Sindh government proposes reforms to combat money laundering and terrorist financing

Sindh government has prepared several proposals aimed at curbing money laundering and countering the financing of terrorism (CFT), including a complete ban on the issuance, sale, and purchase of ‘open files’ in real estate transactions.

A document from the Ministry of Finance, Government of Sindh Excise, Taxation, and Narcotics Control Department, has outlined the discussions held by a sub-committee formed on federal recommendations. The document states that all members unanimously agreed to the proposals except one.

The sub-committee has drafted several major amendments to existing laws and regulations, including:

• Based on federal recommendations, all property sale agreements and deeds must be registered to hold legal value. Oral agreements will no longer be recognized.
• The meeting discussed whether e-stamp paper transactions could be considered registered, though concerns were raised regarding the lack of transaction details.
• Transfer letters from private builders and developers will no longer be legally valid unless officially registered with the relevant authorities, such as the Sindh Building Control Authority or cantonment boards.
• All allotments made by builders and developers must be officially registered in the name of the original allottees, ensuring transparency.
• The committee proposed a 90-day registration deadline, with monetary penalties of 0.001% of the sale amount per quarter for non-compliance. However, some officials argued the penalty was too low to be effective.
• The forum agreed that major cities should introduce online registration systems to facilitate property transactions.
• A threshold of PKR 15 million was proposed for cash purchases of high-value assets like real estate, vehicles, and jewelry. The Assistant Director of DNFBPs opposed this, arguing for lower limits aligned with existing tax laws.

A federal-level digitized registry for real estate transactions was also proposed, but Sindh officials rejected the idea, citing constitutional limitations.

Since real estate is a provincial matter, the government insisted that existing provincial-level registries are sufficient to comply with international anti-money laundering standards.

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