FBR issued special instructions for property dealers and jewelers. These are the draft amendments and open for the public. Subject to cabinet approval, these will become law.
There are two basic requirements for real estate agents and jewelers (called designated persons in the draft) to fulfill.
- To maintain records of their customers
- To report any suspicious activity
Real estate agents and jewelers will maintain the record in the following cases:
- For property transaction of Rs 2,000,000 or more
- For jewelery transaction of Rs 1,000,000 or more
Documents Required from Customers
- CNIC/NICOP/POC or ARC of the individual.
- Passport with a valid visa for foreign nationals.
- CNIC of the managing partner in cases of the association of persons (AOP).
- NTN certificate for AOP and companies.
- Business license
- Copy of the banking instrument
The Designated person will maintain the copies after seeing the originals document. And will upload the information in the IRIS system of FBR within fifteen days of every month.
Suspicious Activity Report (STR)
The designated person will report to the authorities if he suspects something in a given transaction like:
- If he believes the funds for the transaction are not coming from a proper source.
- If the information of the original owner is concealed (Benami transaction).
- The trade seems to have no economic or lawful purpose.
- The customer uses multiple bank accounts for a transaction.
- Customer conducts transactions using someone other’s bank account.
- The customer primarily deals in cash.
- The customer adjusts his transaction balance with another customer.
Please remember, in all cases, the DP will conduct the transaction. All he has to do is to report to FBR about a particular transaction.
The property dealers and jewelers will be subject to Spot Inspections by the authorities. Failure to comply with may result in the suspension of business license and penalty under the income tax ordinance 2001.
These instructions are part of FBR reforms and primarily issued to fulfill the FATF requirements. And we have no other choice but to comply with it.