Islamabad:
The identification of politically exposed persons has remained uneven and there was no insufficient red drapives specific to corruption which could detect improper use of the public service in Pakistan, according to the first conclusions by an assessment of diagnostic of corruption of the International Monetary Fund (MFI).
The IMF has shared observations projects as well as recommendations to the government, giving Islamabad the opportunity to review them before the diagnostic evaluation report of governance and corruption was published by the end of this month, sources said in The Express PK Press Club.
“The effectiveness of the identification of politically exposed people remains unequal between sectors due to limited access to complete data, the absence of automated screening tools in small institutions and a lack of red flag indicators specific to corruption that would help detect improper use of the public service, said the project project.
The lender has recommended to publish new guidelines by learning of the world’s best practices to identify the abusive use of the public service and verify any corruption in government contracts. Pakistan has embarked on the IMF in September of last year that it would completely publish the report once it is finished.
Under the $ 7 billion agreement, the IMF had sent the diagnostic and corruption assessment mission to Pakistan this year, which met around three dozen government and state institutions.
At the request of Pakistan, the IMF had extended the deadline to publish the July to the end of August this year report.
The politically exposed persons include the head of state, the head of government, politicians, bureaucrats, the judiciary, military officials and senior executives of public enterprises, ambassadors and deputies. There are special checks for the opening and operations of the bank accounts of politically exposed persons.
While the report identified some major shortcomings, it also recognized the efforts that the Pakistani authorities have made to set up a basic structure to minimize the chances of corruption and the abusive use of the public service by politically exposed people.
The draft report indicates that the identification of politically exposed persons is guided by the regulatory requirements issued by the Pakistan State Bank (SBP), the Securities and Exchange Commission of Pakistan (SECP) and the Federal Board of Revenue (FBR) for their respective supervised entities.
He added that financial institutions and designated non -financial businesses and non -financial persons (DNFBP) are required to apply improved reasonable diligence measures before processing politically exposed. Improved control measures include obtaining the approval of senior management, the establishment of the source of wealth and the realization of continuous monitoring.
But small institutions do not effectively apply these guarantees, observed the special mission in its project. The project said that institutions are largely responsible for the development of their own internal systems to identify and manage risks beyond the official lists given by regulators.
The reporting draft report also said that regulators’ declaration institutions often lacked clarity on typologies and risk indicators specific to corruption. Sources have said that the IMF was of the opinion that, despite the specious transaction report guidelines and red flag indicators for various sectors and typologies, declaration institutions have limited access to typologies that reflect the common methods of corruption whitening.
As part of the guarantees, the FBR had also created an online platform through which financial institutions can filter customers against official lists of federal public officials, including senior officials serving from 17th to 22 years and members of the Parliament.
The sources said that the IMF had referred to certain international best practices adopted by countries such as Canada and Colombia, which helped to alleviate the chances of corruption through better detection of cases.
Canada has published red flag indicators for transactions involving government contracts, municipal purchasing and behavior related to politically exposed people, the use of business entities or consultants in public sector diets and layers in layers, rapid turnover of contracts and the accumulation of unexplained wealth in little -salary public roles.
Similarly, the Colombia’s financial intelligence unit has developed sectoral indicators targeting health care purchases during the cocovated pandemic, SEE laundering via construction companies and extractive industries, and payments routed through regional entities to avoid detection.
Sources have said that Pakistan could benefit from the issue of specific directives on identifying unusual financial behavior linked to politically exposed persons and state contracts.
The Ministry of Finance spokesman did not answer the questions if the Consultations on IMF results were completed and the report would be published by the end of this month.
The sources said that the Ministry of Finance had given a deadline last Friday to the various departments to meet the observations and recommendations of the IMF. Some of the entities have accepted some observations while others have requested revisions by not being part of the IMF conclusions.
Sources have indicated that due to the heavy process involved in the dissemination of all recommendations, the government may take more time than the time required to publish the document.
