ISLAMABAD: In an attempt to bring improvements in existing laws and fix loopholes in the Anti-Money Laundering Act 2010, the government on Wednesday moved a bill in the Senate which seeks to make it mandatory for financial institutions to report any suspicious transaction that could be used to finance a terrorist activity.
In the Anti-Money Laundering (Amendment) Bill 2014, the scope of suspected transactions has been enhanced. It will include fund “derived from any illegal activities or intended or conducted in order to hide or disguise proceeds of a crime”. The funds having no apparent lawful purpose could also come under anti-money laundering regulations once the authorities examine background and possible purpose of the transactions.
It will also include transactions involving “financing of terrorism, including funds collected, provided, used or meant for, or otherwise linked or related to, terrorism, terrorist acts or organisations and individuals concerned with terrorism”.
Once a financial institution detects any such transaction, it would have to report it to the Financial Monitoring Unit within seven days. In case an organisation or an official fails to do so, action could be taken against them.
The proposed amendments to the Anti-Money Laundering Act 2010 have also enhanced the powers of officials investigating such cases. If the investigating officer, on the basis of information in his possession, has a reason to believe that any person has committed an act which constitutes money laundering, he may himself, or authorise a subordinate to enter and search any place where he has reasons to suspect he can grab records of money laundering.
Such officials will be authorised to break open the lock of any door, box, locker, safe and seize the records. These officials will also be authorised to examine any person, who is found to be in possession of any such records or property.
In order to keep a check on unauthorised use of such blanket clauses, the proposed law ascribes that the powers of search and seizure will be exercised only by a Grade 20 official, or with his/her permission.
Once such a property is seized, the courts will give an opportunity of hearing to the concerned person. The court will be empowered to release the property or retain the seizure till the case is decided.
Pakistan adopted the Anti-Money Laundering Act in 2010 with an urge to comply with international requirements. The law had come in the backdrop of reservations of the International Financial Action Task Force (FATF) and Asian Pacific Group which are responsible for monitoring compliance of Anti-Money Laundering/Combating Financing Terrorism (CFT) regime by member countries, who had raised serious reservations on certain provisions of the Anti-Money Laundering Bill passed in 2007.
Under the existing laws, whosoever commits offences of money laundering is punishable with rigorous imprisonment for a term which shall not be less than one year but may extend to 10 years and shall also be liable to fine which may extend to Rs1 million and shall also be liable to forfeiture of property involved in the money laundering.
Published in The Express Tribune, January 1st, 2015.