Anti-Money Laundering Act: DG I&I-IR asked to initiate proceedings against ‘fit’ accused

ISLAMABAD: Directorate General of Intelligence and Investigation Inland Revenue (DG I&I-IR) has been directed to initiate proceedings under Anti-Money Laundering Act, 2010 (AMLA, 2010) against those persons who are suspected fulfill all the parameters of money laundering as per provisions of AMLA, 2010.

At the same time, the Federal Board of Revenue (FBR) has also directed the Customs department to refer big cases of currency seizure, having possible involvement in terrorism financing, to the Counter Terrorism Department (CTD) to investigate any links to terrorism financing (TF).

Sources told Business Recorder that the agency has realized the fact that every case of tax evasion is not a case of money laundering. There is a difference between the case of tax evasion and money laundering. The cases of tax evasion cannot be prosecuted under the Anti-Money Laundering Act.

DG I&I-IR starts separating cases of tax evasion and money laundering

The report stated that the Directorate General of Intelligence and Investigation Inland Revenue (DG I&I-IR) is a designated investigation and prosecution agency under Anti-Money Laundering Act, 2010 (AMLA, 2010) DG-I&I-IR is mandated to investigate and prosecute under AMLA, 2010 for the predicate tax offences mentioned vide section VIIA (Sales Tax Act, 1990), XIIA (Income Tax Ordinance, 2001 and XIV (Federal Excise Duty Act, 2005) in Schedule-I to AMLA, 2010.

It is the fundamental right of the accused to submit the evidence in support of its contention, accordingly sufficient opportunities will be provided to the accused. The accused have been requested for submission of documents. The issues will be decided in the light of the submitted document, the report added.

On the other hand, tax experts opined that the I&I wing staff was already making up its mind that it is not only a case of tax evasion but also that of money laundering.

It may be noted that non-declaration of an asset by a taxpayer is not a scheduled offence under the Income Tax Ordinance unless proved otherwise as required under the Anti-Money Laundering Act, 2010, which requires an independent exercise.

The FBR’s new guidelines shall be observed by the various Customs formations in relation to cases made out against persons on account of predicate offences, as listed in Schedule-I of the Anti-Money Laundering Act, 2010, under the Customs Act, 1969.

The directions said that the Customs and CTD shall continue to use the existing inter-agency coordination mechanism, including the Border Task Force (BTF) Forum, for mutual information sharing, cooperation and coordination against organised crimes, including money laundering and terrorism financing.

During the investigation of predicate offences, the investigating officer of Customs will keep the checklist in view while considering whether a case qualifies to be referred to CTD or not.

All cases of currency seizure, emanating from smuggling, mis-declaration or non-declaration of currency, bearer negotiable instruments, gold, jewellery, precious metals, gemstones, narcotics, psychotropic substances, or antiques under the relevant provisions of the Customs Act, 1969, in which, based on the scrutiny of documents, record, and or statements, one or more of the following criteria is/ are met, shall be referred on prescribed format to the CTD of the concerned province under intimation to the Director, Directorate of Cross Border Currency Movement (CBCM), the FBR stated.

(i); The accused is member of any of the UN designated entities or proscribed organisations or individuals under the Anti-Terrorism Act, 1997.

(ii); The accused is hit by the UN Security Council Resolutions related to countering terrorism and CFT.

(iii); Intelligence/ tip-off request for Mutual Legal Assistance or request for cooperation from a Law Enforcement Agency (LEA) in Pakistan or from a foreign jurisdiction is communicated to the Customs officer on duty, on the ground that the smuggling of the seized goods is meant for terrorism financing (TF).

Copyright Business Recorder, 2023