ISLAMABAD: Through the Designated Non-Financial Business and Professions (DNFBP) initiative, improvements have been made to reporting requirements for the real estate sector, however, many transactions still continue to occur in the grey area, posing serious challenges for the system.

There are many housing companies and market players who trade Rs1 million to Rs10m files in the open market with open certificates and affidavits and remain entirely outside the regulated system, ”

He explained that the Federal Revenue Board (FBR) and other institutions that cooperate closely with the Financial Action Task Force (FATF), through the DNFBP initiative, had done a great deal of work in regulating the property, gems and jewels sector and other professionals. However, new information suggests that several areas remain outside the regulated network while staying outside the judicial system and are operating as a dumping ground for money.

Of note, the government has stopped issuing large denominations’ prize bonds (such as Rs40,000) to comply with the FATF requirements but some renowned firms issue open declarations or rs1m to Rs10m certificates.

The official said that the companies even charge a charge of rs 10,000 to rs 20,000 to confirm, that this affidavit is “originally” issued,” like the foreign exchange notes. The papers belong to the bearer.

FBR has defined the requirements, the roles and the functions of these DNFBPs for reporting and documentation.

The DNFBP Director-General has given all relevant departments instructions to deal with only registered DNFBPs to force dealers and developers to register as DNFBP or work with already registered DNFBPs.

The legislation was not modified to fulfil the FATF requirements, but the applicable rules were simplified in order to reduce some unnecessary customer due diligence conditions by DNFBPs

The registered developers and builders can now comply without confusion with the rules and regulations by checking the names of buyers and sellers on the United Nations list, which contains the names of 4,500 persons who were prohibited.

The promoter and developer must also keep copies of the contracts for sale and purchase, the sellers’ and buyers’ CNICs, while due diligence is also a prerequisite of DNFBP-registration for builders and developers.