Mandatory compliance reports on terrorist funds for regulator

KARACHI – The federal government has made it mandatory for the stock regulator to submit fortnightly compliance reports to the Ministry of Foreign Affairs with regard to their efforts to freeze the funds of Al-Qaeda, Taliban and their international associates. The move came after Islamabad put half a dozen more Russia based terrorists on its sanctions list of Al-Qaeda, Taliban and its associates identified by the United Nations Security Council.
Pakistan, in line with the UNSC resolutions, has frozen the funds of Doku, Khamatovich, Umarov and some other al-Qaeda operatives of Russian origin identified by the UNSC’s Al-Qaeda and Taliban Sanctions Committee. As the move came, all regulatory institutions of the country have been asked to undertake necessary action in this concern as well as submitting “consolidated fortnightly compliance” reports to the Ministry of Foreign Affairs through the Securities and Exchange Commission of Pakistan (SECP).
This was revealed in a notice issued by the SECP to the country’s three stock exchanges, National Clearing Company of Pakistan Limited (NCCPL), Central Depositary Company of Pakistan (CDCP) and Pakistan Mercantile Exchange Limited. The move was recommended and notified by the Ministry of Foreign Affairs through an official gazette, SRO No 198(1)/2011, on the March 11, 2011. “You are requested to forward the Government’s directives to your regulated entities for taking necessary actions to freeze the funds of the nature mentioned in the attached SRO,” the apex regulator informed the KSE management.
It noted that regulators were required to communicate to their regulated entities the need to provide compliance reports, even if no step is taken, on the action required in the attached SRO on a fortnightly basis. “Additionally, you are advised to submit a consolidated fortnightly compliance report based on the reports submitted by the regulated entities to the SECP,” it said.
The SECP would further share the mandatory compliance reports with the Ministry of Finance Affairs, the notice stated. Moreover, the apex regulator also asked regulators to regularly visit the UNSC website, where the Consolidated List of the Al-Qaeda and Taliban-related operatives is maintained, to stay informed of such entities/individuals and take the necessary action for the freezing of funds.
To this effect, the SECP also shared a copy of the said SRO issued by the Ministry of Foreign Affairs that reads: “Whereas the UNSC vide its Resolutions Nos. 1267(1999), 1333 (2000), 1373 (2001), 1390 (2002), 1455 (2003)4526 (2004), 1617 (2005), 1735 (2006) and 1822 (2008), 1904 (2009) has directed to apply travel restrictions, arms embargo and to freeze the funds and other financial resources of certain individuals and entities; And Whereas the United Nations (Security Council) Act, 1948 (XIV of 1948) enjoins upon the Federal Government to apply certain measures far giving effect to the decisions of the United Nations Security Council; Now, therefore, in exercise of the powers conferred by Section 2 of the United Nations (Security Council) Act, 198 (XIV of 1948), the Federal Government is pleased to order that the individuals and entities listed… to this order reflecting the updates made by the Al-Qaeda and Taliban Sanctions Committee of the UNSC in addition to the earlier notifications….”