FBR has moved list of recommendations and it is now up to government and parliament to amend Anti-Money Laundering Act 2010
ISLAMABAD: The Federal Board of Revenue (FBR) has moved a list of amendments to include fiscal offences in the Anti-Money Laundering Act 2010.
“Now it is up to the government and parliament to amend the requisite Anti-Money Laundering Act,” a source at the FBR told Customs Today.
“Currently, fiscal offences under Income Tax Ordinance 2001, Sales Tax Act 1990 and Customs Act 1969 are not part of Anti-Money Laundering Act and Cognisable, whereas internationally it is an important condition that fiscal offences will be part of anti money laundering act,” he added, saying, “Anti-Money Laundering Act 2010 defines fiscal offence as an offence punishable under specified clauses of the Income Tax Ordinance 2001 (XLIX of 2001) the Federal Excise Act 2005, Customs Act 1969, except Sections -2 (s) 15, 16, 32, 32 and 158, thereof the Sales Tax Act 1990 and not as a whole and it further says that any other law as the federal government may notify in this behalf.”
The source said that unfortunately, Pakistan was one of those countries which had strict legislation on money laundering but deliberately or internationally fiscal offices were made part of the said legislation.
“Consequently, violators get an easy way out of the jurisdiction of Anti-Money Laundering Act 2010,” the source added.
Moreover, the source said that the Financial Action Task Force (FATF), an inter-governmental body established in 1989 by the ministers of its member jurisdictions, had also blacklisted the FBR and the Finance Ministry for not making fiscal offence as a cognisable crime in the Anti-Money Laundering Act.
FTAF’s objectives are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system and it is a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
“The finance minister his recent most visit to the US, held detailed discussions with officials of FTAF on the sidelines of negotiations with the World Bank in New York in the beginning of last month and assured to include the fiscal offence in the anti money laundering act,” the source said.
“But, nothing has been done so far in this regard” the source adding, “This issue was again discussed in the ongoing negotiations with the International Monetary Fund (IMF) Dubai on Wednesday and FBR was requested for explanation in this regard.”
The source said that IMF was also told that FBR had provided a detailed list regarding inclusion of fiscal offences as commemorated in all three laws to the Finance Ministry and it was up to the government and parliament to amend the requisite the Anti-Money Laundering Act.
Money laundering is the process in which the proceeds of crime are transformed into ostensibly legitimate money or other assets. However, in a number of legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion and evading of international sanctions. Most anti-money laundering laws openly conflate money laundering (which is concerned with source of funds) with terrorism financing (which is concerned with destination of funds) when regulating the financial system.
Money obtained from certain crimes, such as extortion, insider trading, drug trafficking, illegal gambling and tax evasion is “dirty”. It needs to be cleaned to appear to have derived from non-criminal activities so that banks and other financial institutions will deal with it without suspicion. Money can be laundered by many methods, which vary in complexity and sophistication.
