Money laundering, terror financing challenges: Senate passes law to establish authority

ISLAMABAD: A day after getting approval from the National Assembly, the Senate on Friday passed a law amid resistance from some senators which will allow the government to establish “National Anti-Money Laundering and Counter Financing of Terrorism Authority Pakistan” to ensure the continuation of the country’s progress which led to Pakistan’s removal from the grey list of the Financial Action Task Force (FATF) in October last year and related matters.

The bill, titled “National Anti-Money Laundering and Counter Financing of Terrorism Authority Bill,” was tabled in the Senate by State Minister for Foreign Affairs Hina Rabbani Khar and consequently, passed with a majority vote of 28 and eight amid strong sloganeering from the opposition benches.

Not only did the opposition parties, Jamaat-e-Islami (JI) and the Pakistan Tehreek-e-Insaf (PTI) expressed con cernsover the bill, but members from the treasury benches such as the PPP’s Raza Rabbani, Tahir Bizenjo of the National Party, and Kamran Murtaza of the JUI-F also opposed it.

FATF’s grey and black lists: Bill aimed at fully insulating country passed

An overall 11 bills were rushed through the Upper House in Friday’s session which also witnessed a lack of quorum on many occasions as the opposition benches pointed it out thrice.

These bills include, “The Federal Urdu University of Arts, Sciences and Technology, Islamabad (Amendment) Bill, 2023”, “The National Skills University Islamabad (Amendment) Bill, 2023”, “The Imports and Exports (Control) (Amendment) Bill, 2023”, “The Trade Marks (Amendment) Bill, 2023”, “The Hajj and Umrah (Regulation) Bill, 2023”, “The Pakistan Ruet-e-Hilal Bill, 2023”, “The Emigration (Amendment) Bill, 2023”, “The National Anti-Money Laundering and Counter Financing of Terrorism Authority Bill, 2023”, “The Gas (Theft Control and Recovery) (Amendment) Bill, 2023”, “The Press Council of Pakistan (Amendment) Bill, 2023”, and “The National Logistics Corporation Bill, 2023”.

While explaining the purpose of the bill – National Anti-Money Laundering and Counter Financing of Terrorism Authority Bill, 2023 – in the House, Hina Rabbani Khar said that bill is actually an effort by the government of Pakistan for the continuation of the great work that the state has done to get Pakistan out of not only the FATF grey list but now ensuring that the continuation of that work must happen in an institutionalised manner.

She said that the monitoring of money laundering and terror financing could not be confined to one area, adding that the financial monitoring unit was set up under the Ministry of Finance while the NACTA was also set up. So, this bill basically is proposing to set up an authority, she added.

Khar said that the authority will ensure that it is able to bring all the work that is happening within the government of Pakistan and the provinces at one place so that “we can monitor our progress, and if there are any loopholes, we can connect them and stop them before we run into serious problems”.

In its statement of objects and reasons, the bill states that to have an overarching body to supervise and coordinate matters pertaining to Anti-Money Laundering (AML), Countering Financing of Terrorism (CFT) and Targeted Financial Sanction (TFS).

Currently, money laundering (ML), financing of terrorism (TF) and targeted financial sanctions are being enforced under different laws mainly via Anti-Money Laundering Act 2010, Anti-Terrorism Act, 1997, and the United Nations Security Council Act, 1948.

In order to unify state response by planning, combating coordinating and implementing the government’s policy through an exhaustive strategic planning and necessary ancillary mechanism and to coordinate and collaborate at the international level there is a need for a focal institution.

In order to address these challenges, a need was felt to have sustainable and permanent authority, an AML/CFT Regulatory Authority with required mandate under direct reporting to the prime minister.

The ultimate objective and aim of this authority would be to coordinate matters at the national level pertaining to AML, CET, and TFS. Including proposing changes to the policy, laws, rules and regulations to bring It in compliance with international requirements and best practices and to mitigate the risk of ML/TF in the most effective and efficient way.

The bill further states that the Authority shall be a body corporate having perpetual succession and a common seal with powers, subject to the provision of this Act, to acquire and hold property, movable and immovable, and to sue and be sued by its name. It adds that the Authority shall have administrative and financial powers to carry out its functions with its headquarters at Islamabad and it may set up offices at such other places in Pakistan as may be deemed appropriate.

The authority shall be comprised of its chairman to be appointed by the prime minister with representation from: secretary, Finance Division of the Ministry of Finance; secretary, Foreign Affairs Division of the Ministry of Foreign Affairs; secretary, Interior Division of the Ministry of Interior; governor, State Bank of Pakistan; chairman, Securities and Exchange Commission of Pakistan; chairman, National Accountability Bureau; director general, Federal Investigation Agency; director general, Anti-Narcotics Force; chairman, Federal Board of Revenue; director general, Financial Monitoring Unit; National Coordinator, National Counter Terrorism Authority; The director general of the Authority/secretary; chief secretary or his nominee not below BPS 21 of each province including Azad Jammu and Kashmir and Gilgit-Baltistan; any other member as recommended by the prime minister.

Powers and Functions of the Authority: (1) The Authority shall act as overarching body for implementation by the relevant competent authorities under the relevant laws with respect to anti-money laundering, countering of financing of terrorism and targeted financial sanctions;

(2) Without prejudice and generality of the foregoing, the Authority shall have following powers and functions: - (a) to act as focal point for the Financial Action Task Force and related international organizations, bodies and to carry out liaison with the competent authorities and other national, international organizations, bodies and or entities for facilitating cooperation in areas relating to anti-money laundering, countering of financing of terrorism and targeted financial sanctions;

(b) to coordinate and oversee the implementation of a national strategy to fight money laundering, countering financing of terrorism and targeted financial sanctions and approve national action plan(s) for implementation of such national strategy(s); (c) to review, from time to time, national policies, laws and regulations relating to anti-money laundering, countering financing of terrorism and targeted financial sanctions and propose amendments to the federal government; (d) to coordinate at policy level and provide policy advice to the federal/ provincial/ local competent authorities and the Provincial Governments on implementation of anti-money laundering, countering financing of terrorism and targeted financial sanctions regime to maintain uniformity at national level; (e) to formulate rules and regulations, and conditions of the employees of the Authority and grant additional allowances, rewards or any other incentives in consultation with the Finance Division after the approval of the federal government; (f) to enter into any agreement, memorandum of understanding or protocols with counterpart national or interactional organizations in relation to cooperation in anti-money laundering and countering financing of terrorism and targeted financial sanctions; provided however, that this function shall not be construed to override powers of any competent authority to enter into such arrangements under their respective laws; and (g) to discuss and deliberate on any other issue of national importance relating to money laundering, financing of terrorism and targeted financial sanctions.

Meanwhile, the House referred the Pakistan Electronic Media Regulatory Authority (Amendment) Bill, 2023, to the relevant standing committee of the Senate after fierce opposition by senators.

Copyright Business Recorder, 2023