Keeping in view the safety and authenticity of real estate and jeweler dealings in Pakistan; the Federal Board of Revenue has decided to shape a Directorate General of Designated Non Financial Business and Professions termed as DNFBPs at the capital of Islamabad. This is being done with the purpose to monitor and register all the business activities that take place in the real estate sector, jeweler industry as well as accountants.
Orders For DNFBP Registration:
This is huge news for the property market of Pakistan. DNFBP is a major step towards controlling underlying criminal activity within the real estate sector of Pakistan. As the DNFBP aims to control illegal transactions and money laundering in real estate; it is now a requirement for a real estate agent to be registered under the DNFBP from the 1st of January 2022. This means great things. Without further ado let us explain to you the importance of DNFBP and its implications on the property market.
The need for DNFBP:
The primary goal is to prevent money laundering and terrorist financing in these economical sectors of state. As we all know that Pakistan has seen immense growth in its property sector. But in between the astoundingly speedy scale of its growth; a few scammers and fraudsters have crept in to scam unsuspecting people. Overall this creates an opportunity for criminals to guise themselves as real estate investors and hide from the governing bodies of state.
The record keeping of property’s actual beneficial owners is to be kept under this body. Keeping the record will go a long way in solving all ownership disputes that creep into the real estate sector ever so often. If the property’s dealership and transaction are being monitored and registered under a governing body; then illegal takeovers from land mafias are going to be resolved with much more ease for the common man. No longer will the Pakistani man have to worry as much about their real estate dealer or the faithfulness of their investment.
Implications of DNFBP:
Under the customer due diligence (CDD) as well as the beneficial ownership, the real estate agents, jewelers and accountants have to:
Conduct Customer due diligence in matters set out in Section 7A(1) of the AML act; while engaging in: Real estate agents involved in transactions for a client concerning the buying or selling of real estate.
The jewelers and jewel dealers in this regard have to document any cash transaction in precious metals or stones with any client which is equivalent to r above 2 million.
Similarly for accountants: when they prepare for, or carry out, transactions for their clients concerning the activities described in Section 2(xii)(c) and (d) of the AML Act.
Due to this, The DNFBP:
Shall identify the customer when they are entering in a business transaction. This will also account for the customer’s identity using reliable and authentic source documents. This data from the dealing parties will be required under these regulations.
Will identify the beneficial owner and will take measurable identity of the beneficial owner by using the reliable and independent documents, data and source information.
The BNFBP will also take appropriate steps in accordance with Section 7F of the AML ct to identify the reach and comprehend their risks for customers or geographic areas, products, services and delivery means for monetary transactions.
Moreover the DNFBPs shall have the necessary framework of policy, control and procedure which are being approved by higher authority/management. This will help the DNFB to manage and reduce the risks that are identified in its own assessment or the risks that are highlighted by the FBR. DNFBP will also monitor the implementation of those controls and boost them if there is a necessity to do so. If the risks have been successfully mitigated the DNFB will continue to work under more simplified measures to control further fraudulent activities within these industries.
The records that will be kept registered under DNFB will be enough to reconstruct the transactions and help to identify the beneficial owner of the asset by providing the nature, date, type, monetary amount as well as currency involved in the transaction type. This will also hold great importance in providing convincing leading evidence in case of criminal activity trials.
Moreover the real estate agents and others under the DNFB will be required to keep a list of all such customers where the business transaction was refused.
This is truly great news for the investors of Pakistan’s real estate industry that initiative in the form od DNFBP is being taken to make real estate transactions more secure. These will not only fish out any money laundering schemes but the scammers working on a smaller scale will also be warded off under its operations.
DNFBP’s implementation will make more people gain confidence while investing in property market of Pakistan making it flourish at an even faster pace.