Govt raises currency transaction report threshold to Rs3m

ISLAMABAD: The government has enhanced the currency transaction threshold by 50pc to Rs3 million for banks to trigger suspicious reports to the Financial Monitoring Unit of the State Bank of Pakistan under the Anti-Money Laundering Act.

The increase in threshold from Rs2m to Rs3m for Currency Transaction Reports under the framework for analysing Suspicious Transaction Reports and CTRs was approved by the National Executive Committee on Anti-Money Laundering and Countering Financing of Terrorism.

An STR is reported when a suspicious transaction or activity involving money laundering and terrorism financing is indicated. However, a CTR is required to be reported when a cash transaction is equal to or exceeds the specified threshold — now raised to Rs3m.

Regulatory framework and oversight

The NEC, led by Finance Minister Muhammad Aurangzeb, is responsible for setting limits for banks, financial institutions or other agencies dealing with financial transactions to generate CTRs and STRs on the amount of currency transactions through notifications in the official Gazette.

It serves as a strategic forum for strengthening Pakistan’s AML-CFT framework and ensuring timely coordination, inter-agency cooperation and consistent monitoring for effective implementation of the measures discussed.

The committee also approved the inclusion of Section 28 of the Pakistan Maritime Zones Act 2023 in Schedule I of the AMLA, meaning that maritime piracy has been covered as a predicate offence.

Inclusion of virtual assets

Section 28 of the Maritime Zones Act 2023 defines “piracy” as any illegal act of violence, detention or depredation committed for private ends by the crew or the passengers of a private ship or a private aircraft and directed against another ship or aircraft or against persons or property onboard.

The NEC also approved the inclusion of the Pakistan Virtual Assets Regulatory Authority in Schedule IV of the AMLA, meaning that the crypto body would also have regulatory powers over virtual and digital assets to meet AML-CFT requirements, like the SBP, Securities and Exchange Commission of Pakistan and Federal Board of Revenue, among others.

Under the AMLA, the FMU is designated to receive STRs and CTRs from reporting entities, analyse them and, if need be, seek the entire record and information related to the transaction in question from any agency or individual in Pakistan.

All agencies and individuals are bound to promptly provide the requested record and information to enable the FMU to share its analysis on a confidential basis with the concerned investigating or prosecuting agencies, or with the financial intelligence units of other countries to make reciprocal arrangements to share, request and receive information relating to money laundering, the financing of terrorism and other offences.

An official statement said the meeting reviewed compliance with its past decisions and progress on Pakistan’s AML-CFT regime, including the performance of the FMU, institutional capacity and initiatives involving artificial intelligence and machine learning.

Aurangzeb emphasised the importance of regular and timely follow-up and stronger coordination among the relevant institutions to ensure effective implementation of the national AML-CFT framework. He also called for strengthening the FMU’s analytical and operational capacity through a clear implementation roadmap with defined timelines.

The NEC also highlighted the importance of keeping Pakistan’s AML-CFT framework responsive to evolving financial risks and emerging technologies, while strengthening the analytical capabilities of relevant institutions.