I have consistently written various columns on FATF. I mentioned in my last column that out of 40 FATFs, only one condition remains to be implemented, which is related to questionable investment in property and documentation of the real estate sector. According to the World Bank, Pakistan’s real estate sector is worth  300-400 billion, while its share in GDP is 2% or 5 5 billion annually.

The Prime Minister had announced a construction amnesty to provide employment and affordable housing in the country, which led to a surge in construction and related sectors.

A few days ago, the new chair of the FBR, Dr. Muhammad Ashfaq, announced that a complete record of sales and purchases would now be obtained from builders, developers, and real estate agents in Pakistan and that they would be subject to anti-money laundering and terrorist financing laws.

We will investigate suspicious transactions for which I will give property dealers a simple 4-page questionnaire to be filed online while the FBR has also proposed a licensing system for the registration of 22,000 property dealers.

Readers! The real estate sector in the country is the easiest way to hide black money as the official value of the property is much less than the market value and the property is declared less than half the value while the balance is paid unofficially due to which the government pays taxes.

Recovery is low. This simple method of concealing black money has been going on for decades, which has now been objected to by the FATF, which has called for reforms to document the real estate sector through implementing anti-money laundering laws.

According to the FBR’s new procedure, the property dealer will now have to provide all the details including payments when buying or selling a property in the 86-question questionnaire. According to FATF guidelines, no property can be bought or sold from any terrorist or banned organization and we cannot transfer the proceeds from the sale of any property to terrorists.

The FBR has provided a list of 4,500 terrorists to real estate agents through an app. The concerned authorities should be informed immediately. In addition, the seller or buyer of the property must also disclose the original owner of the property.

If the third party is buying the property instead of the real buyer, then they have to inform about the actual owner of the property and also provide the money trail of the deal which is not being implemented nowadays.

The FATF condition also applies to inherited property. After these measures, it will no longer be possible to have anonymous property. In order to implement these conditions, it is necessary to document buying and selling property, shop, house, and land in Pakistan. According to the FBR, I have proposed penalties along with fines for non-compliance with the new procedure. According to the new amendments, the fine will be increased from Rs 10 million to Rs 50 million and

10 years’ imprisonment.

With this, the arms licenses of those included in the list of terrorists will be revoked and no institution will give loans to any suspected terrorist. In case of non-compliance with the Terrorism Act, we can find the lending institution up to Rs 5 crore. All movable and immovable property of a person belonging to a banned organization will be immediately frozen and in case of non-verification of the property, they will foreclose it.

Apparently, these FATF rules seem very strict, on which the Association of Builders and Developers (Abad) has expressed concerns that these measures will affect construction projects and reduce the country’s economic growth.

Pakistan June 29, 2018, Is on the FATF’s gray list, and in the last meeting from February 22 to 25, 2021, Pakistan was asked to take further steps in three areas to curb the financing of extremists, including financing terrorists and working for banned organizations.

This includes prosecuting those involved and punishing those involved in financing them. Pakistan has implemented 26 out of 27 FATF action plans in the last 38 months and now we have to fully implement the remaining 3 points and get Pakistan off the gray list as soon as possible as it is good for Pakistan to remain on the gray list for the country’s weak economy. There will be no omen.

According to media reports, Turkey, China, and Saudi Arabia (observer) had opposed the resolution to include Pakistan in the gray list, but later China and Saudi Arabia also voted against Pakistan. The State Department should convince the remaining 33 FATF countries that Pakistan has taken effective measures against anti-money laundering and terrorist financing, including amendments to the country’s laws that would further put Pakistan on the gray list.