of 2018 April 06, 2018

The Presidents/ Chief Executive Officers,
All Banks/ DFIs/ Microfinance Banks/ PSOs/ PSPs,



Dear Sir/Madam,
Prohibition of Dealing in Virtual Currencies/Tokens
Virtual Currencies (VCs) like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond etc. or Initial Coin Offerings (ICO) tokens are not legal tender, issued or guaranteed by the Government of Pakistan. SBP has not authorized or licensed any individual or entity for the issuance, sale, purchase, exchange or investment in any such Virtual Currencies/Coins/Tokens in Pakistan.

In view of the foregoing, all Banks/ DFIs/ Microfinance Banks and Payment System Operators (PSOs)/Payment Service Providers (PSPs) are advised to refrain from processing, using, trading, holding, transferring value, promoting and investing in Virtual Currencies/Tokens. Further, banks/DFIs/Microfinance Banks and PSOs/PSPs will not facilitate their customers/account holders to transact in VCs/ICO Tokens. Any transaction in this regard shall immediately be reported to Financial Monitoring Unit (FMU) as a suspicious transaction.


Please acknowledge receipt.

Yours truly,
Sd/-
(Muhammad Akhtar Javed)
Director



External Relations Department Page 1 ERD/M&PRD/PR/01/2018-31 April 6, 2018 CAUTION REGARDING RISKS OF VIRTUAL CURRENCIES General Public is advised that Virtual Currencies/Coins/Tokens (like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond etc.) are neither recognized as a Legal Tender nor has SBP authorized or licensed any individual or entity for the issuance, sale, purchase, exchange or investment in any such Virtual Currencies/Coins/Tokens in Pakistan. Further, Banks/ DFIs/ Microfinance Banks and Payment System Operators (PSOs)/ Payment Service Providers (PSPs) have been advised not to facilitate their customers/account holders to transact in Virtual Currencies/ Initial Coin Offerings (ICOs) /Tokens vide BPRD’s Circular No. 03 of 2018. Virtual Currencies/Coins/Tokens provide high degree of anonymity and potentially can be used for facilitating illegal activities. Also due to the ambiguous nature of Virtual Currencies, no legal protection or recourse is available to any individual in the event of a loss incurred due to any or all of the following risks: a) High price volatility as investments tied to Virtual Currencies are highly unstable and are primarily based on speculations; b) Failure/closure of Virtual Currency exchanges/businesses due to any reason including action by law enforcement agencies; and c) Hacking/security compromises of crypto currency exchanges and wallet businesses as a number of instances have been recorded around the world where huge amount of funds have been lost due to the exchange/wallet operations being hacked/compromised. Further, Fraudsters are also offering pyramid style investment schemes and coins and promising high returns (similar to Ponzi schemes) to the general public in Pakistan. This can cause significant loss to the General Public. General Public is advised that domestic and international payment and money transfer services in Pakistan are regulated by SBP under the applicable laws. In this regard, no entity is currently licensed or authorized by SBP to offer money remittance services and products in Pakistan using Virtual Currencies/ Coins/Tokens. Persons using Virtual Currencies/ Coins/Tokens for the purpose of transferring value outside Pakistan are subject to prosecution as per the applicable laws. In view of the above, the General Public in their own interest is advised to be cautious of and refrain from indulging in activities relating to mining, trading, exchanging, transferring value, promoting and investing of Virtual Currencies/Coins/Tokens to avoid any potential financial loss and legal implications. *****************
Contact Us
Financial Monitoring Unit
SBP Main Building, 2nd Floor
I.I Chundrigar Road
Karachi - Pakistan

Phone Number: 021-32453162
E-Mail Address: info@fmu.gov.pk