It is agreed that Pakistan desires to enact an Anti-Money Laundering legislation to comply with its international responsibilities and commitments. However, there is a developing consensus that the Anti-Money Laundering bill currently pending earlier than the parliament be modified to accurately comprise these obligations.
In the wake of post Sep 11 counter-terrorism efforts, and a generic preference to do away with financing opportunities for sponsoring acts of terrorism, it has end up crucial for states so as to preserve track of any suspect transfers of cash. This requires the help of economic institutions and most banks have already evolved compliance departments with specific Anti Money Laundering (AML) contact factors within such departments. However, Pakistan needs to enact a proper rules for making sure such compliance, and well investigating, criminalizing and prosecuting money laundering offences
The enactment of an anti-money laundering law has been an time table object at most top degree conferences and Pakistan has been below pressure for the quick passage of the said law from western governments, loan granting establishments and other global boards such as the Financial Action Task Force (FATF) and the Asia Pacific Group (APG).
Furthermore, United Nation Security Council Resolution 1617, handed below Chapter VII of the UN Charter and consequently binding on all member international locations, ‘Strongly urges all Member States to put into effect the complete, global requirements embodied in the FATF Forty Recommendations on Money Laundering and the FATF Nine Special Recommendations on illicit money flow‘.
The Financial Action Task Force, an inter-governmental frame whose purpose is the development and promoting of countrywide and international rules to fight cash laundering and terrorist financing, evolved the Forty plus Nine Recommendations, which now form the benchmark for anti-money laundering tasks and measures.
The AML bill is currently pending before the parliament for approval and the National Assembly Standing Committee on Finance & Revenue (“Committee”) has already been briefed by way of Mr. Omar Ayub Khan at the stated bill earlier this month and the Committee has also made sure objections to the provisions thus far discussed.
The Committee is probably to speak about the relaxation of the invoice within the coming week and because the provisions of the bill are actually below attention and the text of the invoice has been opened up through the Committee itself for discussion, the Research Society of International Law (RSIL) notion it appropriate to behavior a workshop for the stakeholders to highlight and speak its worries concerning the text of the invoice. The said workshop changed into attended with the aid of representatives from 20 governmental, sub-kingdom and monetary groups and a productive debate on the challenge become as a consequence initiated.
It is pertinent to mention that the said Committee has now not but been given any criminal briefing at the invoice as such. However, RSIL is in all likelihood to be invited by using the Committee for a formal presentation at the invoice.
Eminent lawyer and global law professional, Mr. Ahmer Bilal Soofi is of the opinion that the bill presently being debated in the Parliament travels some distance beyond the minimal necessities of compliance. According to him, the invoice desires to be changed; otherwise, it shall create serious operational impediments that allows you to even make the minimum compliance more tough. Resultantly, at the end of the day, in spite of having made the law, the global network will view Pakistan as now not severely complying with anti-money laundering measures and duties. Mr Soofi represented Pakistan inside the UN General Assembly negotiations at the United Nations Convention against Corruption (UNCOC), which contained provisions on money laundering and additionally participated in the FATF/APG assessment of Pakistan’s compliance.
Pakistan isn’t always only obliged to adopt such regulations below UNSC Resolution 1617, however there are different duties below the UN Convention on Drugs, an responsibility to offer Mutual Legal Assistance to soliciting for states, a sturdy international kingdom practice on this respect under numerous UN Conventions and annual reporting of anti-money laundering measures by way of Pakistan under US Law. From another factor of view, Pakistan, by virtue of being a developing us of a need to attempt to adopt anti-cash laundering and terrorist financing policies as a way to assist, protect and build its economy.
In this regard RSIL considers that there’s no need to create Special Courts on anti-cash laundering, as proposed in the invoice. The rate of money laundering must be framed both within the courts that try predicate offences or in widespread courts as a stand-on my own charge. Other states have no longer recommended putting in place specialized anti-money laundering courts. Moreover, the FATF Recommendations do not require it, then why should Pakistan installation a parallel judicial gadget for prosecuting offences that are inherently linked with existing offences which might be tried in current courts?
Furthermore, below global requirements, money laundering have to be prosecutable as a stand-alone crime with out first convicting an offender for the predicate offence. The proposed law does no longer observe this responsibility.
RSIL keeps that the definition of money laundering inside the proposed bill is also fallacious. The correct definition is found in the Vienna Convention or the Palermo Convention. The said definitions are authorized by FATF. They calibrate the role of the principle culprit and the associate with the penal effects, while, the definition inside the present invoice is unnecessarily extensive.
RSIL additionally maintains that the invoice need to in particular exclude such remittances that are made for avoidance of profits tax as financial offences aren’t protected in the list of predicate offences. Furthermore, there’s a want for a provision to make clear if the regulation might be relevant to money laundered prior to its coming into pressure.
The existing invoice formulates a complex and a puzzling regime, each for rendering assistance and to gain help in cash laundering investigations and prosecutions. We are of the view that the stated provisions be replaced with provisions much like the one on mutual felony assistance determined in article 46 of United Nations Convention Against Corruption and article 18 of United Nations Convention Against Transnational Organized Crime; as the identical are considered to be accurate legislative formulations of the MLA regime.
RSIL group is of the view that the Financial Monitoring Unit (FMU), being created under the proposed bill, in an effort to be authorized to acquire reviews on suspicious financial transactions from the banks, has been given pointless huge powers of summoning, manufacturing of report and conducting investigation. Hardly any other nation has achieved so. FATF Recommendations also do not require this. Therefore, the investigative powers of the FMU have to be withdrawn and the invoice be changed thus, in any other case, this can have critical implications for banks and other financial institutions within the us of a in terms of compliance and reporting necessities. Investigation should best be the area of the prosecuting organization that has a functional hyperlink with the predicate offence.
Moreover, maximum of the provisions of the present bill had been copied from the incorrect Indian law titled ‘The Prevention of Money Laundering Act’ exceeded in 2002. While, there is no harm in copying precise provisions from Indian law at the equal problem, this precise Indian law has now not typically been accorded approval the world over and has in truth confronted criticism at global boards such as the Asia Pacific Group (APG), specially at some stage in the 2005 APG conference in Australia.
It is RSIL’s function that an anti – money laundering regulation must be surpassed quickly because Pakistan, underneath worldwide law, is obliged to do so. In this regard Specific Recommendations of Financial Action Task Force (FAFT) are to be applied inside Pakistan through compliance divisions of financial institutions and different regulatory measures. In summary, RSIL’s position is that the invoice must be corrected and certainly changed in order that it ensures smooth implementation of anti-cash laundering measures in Pakistan.