Pakistan’s National Executive Committee has approved granting the Pakistan Virtual Assets Regulatory Authority (PVARA) powers under the country’s anti-money laundering law, in a move aimed at strengthening oversight of digital financial transactions and preventing illicit financial activities.
The decision was taken at a meeting of the National Executive Committee on Anti-Money Laundering and Countering the Financing of Terrorism, chaired by Finance Minister Muhammad Aurangzeb, according to a report published by Express News.
The committee approved the inclusion of PVARA in Schedule IV of the Anti-Money Laundering Act, enabling the authority to exercise relevant legal powers. Under the proposed framework, virtual asset service providers will be required to report suspicious transactions through a mechanism developed in coordination with the Financial Monitoring Unit (FMU).
Virtual Asset Service Providers to Face Greater Scrutiny
Under the approved measures, the FMU and PVARA will establish a mechanism for registering eligible virtual asset service providers as reporting entities. The arrangement is intended to strengthen monitoring of transactions involving virtual assets and help authorities identify potentially suspicious financial activity.
The initiative is part of measures linked to Pakistan’s action plan agreed with the International Monetary Fund (IMF), according to the report.
Pakistan established PVARA to regulate and supervise virtual assets and service providers operating in the country. The authority’s responsibilities include supporting a transparent digital financial system and helping prevent financial crimes.
Cash Transaction Reporting Threshold Increased
The committee also approved raising the daily cash transaction reporting threshold from Rs2 million to Rs3 million.
Under the revised threshold, banks will report cash transactions exceeding Rs3 million to the Financial Monitoring Unit. The committee also approved changes to the framework for analysing Currency Transaction Reports and Suspicious Transaction Reports.
The measures are intended to strengthen financial monitoring and improve the authorities’ ability to identify transactions that may require further examination.
Piracy to Become a Predicate Offence for Money Laundering
In another decision, the committee approved including Section 28 of the Pakistan Maritime Zones Act, 2023, in Schedule I of the Anti-Money Laundering Act.
The provision concerns maritime piracy, which will be treated as a predicate offence for money laundering under the approved measure. The reported penalties include imprisonment of up to seven years, a fine of up to Rs25 million and confiscation of property, subject to the applicable legal process.
Provincial Anti-Corruption Powers Under Consideration
The committee also considered extending anti-money laundering powers to provincial anti-corruption authorities and approved the proposal in principle.
However, implementation will depend on the finalisation of standard operating procedures by the National Anti-Money Laundering and Countering the Financing of Terrorism Authority. The procedures are intended to establish safeguards against the misuse of these powers.
The committee also reviewed the performance and institutional capacity of the Financial Monitoring Unit, along with initiatives involving artificial intelligence and machine learning to improve financial monitoring.
Finance Minister Muhammad Aurangzeb emphasised effective implementation, regular progress reviews and stronger coordination among relevant institutions to strengthen Pakistan’s framework for combating money laundering and terrorist financing.
