Islamabad:
The identification of politically exposed persons remained uneven, and there were insufficient corruption -specific red flags that could detect the abuse of public office in Pakistan, according to the first conclusions of a corruption diagnostic assessment mission for the International Monetary Fund (IMF).
The IMF has shared the draft observations with recommendations with the government, giving Islamabad an opportunity to review these before the Government of Government and Corruption, Diagnostic Assessment Released at the end of this month, sources of Express Pakinomist told.
“The effectiveness of the identification of the politically exposed persons remains uneven across sectors due to limited access to extensive data, the absence of automated screening tools in smaller institutions, and a lack of corruption -specific red flag indicators that would help register the abuse of public office, the draft of the report stated.
The lender has recommended issuing new guidelines by learning from the best global practice to identify the abuse of the public office and control any corruption in government contracts. Pakistan committed to the IMF last September that it would fully publish the report when it is completed.
According to $ 7 billion, the IMF had sent the IMF diagnostic assessment mission for governance and corruption to Pakistan this year, met with about three dozen government and state institutions.
At the request of Pakistan, the IMF had extended the deadline to publish the report from July to the end of August this year.
The politically exposed persons include the head of state, the head of the government, politicians, bureaucrats, judiciary, military officials and senior executives of the state -owned companies, ambassadors and MPs. There are special checks for opening and operating bank accounts for the politically vulnerable persons.
While the report has identified some major gaps, it has also recognized the efforts that the Pakistani authorities did to get a basic structure to minimize the chances of corruption and abuse of the public office of politically vulnerable persons.
The draft report says the identification of the politically vulnerable persons is governed by regulatory requirements issued by the State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP) and the Federal Board of Revenue (FBR) for their respective monitored units.
It added that the financial institutions and designated non-financial companies and persons (DNFBPS) are obliged to apply improved Due Diligence measures before dealing with the politically vulnerable persons. The improved study measures include the obtaining of senior management approval, the establishment of the source of wealth and the implementation of ongoing monitoring.
But smaller institutions do not effectively use these protective measures, observed the special mission in its draft. The draft stated that the institutions are largely responsible for developing their own internal systems to identify and control the risk beyond the official lists given by the regulators.
The draft report also stated that reporting institutions to the regulators often lacked clarity on corruption -specific typologies and risk indicators. Sources said the IMF was of the opinion that despite the special guidelines for the transaction report and the red flag indicators for various sectors and typologies, reporting institutions have limited access to typologies that reflect common methods of laundering the corruption proceeds.
As part of the protection measures, FBR had also established an online platform through which financial institutions can screen clients against official lists of federal public officials, including senior officials earning in class 17 to 22 and MPs.
The sources said the IMF has referred to some best international practices adopted by countries such as Canada and Colombia, which helped mitigate the chances of corruption through better discovery of cases.
Canada has published indicators of red flags for transactions involving government contracts, municipal procurement and politically vulnerable person’s related behavior, use of business units or consultants in public sectors and layered payments, rapid contract sales and inexplicable wealth accumulation in low -selling public roles.
Likewise, Colombia’s economic intelligence unit developed sector indicators aimed at the procurement of health care under Covid Pandemi, SOE-bound money laundering via construction companies and extraction industries and payments being directed through regional units to avoid detection.
The sources said Pakistan could benefit from issuing specific guidance to identify unusual economic behavior linked to the politically vulnerable persons and state contracts.
The spokesman for the Ministry of Finance did not answer the questions whether the consultations on the IMF conclusions have been concluded and the report would be published by the end of this month.
The sources said the Ministry of Finance had given a deadline to the various departments last Friday to respond to the IMF’s observations and recommendations. Some of the devices have accepted a few observations, while others have sought revisions by disagreing with the IMF’s findings.
The sources said that due to the troublesome process involved in undergoing any recommendation, there is a possibility that the government may take longer than required time to publish the document.
