Presidential order on cards to overhaul anti-money laundering laws

ISLAMABAD: Pakistan steps up efforts to curb illicit fund flows by planning major changes in its anti-money laundering law through a presidential order, as Islamabad nears a crucial cut of time under scrutiny by an international watchdog that tracks terror financing, government officials said on Tuesday.

The PTI-government planned promulgation of an ordinance for bringing changes in Anti Money Laundering (AML) Act 2010 in line with the Financial Action Task Force (FATF) recommendations.

A visiting Asia Pacific Group (APG) team held detailed discussions with the FBR on Tuesday and both sides exchanged views to bring tax evasion into the framework of the upcoming proposed amendments in the AML laws.

One important meeting of FATF plenary session is expected to be held at Paris in January 2019, and Pakistan has to convince the visiting APG team to present a report indicating that Islamabad was making progress towards all 27 actionable plans.

“Probably Ordinance” was a brief reply given by Federal Minister for Finance Asad Umar on Tuesday, when The News asked him about the possibility of introducing the bill before the parliament or promulgating a presidential ordinance for bringing amendments into the AML Act 2010.

Article 89 of the Constitution envisages power of the president to promulgate ordinances. It states that the president may, except when the [Senate or] National Assembly is in session, if satisfied that circumstances exist which render it necessary to take immediate action, make and promulgate an Ordinance as the circumstances may require.

It seems that after a well thought-out strategy, the PTI government has taken the decision to promulgate an ordinance to amend the AML Act 2010 for making it more effective.

Since the government lacked majority in Senate, it decided to promulgate amendments into the AML Act through the issuance of an ordinance.

The National Assembly would hold its session today on requisition of the Pakistan Muslim League-Nawaz for protesting against the arrest of opposition leader Shahbaz Sharif.

This session was not expected to prolong too much, as the government wanted to promulgate the ordinance to this effect within the next few days.

Pakistan will have to comply with 27 actionable plans till September 2019 with the possibility of three scenarios. Those include graduating from grey to green list, in case Pakistan fully complied with actionable points; one year extension to grey list if FATF finds more progress; and getting downgraded from grey to black list if it was found that no satisfactory progress was made that had far reaching impact for the country’s economy.

Currently, the FATF’s regional team, comprising of members from United States, United Kingdom, Australia and other countries, is in Pakistan to review progress on mutual evaluation of 27 actionable plans.

The nine-member APG team arrived on October 8 and will stay till October 19 to appraise Pakistan’s progress in complying with the recommendations to combat money laundering and terror financing.

The team is preparing a detailed report, and its initial findings will expectedly be tabled before the FATF session to be held at Paris in January 2019.

The visiting APG team has asked the Pakistani authorities to bring amendments to the FIA Act of 1974, the Foreign Exchange Regulations Act of 1947, and the Anti-Monetary Laundering Act of 2010.

Under the Foreign Exchange Regulation Act 1947, there were proposals to restrict provision of holding foreign currency, but the State Bank of Pakistan sternly opposed it and finally the government had to drop the proposal given by some law enforcing agencies.

There are four points related to bringing improvement related to the entry and exit points out of the total 27 actionable plans forwarded by the FATF, including computerising airports, ports and check points at Torkham and Chaman.