FATF requirements: Political parties' input to be taken on proposed legislation

ISLAMABAD: A meeting of the finance committee of the National Assembly has decided to refer the proposed legislation to comply with the Financial Action Task Force (FATF) requirements to the special committee on legislation having representation of political parties in the parliament for detailed deliberations, while chairman of the committee threatened to resign from the committee, if the adviser on finance did not turn up in the next meeting.

Infuriated by the perpetual absence of the Adviser to the Prime Minister on Finance, Dr Abdul Hafeez Shaikh, from the finance committee's meetings, the chairman of the committee Faiz Ullah, who presided over the meeting of the finance committee on Tuesday, threatened to resign, if the adviser did not appear in the next meeting.

I will also walk out from the committee, if Hafeez Shaikh did not attend the next meeting, Fahim Khan of the Pakistan Tehreek-e-Insaf (PTI) also warned as opposition members said that the adviser had not been attending the meetings because the government did not want him to.

The meeting was informed that Pakistan was required by the FATF to implement an action plan to bring its financial systems in compliance with the international FATF standards on Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT).

Asia Pacific Group, in its Mutual Evaluation Report (MER) on Pakistan has also made recommendations on the AML/CFT.

The finance committee decided to refer the proposed legislation to comply with the FATF requirements to the special committee on legislation headed by Foreign Minister Shah Mahmood Qureshi for detailed deliberation after members of the opposition parties stated that the proposed bills, Anti-Money Laundering Second (Amendment) Bill, 2020, the Companies (Amendment) Bill, 2020, and the Limited Liability Partnership Amendment Bill, 2020, have been provided for a while ago, and they could not have the time to go through them.

On the issue of the FATF, Secretary Finance Kamran Naveed Baloch said that as the Minister for Industries and Production Hammad Azhar had been participating in the FATF and the APG meeting, he would be the appropriate person, to brief the committee on the matter.

However, in response to the members' questions, he stated that that he IMF had also been seeking progress on implementation of the FATF recommendations.

Director General Financial Monitoring Unit (FMU) informed the committee that amendments in anti-money laundering act were being made as the country had time till August 2020 to make legislation.

The meeting was told that the country would submit report on implementation of action plan by August 6, 2020, and mutual evaluation meeting of the APG would be held in September.

The meeting was informed that that out of 27 action plan agenda items, Pakistan had implemented 14 Action Plan items.

Earlier, over absence of the adviser, Hina Rabbani Khar said that it seemed that the government did not want him to attend the finance committee meetings, while Aisha Ghaus Pasha was of the view that the IMF wanted implementation of the FATF recommendations.

The meeting was informed that Pakistan was required by the FATF to implement an action plan to bring its financial systems in compliance with international FATF standards Laundering/Countering the Financing of Terrorism (AML/CFT).

Asia Pacific Group, in its Mutual Evaluation Report (MER) on Pakistan has also made recommendations on the AML/CET.

In the wake of these developments and after consultations with international consultants, FMU has proposed amendments in AML Act, 2 3020.

The proposed amendments will reflect the government's firm resolve to strengthen its Anti-Money Laundering (AML) regime in the country.

These amendments prescribed by the FATF are aimed at streamlining the existing AML law in line with the international standards.

These amendments would identify the AML/CFT regulatory authorities in Pakistan including the regulatory authorities for Designated Non-Financial Businesses and Professions (DNFBPs) and their powers.

Functions and powers of the AML/CFT regulatory authorities have been clearly defined with powers to issue licenses, regulations and to perform other ancillary functions to comply with the requirements of the provisions of the AML Act. Customers due diligence process have been explained in detail in the proposed amendments.

Moreover, the offence of money laundering has been proposed to be a cognizable offence.

The fine for the offence of money laundering has been proposed from existing up to rupees five million to up to 25 million rupees, and in case of legal persons, the fine may extend up to 100 million rupees in place of existing five million rupees.

The proposed amendments have been thoroughly reviewed by the international consultants engaged to assist Pakistan in implementation of the FATF action, APG mutual evaluation recommended actions, and other AML/CFT matters.

The meeting was informed that the Federal Cabinet had approved the bill on Draft Amendments in Anti-Money Laundering, second Amendment Bill 2020, dated 21st July, 2020, and the bill is going to be presented before the parliament (National Assembly) for legislation.

Copyright Business Recorder, 2020