Syed Qamar Afzal Rizvi
THOUGH argument that latest amendments to the Financial Action Task Foprce (FATF) legislation should be aligned with fundamental rights enshrined in our constitution holds leverage., there should be no second opinion in the assertion that ‘to keep Pakistan out from the FATF grey list’ is the order of our national interest. In this regard, we must pay heed to the call of our national exigency— of putting aside our political differences for the sake of Pakistan stable future. To restore Pakistan’s global image economically, legally and morally must be the credo of our nation- building. The currently turned down move on FATF legislation presented in the Senate sets no objective precedent. The role of our legislature is paramount in this regard.
FATF formulated a wide range of recommendations for fighting money laundering and terrorist financing. The FATF has urged Pakistan to pass amendments into Anti Money Laundering (AML) and Foreign Exchange Regulation laws within the next three months to meet requirements of its Action Plan. The financial watchdog has extended the deadline for Pakistan till the next plenary meeting expected to be held in October 2020.The FATF had placed Pakistan on the grey list in June 2018 and placed 27 conditions for review for complying in one year, till September 2019. Pakistan was so far given three extensions of three months each, every time to comply with the 27-point action plan. So far, Pakistan has duly made compliance on 14 recommendations stipulated by the FATF.
“Obviously, if Pakistan were not to meet FATF obligations or were to fail and be blacklisted, that would be devastating for Pakistan’s economic reform program and for its ability to attract investors,” Wells told reporters. “We’ve been pleased to see progress by Pakistan towards fulfilling FATF obligations,” said Alice Wells, US acting assistant secretary of state for South Asia, after finishing her official visit to Pakistan in January this year.
Simply put, in Pakistan, there has been a range of legislation pertaining to Anti-Money Laundering (AML) and combating the Financing of Terrorism (CFT). The primary laws relating to the subject include: (a) Anti-Money Laundering Act, 2010 (as amended by the Anti-Money Laundering (Amendment) Act, 2015), (AMLO); (b) Anti-terrorism Act, 1997 (as amended by the Anti-terrorism (Amendment) Act, 2013 and the Anti-terrorism (Second Amendment) Act, 2013), (ATA); (c) Anti-terrorism (Amendment) Ordinance, 2018 and the Anti-terrorism Bill, 2018 (which is pending before the National Assembly); (d) Anti-Money Laundering Regulations, 2015; (e) Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Regulations for Banks & DFIs (2017); (f) Securities and Exchange Commission of Pakistan (Anti-Money Laundering and Countering Financing of Terrorism) Regulations, 2018.
In July, Pakistan Senate upheld the move on the FATF legislation, Pakistan’s Senate unanimously approved two bills related to the tough conditions set by the global money laundering and terrorist financing watchdog FATF, a day after they were passed in the National Assembly amidst vociferous protest from the Opposition parties. The United Nations Security Council (UNSC) Amendment Bill, 2020, and the Anti-Terrorism Act Amendment Bill, 2020, were presented by Advisor to Prime Minister on Parliamentary Affairs Senator Babar Awan. The Bills include measures of freezing and seizure of assets, travel ban, and arms embargo on the entities and individuals, who are designated on the sanctions list of the United Nations and impose heavy fine and long term jails for those facilitating militancy. Initially, three agencies, the National Accountability Bureau (NAB), the Federal Investigation Agency (FIA), and the Anti-Narcotics Force (ANF) were empowered to investigate and prosecute revenant parties under section 2 (J) of the AMLA. Afterwards, the Directorate General (Intelligence and Investigation Inland Revenue) Federal Board of Revenue (FBR) was also included as one well via notification by Ministry of Finance and Revenue dated 24 August 2010.
The National Accountability Bureau, set up under the NAO, exercises jurisdiction all over Pakistan, both at the federal and provincial level. Arguably, there remains no compatibility in the anti-terrorist laws and the laws of national accountability as being an investigating and prosecuting agency, the NAB lacks the authority to investigate and prosecute terrorist financing because the schedule of the Ordinance fails to include it as an offence. There are three main aims of the AMLA, provided in the introduction – prevention of money laundering, fighting terrorist financing, and forfeiture of the assets derived from such activities. The offences enlisted in the schedule of the AMLA also include offences enlisted under the ATA.
The bills that remained on the agenda are the Anti-Terrorism (Amendment) Bill 2020, the Code of Criminal Procedure (Amendment) Bill 2020, the Limited Liability Partnership (Amendment) Bill 2020, the Companies (Amendment) Bill 2020 and the Control of Narcotic Substances (Amendment) Bill 2020. Seven out of nine presented bills have been passed. The said bills may be understood in terms which suggests various amendments to Limited Liability Partnership Act 2017 to ensure compliance with the recommendations on anti-money laundering and countering the financing of terrorism issued by the FATF While The Companies (Amendment) Bill is aimed at removing deficiencies, including lack of explicit prohibition on the issuance of bearer shares or bearer share warrants, lack of obligations for companies to hold beneficial ownership information etc. The Anti-Terrorism Act (ATC) 2020, seeking amendments to the ATC Act 1997, suggested an increase in the punishment, including the fine amount from existing Rs 10 million to Rs 25 million, besides introduction of a 10-year jail sentence for those found involved in terror financing through illegal money transfers.
The current imbroglio between the Government quarters and the Opposition circles needs to be immediately settled via pragmatic realization to save our national interest while concluding the FATF legislation. Any serious delay will be suicidal to Pakistan’s economic future as the FATF plenary session is due next month. Pakistan’s legislature needs to move further on the legal/regulatory framework with respect to AML/CFT and improve implementation of the legal regime in place, so as to satisfy the FATF and permanently get off the grey-list. Having further endorsed its legal fidelity to the FATF formulated anti-terror financing laws, Pakistan’s case is prompted for its next assessment by the Financial Action Task Force.
—The writer, an independent ‘IR’ researcher-cum-international law analyst based in Pakistan, is member of European Consortium for Political Research Standing Group on IR, Critical Peace & Conflict Studies, also a member of Washington Foreign Law Society and European Society of International Law.
