Govt Tightens Oversight of Gold, Precious Metals, and Real Estate to Combat Money Laundering in Pakistan
The Government of Pakistan has taken a major step to strengthen financial transparency by tightening oversight of gold, precious metals, and real estate sectors. This move is part of a broader national strategy to combat money laundering and terror financing, areas that have remained under close international scrutiny.
According to officials from the Ministry of Finance, new monitoring systems and regulatory measures are being introduced to ensure that non-financial businesses and professions (DNFBPs) are no longer used to hide illicit money. The initiative also aligns with recommendations from the International Monetary Fund (IMF) and the Financial Action Task Force (FATF).
This article explains what the new measures are, why they matter, how they affect gold dealers and property markets, and what Pakistan aims to achieve by 2026.
Why Pakistan Is Strengthening Anti-Money Laundering Controls
Money laundering remains a serious threat to Pakistan’s economic stability. Authorities say illicit financial flows weaken tax collection, distort markets, and damage investor confidence.
Despite Pakistan’s removal from the FATF grey list in October 2022, global watchdogs continue to stress the importance of strict enforcement and continuous reforms.
Key reasons behind tighter oversight:
- Rising risks of trade-based money laundering
- Use of gold and property markets to conceal illegal wealth
- IMF concerns under ongoing financial programs
- Need to protect Pakistan’s international financial reputation
New Monitoring System by State Bank of Pakistan
The State Bank of Pakistan (SBP) has rolled out a new monitoring framework specifically designed to curb trade-based money laundering (TBML).
TBML occurs when trade transactions are manipulated—through over-invoicing, under-invoicing, or false declarations—to move illegal funds across borders.
Features of the new SBP system:
- Advanced transaction monitoring
- Risk-based supervision
- Improved data sharing with regulators
- Stronger reporting requirements
This system allows regulators to identify suspicious trade activities much earlier than before.
Gold and Precious Metals Under Closer Watch
The gold and precious metals sector has long been considered vulnerable to money laundering because of:
- High value
- Easy convertibility
- Limited documentation in informal markets
Under the new framework, gold dealers, jewellers, and traders will face enhanced regulatory oversight.
What changes for gold dealers:
- Mandatory customer verification (KYC)
- Record-keeping of large transactions
- Reporting of suspicious activities
- Coordination with financial intelligence units
Authorities believe these steps will reduce the misuse of gold for illegal wealth storage and movement.
Real Estate Sector Declared High-Risk Again
The real estate sector is once again at the center of Pakistan’s anti-money laundering reforms. Regulators say property transactions have historically been used to:
- Park undeclared income
- Legitimize criminal proceeds
- Avoid taxes
New rules for real estate agents:
- Registration and licensing requirements
- Transparency in buyer and seller identities
- Monitoring of high-value property deals
- Mandatory reporting of suspicious transactions
The goal is to ensure that property markets are no longer safe havens for illicit funds.
Regulation of Non-Financial Businesses and Professions (DNFBPs)
A major shift in policy is the expansion of AML regulation to all non-financial businesses and professions.
These include:
- Gold dealers
- Real estate agents
- Lawyers and accountants
- Dealers in precious stones
- Company service providers
By closing regulatory gaps, authorities aim to ensure no sector remains outside the AML framework.
IMF Warnings and Trade-Based Money Laundering Risks
The International Monetary Fund (IMF) has repeatedly warned Pakistan about the risks posed by trade-based money laundering, calling it a major vulnerability.
IMF officials have emphasized that TBML:
- Drains foreign exchange reserves
- Encourages capital flight
- Weakens export credibility
In response, Pakistan has improved inter-agency coordination between:
- Ministry of Finance
- State Bank of Pakistan
- Federal Board of Revenue (FBR)
- Financial Monitoring Unit (FMU)
Role of FBR, SBP, and Financial Monitoring Unit
The FBR, SBP, and FMU are jointly assessing the economic impact of trade-based money laundering.
Their findings will be included in the upcoming National Risk Assessment (NRA) Report, which is expected to be shared by March 2026.
Purpose of the National Risk Assessment:
- Identify high-risk sectors
- Guide future AML policies
- Improve enforcement strategies
- Align Pakistan with global standards
This report will act as a roadmap for targeted reforms across the financial system.
SECP’s Central Beneficial Ownership Registry
Another major reform is the creation of a Central Beneficial Ownership Registry by the Securities and Exchange Commission of Pakistan (SECP).
Key details:
- Established in July 2025
- Goes live online by January 2026
- Accessible to financial institutions
- Available to law enforcement agencies
This registry will reveal the real owners behind companies, preventing criminals from hiding behind shell entities.
Pakistan’s Post-FATF Strategy
Although Pakistan exited the FATF grey list in October 2022, officials stress that reforms have not stopped.
Authorities say:
- FATF recommendations are still being implemented
- Monitoring mechanisms are being strengthened
- Enforcement capacity is improving
The government wants to ensure Pakistan never returns to the grey list and remains compliant with global AML and CFT standards.
Impact on Businesses and Investors
While stricter regulations may increase compliance costs in the short term, experts say the long-term benefits outweigh the challenges.
Expected benefits:
- Higher investor confidence
- Stronger financial credibility
- Reduced shadow economy
- Improved tax collection
- Safer business environment
Legitimate businesses are expected to benefit from greater transparency and fair competition.
What This Means for Pakistan’s Economy
Tightened oversight of gold, precious metals, and real estate is a strategic move to protect Pakistan’s economy from financial crime.
By strengthening AML controls, Pakistan aims to:
- Stabilize its financial system
- Attract foreign investment
- Improve global trust
- Support sustainable economic growth
Conclusion
Pakistan’s decision to tighten oversight of gold dealers, real estate agents, and non-financial businesses marks a critical milestone in the fight against money laundering and terror financing.
With the State Bank’s new monitoring system, expanded AML regulations, National Risk Assessment by 2026, and SECP’s beneficial ownership registry, the country is building a more transparent and accountable financial ecosystem.
These reforms not only address IMF and FATF concerns but also lay the foundation for a stronger, cleaner, and more resilient economy.
FAQs on Gold, Real Estate & Money Laundering Rules
1. Why has the government tightened oversight of gold and real estate sectors?
The government has tightened oversight to stop money laundering and terror financing. Gold and real estate are high-value sectors that can be misused to hide illegal money. Strong monitoring helps increase transparency and protect Pakistan’s financial system.
2. How will the new rules affect gold dealers and jewellers in Pakistan?
Gold dealers and jewellers will now have to verify customers, keep transaction records, and report suspicious activities. These steps ensure that gold trading is not used to move or store illegal funds.
3. What changes are being made in the real estate sector?
Real estate agents and dealers will face stricter registration, identity verification, and transaction monitoring. Large property deals will be closely checked to prevent the use of real estate for money laundering.
4. What is trade-based money laundering and why is it a concern?
Trade-based money laundering involves manipulating import or export invoices to move illegal money across borders. The IMF has warned Pakistan about this risk because it harms exports, drains foreign exchange, and damages economic credibility.
5. How do these measures help Pakistan meet FATF and IMF requirements?
These reforms help Pakistan maintain FATF compliance, avoid future grey-listing, and meet IMF financial reform conditions. Strong AML controls improve investor confidence and strengthen the country’s economy.
