The government has decided to introduce a Mutual Legal Assistance (MLA) Act to help the country seek assistance of foreign jurisdictions while undergoing criminal investigations/prosecutions of money laundering cases under Anti-Money Laundering Act, 2010.
Sources told Business Recorder here on Friday that the decision has been taken in the 8th meeting of the General Committee (GC) of the Executive Committee constituted under Anti-Money Laundering Act, 2010 held in Finance Division, Islamabad under the Chairmanship of Secretary, Finance.
Sources said that a standalone law on mutual legal assistance in criminal matters is one of the major requirements of AML/CFT regime. The Legal Consultant, Finance Division elaborating need for Mutual Legal Assistance Law said that the international standards require every country to provide mutual legal assistance in all serious crimes whereas Pakistan's mutual legal assistance regime is very limited and does not meet international standards. He further added that the enactment of mutual legal assistance law would help Pakistan in seeking/providing assistance from/to foreign jurisdictions during criminal investigations/prosecutions and ancillary matters. The representative of Ministry of Law endorsed the views of Legal consultant. The representative of Interior Division intimated that the draft law has been sent to Law Division for vetting. The Law Division indicated that draft law will be reviewed within two weeks for further action.
It has been decided that the Ministry of Interior and Ministry of Law will finalize the draft of Mutual Legal Assistance Act as soon as possible. On the issue of FATF's Onsite visit / Progress on FATF's Action Plan, sources said that the Director General Financial Monitoring Unit (FMU) stated that Financial Action Task Force (FATE) in its June 2014 Plenary after reviewing Pakistan's progress on Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) Action Plan including amendments in Anti-Terrorism Act, 1997, authorised Regional Review Group (RRG) to undertake an onsite visit of Pakistan during August 28-29, 2014 to confirm the status of reforms initiated by Pakistan in terms of Action Plan. Regarding preparations and schedule of meetings, DG, FMU stated that all the requisite actions were complete and a meeting with relevant stakeholders is being held to discuss the matters relating to RRG's onsite visit.
It has been decided that all ministries and agencies would extend their cooperation to FMU with regard to RRG onsite visit and make appropriate preparations in the light of the Action Plan. About the proposals for Amendments in AML Act, 2010, sources said that the General Committee was informed that an AML Review Subcommittee comprising all AML/CFT stakeholders was constituted. The subcommittee finalised proposals for amending AML Act, 2010. Additional predicate offences will also be included in the schedule of the Act. These proposals were presented in 7th meeting of NEC wherein the GC was asked to examine the proposals. The representative of Finance Division intimated that the matter has since been examined while list of tax-crimes received from Federal Board of Revenue (FBR) will be reviewed shortly by a working group formed by the Finance Division.
The meeting advised the representatives of Finance Division to finalise the proposals as early as possible, sources said. About the performance of FMU & Law Enforcement Agencies (LEAs), sources said that the DG, FMU told that a meeting with the representatives of LEAs and other stakeholders is being held to review the progress of LEAs and regulatory bodies with respect to the actions taken by them on the receipt of the reports of financial intelligence from FMU. All the LEAs intimated their progress in terms of inquiries/investigations on the receipt of financial intelligence' reports send by FMU.
It has been decided that the LEAs would further streamline their systems of maintaining statistics viz, inquiries, investigations, prosecutions, freezing, seizures, forfeiture, etc, in respect of cases of money laundering and terrorist financing.
The committee was intimated that the Finance Minister has approved the recruitment against 11 vacant posts in FMU while the positions of supporting staff will be filled by requisitioning services of the State Bank of Pakistan Staff The Summary to seek Prime Minister's approval on relaxation of ban on recruitment was submitted to the Prime Minister. It was further mentioned that the Draft Staff Rules received from FMU after examination, were circulated to Regulation Wings of Establishment and Finance Divisions for their concurrence. Moreover, the case of ad hoc increase in salaries of FMU employees is under consideration of the Finance Division.
It has been decided that the Finance Division will follow the FMU staff rules with Regulation Wings of Establishment and Finance Divisions and also expedite the case of ad hoc increase in salaries of FMU employees. About the progress on the National AML/CFT Strategy, sources said that the DG (FMU) informed that NEC had approved a National AML/CFT Strategy in January 2012 and since than, a number of short-term and medium-term tasks have been completed; however, there are few areas that still need further attention. It was emphasised that the focus of the upcoming RRG team would be the implementation measures in place particularly the declaration requirement for those incoming passengers carrying more than US $10,000. SBP issued notification in July 2012 to implement this decision however strict actions need to be taken.
The FBR will take necessary steps to ensure full implementation of the declaration regime by displaying banners notifications for declaration of Currency and Bearer Negotiable Instruments (BNIs) at prominent places at all entry points / Airports in Pakistan. Further, all stakeholders will take actions on the outstanding items of the National AML/CFT Strategy as discussed during the GC meeting.
Sources said that the FATF recommendation No 1 (Assessing risks and applying a risk-based approach) requires countries to identify money laundering and terrorist financing risks for their country and should take appropriate actions ensuring that the risks are mitigated effectively. Pakistan's Mutual Evaluation is scheduled in 2017 by APG. The FMU suggested that Pakistan should initiate its Risk Assessment during the year 2015 so that Action Plan could be developed and put in place before the start of Mutual Evaluation in 2017. World Bank has offered its expertise in carrying out National Risk Assessment and a presentation to this effect was also given to Finance Division by World Bank Team in May 2014.
The GC gave approval for carrying out NRA in co-ordination with all AML/CFT stakeholders with the assistance of World Bank in the year 2015 and advised Additional Finance Secretary to inform World Bank accordingly. On the issue of guidance for Financial Institutions on Tax Amnesty Scheme, DG (FMU) informed the meeting that in accordance with IMF letter of Intent FMU is required to issue guidelines to Financial Institutions to detect potential cases of abuse of the tax amnesty scheme to launder criminal proceeds. For this purpose draft guidelines in consultation with SBP and SECP have been prepared and shared with Finance Division. FMU also mentioned that FATF, in its June 2014 plenary found the tax amnesty scheme compliant with FATF's standards. Additional Finance Secretary (IF) apprised the Chair that the draft guidelines are under consideration in the Finance Division.
Finance Division has been advised to finalise the guidelines at the earliest in consultation with FMU. On the issue of proposed AML Regulations, 2014, DG (FMU) explained that the AML regulations were first issued by FMU in January 2009 under the AML Ordinance 2007. Now the need has arisen to review and substitute the AML Regulations, 2008 with new regulations in the light of AML Act, 2010.
It has been decided that the GC approved the proposed AML Regulations with the advice to place these regulations before NEC for approval as per requirement of AML Act, 2010. The Chairman of meeting in the light of GC's functions enunciated in the AML Act, emphasised the need of holding the meetings of GC quarterly so that important AML/CFT issues could be reviewed / discussed / resolved frequently. Thus, now- onwards, meetings of GC would be held on quarterly basis, they added.
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