Anti-money laundering: Cabinet approves pacts with Iran

Agreements were signed in May 2014

ISLAMABAD:

As Islamabad’s efforts against terrorism gain momentum, the Cabinet has approved the Foreign Office’s request for the government to sign a formal deal with Iran to combat the threat of money laundering and terrorist financing.

The move would help Pakistan get greater support from Iran in its fight against terrorism and check the illicit flow of funds for terrorist financing in both countries.

Prime Minister Nawaz Sharif visited Iran on May 11 and 12, 2014. During the visit, two documents were signed: an agreement on bilateral cooperation on money laundering and terrorist financing and a Memorandum of Understanding between the Financial Monitoring Unit (FMU) of Pakistan and the Financial Intelligence Unit of Iran (IRIFIU) on the exchange of financial intelligence.

According to documents tabled before cabinet meeting held on February 23, the Foreign Office had now forwarded those two instruments signed in Tehran in May 2014 and now sought that formal agreements should be signed between the two countries to deter money laundering and terrorist financing.

Money laundering is a global phenomenon and is now recognised as a threat to the international financial system. The United Nations Financial Action Task Force (FATF), an inter-governmental body, has been created to set standards for combating money laundering and terrorist financing so as to protect the international financial system from this threat.

Policy recommendations of the FATF are binding upon all the countries. Pakistan is a member of regional body Asia Pacific Group on Money Laundering (APGML) which comprises 40 countries and 22 international and regional observers including Financial Action Task Force, World Bank, International Monetary Fund (IMF) and Egmont Group.

Under section 6(4)(e) of the Anti-Money Laundering Act of 2010, the FMU can cooperate with financial intelligence units in other countries for sharing information on money laundering subject to reciprocal agreement entered into by the federal government.

Officials said that the Prime Minister had earlier accorded approval for the signing of the MoUs, with instructions that the agreement should subsequently be placed before the cabinet for its formal approval. That approval was granted in the meeting held on February 23.

Published in The Express Tribune, March 8^th, 2015.