Those named in the Pandora, Panama papers: SC urged to ask FBR to seek sources of funds

ISLAMABAD: The Supreme Court has been urged to order the federal government and the Federal Board of Revenue (FBR) to seek the sources of funds, and how money from Pakistan was transferred to offshore companies by those named in the Pandora Papers and the Panama Papers.

Syed Adil Gillani, managing director Transparency International-Pakistan, on Friday, filed a petition under Article 184(3) of Constitution through advocate Hashmat Habib and cited the Federation through secretary Ministry of Finance, chairman National Accountability Bureau (NAB), director general Federal Investigation Agency (FIA), Head of Asset Recovery Unit (ARU), chairman Federal Board of Revenue (FBR), governor State Bank of Pakistan (SBP), and chairman Securities and Exchange Commission of Pakistan (SECP).

The petitioner stated that on October 7, he also wrote to Prime Minister Imran Khan on this issue.

He stated that in order to determine any wrongdoing, it is imperative that the FBR seeks from those named in the Pandora Papers and Panama Papers to provide proof that the sources of funds were not derived from criminal offence, and explain that with supporting documentary evidence that how the funds were sent to offshore companies or abroad.

Habib submitted if the Pakistani citizens whose name appeared in the Panama Papers and Pandora Papers are unable to satisfy and provide reasonable justification within three months about their foreign assets and that Foreign Assets (Declaration and Repatriation) Act, 2018 is not applicable on them, then the FBR freeze their accounts, confiscate their properties and initiate proceedings under Article 51/52/53/54/55/56/57/58, Chapter V (Asset Recovery) of Stolen Asset Recovery Initiative included in UN Convention Against Corruption (UNCAC) ratified by Government of Pakistan in August 2007.

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He said the FBR also ensured that all foreign assets declared in 2018, were not from or derived from the commission of a criminal offense, i.e.tax evasion, money laundering etc.

The petition stated that when the Panama Papers were released in April 2016, various petitions were filed in the Supreme Court, which directed SECP, SBP, FIA, and FBR to investigate the matter.

He regretted that however, the apex court proceeded against a few Pakistani citizens, "while no action was taken against a majority of the citizens named in the papers".

Similarly, SECP, SBP, FIA, and FBR failed to initiate any tangible action against them.

Habib maintained that FBR and SECP were supposed to initiate inquiries under the provisions of Income Tax Ordinance 2001, but they did not act on their own.

He mentioned that the Tax Amnesty Scheme Foreign Assets (Declaration and Repatriation) Act, 2018, announced on April 8, 2018 was rejected by Prime Minister (Imran Khan), in his capacity as the head of the PTI, stating that the Act is intended to punish taxpayers for their honesty and provides a chance to corrupt individuals to "turn their black money white".

The petitioner submitted that according to Section 4 of the Tax Amnesty Scheme Foreign Assets (Declaration and Repatriation) Act, 2018 it is also not applicable on public office holders, their spouses and dependent children and the members of the Board of Directors of public sector enterprises such as the PIA, the SSGCL, PQA etc.

He said SECP under article Companies (Amendment) Ordinance, 2020 dated 30th April 2020, had tried to change definition of beneficial ownership of foreign companies, in Section 452, "from following provision", to that less than 10 percent foreign holding by citizen is not to be declared to the SECP, on which, the TI Pakistan objected to SECP on 15.6.2020.

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He stated that under the Tax Amnesty Scheme the Foreign Assets (Declaration and Repatriation) Act, 2018 declaration of assets at two percent to three percent values were allowed, but money trail, and proof that the sources of funds were not derived from criminal offence, were to be provided to the FBR.

Similarly, tax evasion under sections, 192,193,194,195,196,197,198, and 199 of Income Tax Ordinance 2001, and remittance of money from Pakistan, not through the SBP route, are declared as criminal acts under the laws of Pakistan.

The counsel said as per the then Federal Minister for Finance Asad Umar, the FBR on August 18, 2018, had issued notices to at least, 294 Pakistanis out of 444, who were named in the Panama Papers leaks.

However, following such a sensational announcement nothing seems to have come to fruition from the issuance of said notices.

Copyright Business Recorder, 2021