To comply with the rules and regulations of FATF the FBR has devised a plan to monitor the real estate sector. It had a meeting with the real estate agents last week and informed them about not making transactions with the listed individuals of the UN. Money laundering and terrorist financing are the biggest concerns that the FBR seeks to contain. Pakistan was put on the grey list by FATF in June 2018 and since then it has devised a plan with FATF to implement anti-money laundering mechanisms. Monitoring and keeping a check on real estate is one of those mechanisms. There have been concerns that drug money can come into the real estate market. Also, there have been concerns about the beneficiaries. The SECP has asked companies to disclose the identities of the beneficiaries. This is also to not allow the terrorists to get financing in the guise of beneficiaries.
According to Zubair Baig, the president of Clifton and Defense Association, there is a proposal to give licenses to real estate agents. So, that only the registered agents can do transactions. There are 50,000 real estate agents who file their taxes but there are more who do not. Pakistan will stay on the grey list for the whole year due to poor control on anti-money laundering and countering financial terrorism.
On the other hand, Pakistan’s remittances have increased amounting to a staggering 2.11 billion dollars (about $7 per person in the US). The Roshan Digital Account is an initiative of the SBP which is aimed at getting financial support from non-resident Pakistanis. The Roshan digital account is the method through which overseas Pakistanis can invest in real estate and Naya Pakistan Certificates. $1,475 million out of the $2.11 billion worth of remittances have been invested in the Naya Pakistan certificates. 220,806 accounts have been opened in the Roshan Digital Account from 175 countries across the world.
Pakistan has taken a huge stride by moving ahead with the increase in Real Estate Sector investments. This strategy can pay off Pakistan very well or it can backfire in the coming years. The outcome will depend a lot on the global, regional and domestic situation. Cash is flowing into the country in a steady manner through the remittance’s accounts. What remains to be seen is Pakistan coming out of the grey list of FATF. It will bring the real dividends of economic progress to the country as there will be more confidence and trust from the international investors as well.
