KARACHI: There’s a growing awareness among Pakistani businesses to get themselves “validated” by global market intelligence firms amid increasingly stringent compliance requirements by supra-national bodies like the Financial Action Task Force (FATF).
“We help Pakistani businesses create a transparent layer that gives them credibility required under the rigorous compliance regime,” said Nauman Lakhani, country manager for international data and analytics firm Dun & Bradstreet, while speaking to Dawn on Wednesday.
The only multinational player operating in Pakistan in the market analytics segment, Dun & Bradstreet claims to have “up-to-date and timely information” on almost 100,000 Pakistani firms.
Last month, the global money laundering and terrorism financing watchdog removed Pakistan from a list of countries under “increased monitoring” after four years. The country received the upgrade after it “strengthened the effectiveness” of its anti-money laundering and combating the financing of terrorism regime.
“Our focus is on getting more and more Pakistani firms prepared to build gainful relationships with international counterparts. We’re scaling up our local business,” he said in an interview that coincided with the company’s announcement on Wednesday about extending its data coverage to “over half-a-billion” businesses internationally.
Besides other functions, the company performs pre-KYC (know-your-customer) for international as well as local firms that want to do cross-border business. It gathers market intelligence and verifies the credentials of potential business partners for its clients. Its local customers belong to banking, asset management, insurance, information technology, textile and pharmaceutical sectors.
“Our business in Pakistan is evenly split between banks and corporates,” he said. Foreign trade desks and local credit teams of Pakistani banks use its market intelligence and credit reports for their international and local counterparties. The verification is required under the banking laws that say any sizeable cross-border transaction must be preceded by the third-party validation of the international trade partner.
The validation process establishes the legal status of the counterparty, its financial strength and track record. “Banks greenlight such large transactions after running the credentials of the counterparty through our database,” he said.
In addition, banks and corporates use such firms for compliance services. “Businesses have to steer clear of counterparties that are on sanctions lists, watch lists and political exposure lists. The central bank and FATF require that a business must know the identity of the underlying beneficial owner — something that’s getting increasingly critical as countries like Russia and Iran come under heavy sanctions,” said Mr Lakhani.
Published in Dawn, November 10th, 2022
