NA passes bill to 'end FATF threat forever'

Proposed law seeks to form a central authority to curb money laundering, terror financing

ISLAMABAD:

The National Assembly on Thursday passed a bill, which, according to a minister, will help Pakistan avoid the Financial Action Task Force’s (FATF) grey list forever if it is enforced and properly implemented.

Minister of State for Foreign Affairs Hina Rabbani Khar while presenting the bill – the National Anti-Money Laundering and Counter Financing of Terrorism Authority Act, 2023 – said that the proposed law will bring all institutions related to FATF under one authority.

The state minister while recalling the time when Pakistan was put on FATF’s grey list said that the proposed authority would function as a focal institution and help the state give a unified response to curb the menace of money laundering and terror financing.

“This is a good bill and if it is enforced and properly implemented then Inshallah [God willing] Pakistan never sees the FATF grey list again,” Khar said on the floor of the house, adding that the proposed law will institutionalize different entities and greatly benefit Pakistan.

Khar said Pakistan faced difficulties in three different arenas namely anti-money laundering (AML), countering financing of terrorism (CFT) and targeted financial sanctions (TFL) when it was put on the FATF grey list. She, however, hoped that the newly-passed bill would effectively address these issues.

Earlier, in December 2022, it was reported that the government had planned to establish an organization at the federal level that would be similar to the US Homeland Security Department.

The establishment of the authority suggests that the government is now implementing the same by making a centralized authority in Islamabad.

The statement of objects and reasons says that the purpose of the bill is to have an overarching body to supervise and coordinate matters pertaining to AML, the CFT and the TFS.

Currently, the statement says, money laundering (ML), financing of terrorism (TF) and targeted financial sanctions are being enforced under different laws mainly via Anti-Money Laundering Act 2010, Anti-Terrorism Act of 1997 and the United Nation Security Council Act 1948.

It adds that in order to unify state response by planning, combining, coordinating and implementing the government’s policy through an exhaustive strategic planning and necessary ancillary mechanism and to coordinate and collaborate at International level, there is a need for a focal institution.

Also, in order to address the challenges, a need was felt to have a sustainable and permanent authority with required mandate to operate under direct supervision of the prime minister.

The ultimate objective and aim of this authority would be to coordinate matters at the national level pertaining to the AML, the CFT and the TFS, including proposing changes to the policy, laws, rules and regulations to bring them in compliance with the international requirements and best practices and to mitigate the risk of the ML and the TF in the most effective and efficient way.

Headed by a chairman to be appointed by the premier, the authority will include secretaries of the finance, foreign affairs and interior division and the State Bank of Pakistan governor.

It will also include chairmen of the Securities and Exchange Commission of Pakistan, the National Accountability Bureau and Federal Board of Revenue; DGs of the anti-narcotics force and the financial monitoring unit; chief secretaries and any members recommended by the PM.

The authority shall act as focal point for the FATF and related international organizations, bodies and will carry out liaison with the competent authorities and other national, international organizations, bodies, and or entities for facilitating cooperation in areas relating to the AML, the CFT and the TFS.