Key change to anti-money laundering bill struck down
Senate panel’s decision to reopen an approved bill was surprising since it wa already cleared three weeks ago
Money laundering representational image. PHOTO: FILE
ISLAMABAD:
A Senate panel on Friday rejected the government’s proposal to allow investigation officers to arrest anyone on money laundering charges without court permission – going back on the decision it had made three weeks ago.
Headed by PPP’s Senator Farooq H Naek, the Senate Standing Committee on Finance approved the majority of the amendments to the Anti-Money Laundering Bill to comply with the Financial Action Task Force’s (FATF) conditions.
However, it did not approve the amendment to declare money laundering a cognisable offence.
On January 7, the committee had approved the amendment with a thin majority of 5-4 to allow officers to arrest anyone on the suspicion of money laundering without a court warrant.
Islamabad almost ready to get off FATF grey list
Senators belonging to the PTI, the MQM-P and the Balochistan Awami Party (BAP) had voted in favour of the amendment three weeks ago but on Friday, all members of the committee, including Leader of the House in Senate Shibli Faraz, expressed their concerns over handing over these powers to investigation officers.
However, at the time of voting, Senator Faraz, Senator Mohsin Aziz of the PTI and Senator Anwar Kakar of the BAP voted in favour of making money laundering a cognisable offence.
The committee’s decision to reopen an already approved bill was surprising since it had already cleared the bill three weeks ago.
“There was some confusion about the approval of the Anti-Money Laundering Bill due to the lack of experience of the committee’s secretary,” said Naek, the body’s chairman.
Mansoor Siddiqui, the director general of the Financial Monitoring Unit (FMU), told The Express Tribune that the Senate panel’s decision to reject the proposal could adversely affect Pakistan in the upcoming FATF meeting.
“Declaring money laundering a cognisable offence is critical for ensuring technical compliance with the FATF standards and its rejection may have implications,” he added.
Since June 2018, the FATF has placed Pakistan on its grey list -- a category of countries whose mechanisms to curb money laundering and terror financing are seriously deficient.
The FATF plenary is set to review Pakistan’s status on February 16 amid chances that the country may remain on the grey list for a few more months.
In the last committee meeting sitting, the standing committee had approved the Foreign Exchange Regulations (Amendment) Bill 2019 and the Anti-Money Laundering (Amendment) Bill aimed at addressing the legal deficiencies pointed out by the FATF.
Senator Ayesha Raza Farooq of the PML-N said the government needed to keep ground realities in mind.
“Discretionary powers to arrest people without court permission could be misused by the law enforcement agencies,” she added.
Massive corruption at customs posts unearthed
The bills will now be tabled before the Senate for final approval. After the Senate’s approval, the bills will be sent back to the National Assembly for reconsideration in light of the changes made at the level of the standing committee.
The committee also unanimously rejected the proposal to empower investigating and prosecuting agencies to file suspicious transactions reports. Currently, these powers are available to the FMU only.
The standing committee approved enhancing penalties and also gave the nod to changes in the imprisonment limit.
As against the earlier decision to give a minimum one year jail sentence, the courts can hand down a punishment for even one day as per the new amendment.
The committee approved another amendment, increasing the fine for the offence from Rs1 million to Rs5 million.
Under another amendment, the FMU will be bound to promptly share information on money laundering with foreign jurisdictions instead of waiting for the “due administrative process”. Similarly, banks will be bound to promptly share suspicious transactions reports with the FMU instead of the existing limit of within seven days.
The committee also approved an amendment to empower investigation officers to attach the property involved in money laundering for six months as against the current period of three months.
Against its earlier decision of rejecting the proposal to allow courts to grant a further extension in the attachment period to up to one year, the committee gave the nod to giving the courts powers to extend the attachment period for up to six months.
Banks will also be bound to file suspicious transactions reports and, upon failing to do so, the individuals concerned will be liable to five years of imprisonment and a fine of Rs500,000.
A Senate panel on Friday rejected the government’s proposal to allow investigation officers to arrest anyone on money laundering charges without court permission – going back on the decision it had made three weeks ago.
Headed by PPP’s Senator Farooq H Naek, the Senate Standing Committee on Finance approved the majority of the amendments to the Anti-Money Laundering Bill to comply with the Financial Action Task Force’s (FATF) conditions.
However, it did not approve the amendment to declare money laundering a cognisable offence.
On January 7, the committee had approved the amendment with a thin majority of 5-4 to allow officers to arrest anyone on the suspicion of money laundering without a court warrant.
Islamabad almost ready to get off FATF grey list
Senators belonging to the PTI, the MQM-P and the Balochistan Awami Party (BAP) had voted in favour of the amendment three weeks ago but on Friday, all members of the committee, including Leader of the House in Senate Shibli Faraz, expressed their concerns over handing over these powers to investigation officers.
However, at the time of voting, Senator Faraz, Senator Mohsin Aziz of the PTI and Senator Anwar Kakar of the BAP voted in favour of making money laundering a cognisable offence.
The committee’s decision to reopen an already approved bill was surprising since it had already cleared the bill three weeks ago.
“There was some confusion about the approval of the Anti-Money Laundering Bill due to the lack of experience of the committee’s secretary,” said Naek, the body’s chairman.
Mansoor Siddiqui, the director general of the Financial Monitoring Unit (FMU), told The Express Tribune that the Senate panel’s decision to reject the proposal could adversely affect Pakistan in the upcoming FATF meeting.
“Declaring money laundering a cognisable offence is critical for ensuring technical compliance with the FATF standards and its rejection may have implications,” he added.
Since June 2018, the FATF has placed Pakistan on its grey list -- a category of countries whose mechanisms to curb money laundering and terror financing are seriously deficient.
The FATF plenary is set to review Pakistan’s status on February 16 amid chances that the country may remain on the grey list for a few more months.
In the last committee meeting sitting, the standing committee had approved the Foreign Exchange Regulations (Amendment) Bill 2019 and the Anti-Money Laundering (Amendment) Bill aimed at addressing the legal deficiencies pointed out by the FATF.
Senator Ayesha Raza Farooq of the PML-N said the government needed to keep ground realities in mind.
“Discretionary powers to arrest people without court permission could be misused by the law enforcement agencies,” she added.
Massive corruption at customs posts unearthed
The bills will now be tabled before the Senate for final approval. After the Senate’s approval, the bills will be sent back to the National Assembly for reconsideration in light of the changes made at the level of the standing committee.
The committee also unanimously rejected the proposal to empower investigating and prosecuting agencies to file suspicious transactions reports. Currently, these powers are available to the FMU only.
The standing committee approved enhancing penalties and also gave the nod to changes in the imprisonment limit.
As against the earlier decision to give a minimum one year jail sentence, the courts can hand down a punishment for even one day as per the new amendment.
The committee approved another amendment, increasing the fine for the offence from Rs1 million to Rs5 million.
Under another amendment, the FMU will be bound to promptly share information on money laundering with foreign jurisdictions instead of waiting for the “due administrative process”. Similarly, banks will be bound to promptly share suspicious transactions reports with the FMU instead of the existing limit of within seven days.
The committee also approved an amendment to empower investigation officers to attach the property involved in money laundering for six months as against the current period of three months.
Against its earlier decision of rejecting the proposal to allow courts to grant a further extension in the attachment period to up to one year, the committee gave the nod to giving the courts powers to extend the attachment period for up to six months.
Banks will also be bound to file suspicious transactions reports and, upon failing to do so, the individuals concerned will be liable to five years of imprisonment and a fine of Rs500,000.