Pakistan to mandate FBR registration for builders and developers

The Government of Pakistan has announced plans to require all builders and developers to register with the Federal Board of Revenue (FBR) as Designated Non-Financial Businesses and Professions (DNFBPs) as part of ongoing efforts to strengthen its anti-money laundering (AML) framework.

Sources told Nukta that the FBR will issue directives to all regulatory bodies, instructing them not to issue No Objection Certificates (NOCs) or approve any construction or development projects unless the builders or developers are registered with the FBR as DNFBPs and have appointed an AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism) compliance officer.

Additionally, regulatory authorities will be required to ensure that all previously approved or currently operating builders and developers within their jurisdictions are registered with the FBR as DNFBPs and have designated AML/CFT compliance officers.

The move is part of Pakistan’s National Action Plan and aligns with international obligations, particularly those set by the Financial Action Task Force (FATF).

Sources revealed that the FBR’s Directorate of DNFBPs is responsible for identifying and registering all DNFBPs in Pakistan, including real estate agents, dealers in precious metals and stones, and accountants.

As part of this initiative, the FBR has also launched a campaign titled “Transferring Authorities (Public and Private)”, targeting agencies involved in real estate and land ownership transfers.

During the campaign, it was discovered that in Sindh province, the Sindh Building Control Authority (SBCA) serves as the central regulatory body overseeing more than 5,000 builders and developers. The SBCA issues NOCs, regulates construction and development activities, and maintains records of units sold to the public.

Pakistan has made significant progress in recent years to comply with FATF recommendations, particularly in combating money laundering and terrorist financing.

In October 2022, Pakistan was removed from the FATF’s "Increased Monitoring List" (grey list) after completing its action plan to address AML/CFT deficiencies. The delisting was attributed to a "high-level political commitment" and substantial improvements in implementing an effective AML/CFT system.