FATF: FBR slaps new restrictions on real estate businesses

By Muhammad JuniadPublished On 04 Jan 2023

The Federal Bureau of Revenue (FBR) has imposed new restrictions on property dealers, realtors, and everyone else working in the real estate sector to meet conditions set by the Financial Action Task Force or FATF.

The FBR issued a notification on Tuesday spelling out new restrictions which ban any business deal with people convicted for crimes. The executives working at real estate firms will also face scrutiny.

The Anti-Money Laundering and Counter-Terrorism Financing Regulations have been amended to reflect new restrictions. 

The new regulations say that a convicted person cannot be given any position at Designated Non-Financial Business and Professions(DNFBP).

The FATF has identified certain types of “non-financial” businesses as being susceptible to money laundering and terrorist financing due to the nature of their business and the transactions that they may conduct. Real estate developers and agents that carry out transactions with a customer involving the buying or selling of real estate top the list of DNFBPs.

Others DNFBPs include dealers in precious metals and stones, law firms, accounting firms, and services that help set up companies on papers.

The new FBR regulations say that a convicted person cannot become a beneficial owner or hold a senior position in DNFBPs.

This effectively expels all convicts from the real estate sector.

Property businesses and other DNFBPs would also be required to inform the government if there is a change of beneficial owners or senior executives at the company.

Earlier in December, The government of Pakistan made it compulsory for real estate agents to register with the Federal Board of Revenue (FBR).

An FBR notification issued at the time said that no government or private developer will be allowed to do business with unregistered real estate dealers.

Unregistered agents will not be able to register or transfer properties, the FBR had said.