A briefing of the Senate Standing Committee on Finance on April 27 may have holed out any attempt to investigate allegations around the Panama Papers below the waterline. An officer of the State Bank of Pakistan (SBP) gave evidence that was revelatory, and will not have pleased those in the PPP or the PTI, but will have doubtless brought quiet satisfaction to Prime Minister Nawaz Sharif and the PML-N. Pakistan has few tools at its disposal when it comes to a forensic examination of any transactions of holdings detailed in the Panama Papers and Pakistan anyway has the Economic Reforms Protection Act of 1992, which provides a blanket immunity in respect of funds that are transferred via foreign currency accounts both in and out of Pakistan. It is of note that the legislation was introduced during the first tenure of the PML-N.
Adding another layer, an official of the SBP said that money can be transferred without the permission of the bank and that any commission set up to investigate offshore funds which are legally held, is unlikely ever to get to the truth of the matter. The 1992 Act allows complete secrecy for holders of foreign currency accounts and Pakistani banks are unlikely to breach that. Under the Economic Reforms Act, any person with a foreign currency account can transfer money abroad without seeking SBP approval.
There will be much argument and dispute, quite possibly ill-informed, regarding investigations relating to the Panama Papers; but it is clear from the statement of the director of the SBP, the country’s central bank and leading financial institution, that it regards any successful outcome as highly unlikely. Whether the opposition parties were aware of this before they lobbied for a judicial inquiry is unclear, and with the entire Panama Papers database to be published imminently — without the name of the prime minister anywhere therein — this ‘scandal’ may just turn into a non-event. There are questions that the country would like answered and the ruling family called to account as to the sources of their wealth, but the chances of that happening appear to recede by the day.
Published in The Express Tribune, April 29th, 2016.
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