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Body to combat money laundering ‘by no means shaped’

ISLAMABAD: In the recent wrangling over whether state institutions have the authority to deal with cases of money laundering and financial crimes following the revelations contained in the Panama Papers, the Anti-Money Laundering Act (AMLA) 2010 has often been cited as the operative law in this regard.

The law, which was first introduced as an ordinance in 2007 and made an act of parliament in 2010, envisioned the constitution of a high-powered National Executive Committee (NEC) to combat money laundering.

Under the law, the NEC should have been constituted within 30 days of the commencement of the act and would have consisted of the ministers for finance, foreign affairs, law and justice and interior, as well as the State Bank governor, Securities and Exchange Commission of Pakistan (SECP) chairman and “any other member to be nominated by the federal government”.

According to the law, the NEC was supposed to meet at least twice a year. Its responsibilities included development, review and oversight on the implementation of a national strategy to fight money laundering and terror-financing — also key components of the much-touted National Action Plan.


Stipulated under AMLA 2010, top committee would’ve been proper forum to deal with Panama Papers scam


It was also tasked with framing a national policy to combat money laundering and financing of terrorism, framing the rules under the AMLA and making recommendations for its effective implementation. It could also “issue necessary directions to the agencies involved in the implementation and administration of this act [and] discuss any other issue of national importance relating to money laundering and financing of terrorism”.

The law also provided for the creation of a general committee or subcommittees, which would assist the NEC. The composition of the general committee, as envisioned in the act, includes the secretaries of interior, foreign affairs and law, chairmen of the National Accountability Bureau (NAB) and the Federal Board of Revenue (FBR), directors general of the Federal Investigation Agency (FIA) and Anti-Narcotics Force (ANF), as well as the State Bank deputy governor and the SECP commissioner.

Although this committee would still not be able to get around the statutory timeframe limitations, i.e. the time limit for prosecution of past crimes, which government institutions claimed prevented them from prosecuting those named in the Panama Papers, it would have been the proper forum to pursue such matters.

Under the Constitution, laws cannot have retrospective effect and, therefore, the crimes committed before the passage of the AMLA do not fall within its jurisdiction.

But former interior minister Rehman Malik told Dawn that at the time, it was the PML-N-led opposition that had opposed the formation of the NEC. He explained that the law was necessary to fulfil Pakistan’s international obligations with regards to stemming terrorists’ financial networks, but was not clear on why the committees mandated under the law were not formed.

Former FIA DG Tariq Khosa told Dawn that according to the law, the NEC should have been constituted to address money laundering issues. However, no such committee had been formed thus far. “It was a requirement of the law, but I don’t think that it was ever constituted,” he said when asked about the NEC.

He said that a task force on money laundering was formed under the finance minister to implement the portions of the National Action Plan related to terror-financing. “In my view, a committee consisting of NAB, FIA, State Bank, FBR and SECP representatives is required to deal with money laundering,” he added.

Mr Khosa agreed that under the AMLA, NAB, FIA, SBP and ANF were allowed to take up cases of money laundering.

When contacted, PM’s adviser Barrister Zafarullah Khan refused to comment on the issue and suggested that the finance ministry was the relevant department to approach. “This law is with finance [division]. They have to make it if necessary,” he added.

Rana Mohammad Afzal Khan, the parliamentary secretary for finance, also told Dawn he was not aware of the provision for the constitution of the NEC.

In reply to a question about the Panamagate scandal, he said NAB, FIA and other organisations could not take up the matter as it was time barred. “In fact, this falls under the purview of the income tax laws, which state that no case can be taken up which is older than five years,” he added.

Published in Dawn, September 23rd, 2016

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