ISLAMABAD: The Federal Board of Revenue (FBR) is required to enhance its efforts to effectively deal with the cases of Anti-Money Laundering (AML)/ Counter Financing Terrorism (CFT) to keep Pakistan out of the Financial Action Task Force (FATF) grey list permanently.
Tax experts informed that Pakistan remained on FATF’s Grey List from 2008 to 2010, 2012 to 2015 and 2018 to 2022.
Due to strong political will and consistent AML/ CFT efforts of various departments especially FBR, Pakistan remained out of the grey list. The efficacy of efforts is required to the enhanced by FBR to sustain the current status of the country.
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The Directorate Generals of Intelligence and Investigations of Inland Revenue and Customs have been designated as investigating and prosecuting agencies designated under Anti-Money Laundering Act, 2010. Both these agencies have performed extraordinary during the recent past and Pakistan was taken off from FATF grey list. This performance is required to be continued by facing the challenges.
Sources told Business Recorder that the FBR has chalked out an effective plan to set future directions for the Directorate General of Intelligence and Investigation (Inland Revenue) before taking any action against the businessmen under the provisions of the AML Act. In this regard, the FBR has drafted a standing operating procedure (SOP).
Under the SOP, the Directorate General of Intelligence and Investigation Inland Revenue (DG I&I-IR) will ensure to separate cases of tax evasion and money laundering to stop prosecuting business community under Anti-Money Laundering Act, who were only involved in tax frauds. The directorate has realised 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. The tax evasion and money laundering are different cases. The Anti-Money Laundering Act is an evolving law and the benefit of the doubt would be given to the business community.
The suspicious transaction reports generated by the financial monitoring unit (FMU) do not specify whether it is a case of tax evasion or money laundering.
The FBR officials informed that the Directorate General of Intelligence & Investigation-Inland Revenue has been designated as investigating and prosecuting agency under Anti-Money Laundering Act, 2010.
The DG I&I-IR is mandated to investigate and prosecute Money Laundering offence based on the specified predicate offences of tax evasion investigation under the AML Act, 2010 is triggered from the Financial Intelligence (FIs) received from the Financial Monitoring Unit (FMU) of Pakistan and under section 6 & 7 of AMLA 2010. Under AMLA 2010, the DG I&I-IR till date has registered 243 cases of money laundering.
Copyright Business Recorder, 2023
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