Hiding assets not money laundering: IHC
The Islamabad High Court has dismissed a case of non-declaration of assets and concealment that had been filed under the Money Laundering Act against a businessman, declaring it “illegal”.
IHC Chief Justice Athar Minallah, in a five-page judgment, ruled that the Money Laundering Act would not apply if there was no evidence to prove that the assets were created with money gained through criminal means.
The Federal Board of Revenue (FBR) could not prove money laundering in the lawsuit, and the court maintained that the Money Laundering Act of 2010 was enacted to curb money laundering and terrorist financing.
Section 4 of the Act declared money laundering a punishable offense.
An FIR against the businessman was initially registered on June 29, 2021, alleging non-declaration and concealment of assets.
“Making a criminal case and alleging money laundering against the petitioner is an abuse of power and illegal,” the court verdict read.
The court dismissed the FIR registered under the Money Laundering Act as “illegal” and wrote that if the institution wanted to take action for the concealment of assets, it could do so under the relevant laws.
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Money laundering is the process used to disguise the source of money or assets derived from criminal activity. Pakistan’s Anti-Money Laundering regime is in place to ensure that crime does not pay and to protect the integrity of the domestic and international financial systems.
Terrorist financing involves the use of funds that may be licit or illicit in origin and using these funds to support terrorist activity. Though terrorist financing transactions are usually smaller in value than those associated with money laundering, it can result in tragic losses of life. Pakistan’s counter-terrorist financing system works to protect the public, in concert with the regimes for United Nations and Pakistani targeted financial sanctions.
The Anti-Money Laundering Act now includes obligations that apply to designated non-financial businesses and professions (DNFBPs). This includes lawyers and law firms, notaries, other legal professionals, accountants and accounting firms, when they provide certain services to client, real estate agents including brokers and dealers, builders and developers, housing authorities, as well as dealers in precious metals and stones including jewellers when conducting cash transactions over Rs2 million.
The accounting and legal sectors are also subject to anti-money laundering and counter-terrorist financing rules when they provide trust and company services for clients.