ISLAMABAD: The National Assembly Standing Committee on Finance and Revenue, Tuesday, directed the Finance Ministry to give a detailed briefing on the performance of the Financial Monetary Unit (FMU) as well as other regulating units to choke financing to terrorism.
FMU has strategic goals to build a highly trained, efficient, professional & dedicated core personnel base, to develop a strong reporting culture locally among financial institutions and designated businesses and professions, to make a distinctive contribution to the domestic and international fight against money laundering and terrorist financing as well as to be an effective and recognized model of financial intelligence gathering, analysis and dissemination in Pakistan.
The Standing committee also showed displeasure over the in-preparedness of officials of both the Finance Ministry and State Bank of Pakistan about the proposed Foreign Exchange Amendment Act 2014. The said Act was laid in the National Assembly on August 6, 2014.
The statement of objects and reasons submitted by the SBP before the committee and available with this scribe states that SBP is the regulator of the foreign exchange regime in Pakistan and is responsible for the administration of the Foreign Exchange Regulations Act 1947.
Since the promulgation of the Act the volume of foreign currency transactions to and from Pakistan has considerably increased. It needs to have effective enforcement power to regulate the foreign exchange business of banks and exchange companies.
However, under the existing provisions of the Act, SBP has no direct power to impose monetary penalties on violation of provisions of the Act and has to follow a lengthy procedure of adjudication. It can only suspend or cancel the license of a bank or an exchange company on violation of any provision of the Act which often becomes more severe than the violation warrant. In order to provide determent and to enable SBP to take appropriate, effective and prompt remedial measures, this bill seeks to amend the Act to empower SBP, as regulator, to impose penalties for violation of the provisions of the Act
While briefing the committee about the salient features of Foreign Exchange Amendment Act 2014, Secretary Finance Dr Waqar Masood said that government had proposed to insert new Section namely 23 K regarding to impose penalty etc. Fazal Mehmood Director Foreign Exchange Division SBP, informed the committee that SBP had to go extra miles to hold the violators of the rules and regulations accountable. Moreover, the lengthy process also affected the gravity of enforcement as per the nature of violation.
On this the members of the committee showed concerns on amount the fine which may extend to Rs 1 million for each contravention. However, after the brief statement given by the Finance Secretary and SBP Governor the members agreed with the proposed amendments.
Later on, the members of the committee shoed their observation on the poor drafting of the bill by not mentioning the schedule wise details. The committee directed the Ministry of Finance and SBP to redraft the bill. It was also recommended that information regarding breakup details of number of cases dealt by SBP judicator and cases referred to Tribunal may be provided to committee.
The members of the committee were of the view that penalties should be defined according to the nature of offence. Omer Ayub Khan Chairman Committee stated that time frame should be defined to dispose of the cases by the Adjudicator of SBP and Tribunal. The committee strongly recommended to the Ministry of Finance and SBP to prepare proper draft and resubmit the same before the committee for further necessary action.
Meeting was attended by Qaiser Ahmad Sheikh, Pervaiz Malik, Syed Naveed Qamar, Phyllis Azeem, Nafisa Shah and senior officers from Ministry of Finance and SBP.
