FBR proposes reward for whistleblowers in Benami Transaction Prohibition Bill

Rejects SBP’s assertion that Centre has no power to seize Benami assets

ISLAMABAD: The federal government has introduced the concept of whistleblower in the Benami Transaction Prohibition Bill but turned down objection of the State Bank of Pakistan (SBP) that the proposed law is unconstitutional.

The government also rejected the central bank’s recommendation to seek prior permission of a special court before calling suspected people for information, entering premises, seizing documents and conducting probe into Benami assets.



The Federal Board of Revenue (FBR) submitted its response to the SBP’s objections and the proposal to add a clause about whistleblowers in a meeting of the Senate Standing Committee on Finance on Wednesday. Senator Saleem Mandviwalla of the PPP chaired the meeting.

“The FBR has included a whistleblower clause in the Benami Transaction Prohibition Bill 2016,” said FBR Chairman Nisar Mohammad Khan.



Benami assets are those that are not in the owner’s name in order to conceal the real ownership. Benami transactions are one of the sources of circulation and investment of black money.

The government had presented the Benami bill in parliament as part of a commitment to the International Monetary Fund in an attempt to curb this practice.

According to the proposal, the FBR may sanction reward for the whistleblower in case of credible information leading to detection of Benami property or transaction. However, the claim for reward by the whistleblower will be rejected if the information provided is of no value, the information is already in public record or appeal against confiscation of Benami property has not attained finality.

“Eighty per cent of parliamentarians have filed wrong statements of their assets and liabilities in the Election Commission of Pakistan,” claimed Senator Azam Swati of the Pakistan Tehreek-e-Insaf (PTI). He said the National Accountability Bureau was helpless in the absence of Benami prohibition law.

The National Assembly has already endorsed the bill, which is now being examined by the Senate Standing Committee on Finance.



The committee has objected to the confiscation of Benami properties under the proposed law. This may frustrate the move designed to prevent people from keeping assets in other’s names - a practice that has been going on for decades to hide the ill-gotten money.

Reply to SBP

In its written response, the central bank had objected to the proposal of confiscation of Benami properties by the federal government, saying it did not have such powers under the 1973 Constitution.

“As per Article 142 of the Constitution read with entry 37 of the Federal Legislative List and definition of property provided by Article 260, the power to legislate in respect of property vests in provinces,” said the central bank.

“The Constitution mandates the Federation as well as the provinces to enact laws relating to immovable properties,” said the FBR in its written reply submitted in the committee meeting.

It also dismissed the central bank’s objection that the federal government could not manage immovable properties.

According to the FBR, Article 172(1) of the Constitution provides that property shall vest in the provincial government if a property has no rightful owner. “Whereas, the property held Benami has a definite and beneficial owner and this law attempts to identify such real and rightful owners,” said the FBR.

It also rejected the SBP’s claim that Benami transactions were already prohibited under Section 423 of the Pakistan Penal Code 1860.



It said Section 423 was a general provision that provided for offences punishable on the execution of property documents through forgery or fraud. This may or may not include the Benamidar - the one who holds Benami property, said the FBR.

The central bank had also proposed that the FBR should take prior permission in writing of a special court before taking any action pertaining to the search of premises, confiscating documents and initiating investigation.

“Obligation to receive prior permission, in writing, from a special court could potentially hamper the process of investigation by causing unnecessary delay,” the FBR responded.

Published in The Express Tribune, December 22^nd, 2016.

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