Key bill fails to clear hurdle in senate panel

Disagreement continues with parliamentarians over inclusion of fiscal crimes

ISLAMABAD:

Despite conceding significant ground to opposition parties, the government on Wednesday again failed to get the amended Anti-money Laundering (AML) Bill approved from the Senate Standing Committee on Finance. 

Although Standing Committee Chairman Senator Saleem Mandviwalla softened his opposition towards the bill, other legislators did not allow him to put the proposed piece of legislation for voting.



Though the approval of the AML Bill 2015 was not on the agenda of the meeting, Mandviwalla said the government had requested him to take up the bill as an urgent matter.

Under a condition of the International Monetary Fund (IMF), the government is bound to amend the AML Act of 2010, aimed at including fiscal crimes as predicate offences of anti-money laundering. The inclusion of the fiscal crime is a cause of disagreement between parliamentarians and the government.

The government wanted to get the bill approved from the standing committee before scheduled talks with the IMF, which will begin from Monday till November 6.



The government had given a written assurance to the IMF that the parliament will adopt the amendments to the AML Act by September. After it missed the deadline, the IMF gave another deadline of November for the approval.

Mandviwalla has convened another meeting on October 28 to help the government get the bill passed during the IMF talks.

The IMF wants serious tax crimes and the definition of ‘politically exposed persons’ to be made a part of the AML Act. The purpose of the proposed amendments is said to be using anti-money laundering tools to combat tax evasion, and facilitate detection of potential cases of abuse of the investment incentive scheme to launder criminal proceeds.



“The government has agreed to all the demands of the standing committee and now there is no reason for delaying the approval,” said a visibly frustrated Finance Secretary Dr Waqar Masood. “Upon demand of the standing committee, the number of tax crimes has been reduced from 29 to only six, limiting the scope of tax fraud.”

He insisted that the inclusion of tax crimes in the AML Act was not something the IMF required, but “is being done to meet the requirements of Financial Action Task Force (FATF).”

However, Senator Kamil Agha of PML-Q opposed the inclusion of Section 192 of Income Tax Ordinance that dealt with the prosecution for submission of false tax statement and section 194 - prosecution for improper use of National Tax Number - in the ambit of AML Act.

Senator Agha said that these crimes did not relate to money laundering and could be dealt under the existing laws. “If the government’s proposal is accepted, no company in Pakistan would be able to conduct business with the rest of the world,” he added.

While supporting the bill, Senator Ayesha Raza Farooq of the PML-N questioned the motives of opposing the bill, and hinted that those opposing it might expose skeletons in the closet.

The parliamentarians feared that Federal Board of Revenue (FBR) would misuse the AML Act against politicians.

However, Dr Waqar said the FBR would need prior permission of Financial Monitoring Unit (FMU) before triggering the AML Act for tax related crimes. His explanation could not satisfy parliamentarians.

The government lacks majority in the upper house and is dependent on other political parties for the smooth sailing of legislative business. The bill is pending with the Senate standing committee since February this year.

Published in The Express Tribune, October 22^nd, 2015.

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