AML Authority law, The Parliament legislated on July 3, 2023, the National Anti-Money Laundering and Counter Financing of Terrorism Authority Act 2023 (AML Act). Through this act an overarching authority has been created.
In order to understand the nature and function of this authority it is essential to look into the primary features of AML provisions in Pakistan and their regulatory mechanism. Afterwards the salient features of this law have been discussed.
What is an AML Act?
Anti-Money Laundering Act, 2010 Act is an act to provide for prevention of money laundering, combating financing of terrorism and forfeiture of property derived from, or involved in, money laundering or financing of terrorism.
Proceeds of crime and anti-money laundering
From Pakistan’s perspective this is an important act for the reason that this legislation combines proceeds of crime regulations and anti-money laundering laws. It is therefore essential that whilst dealing with this act it has to be kept in mind that the crime under this act goes beyond the ordinary meaning of money laundering. For example, the suppression of sales and evasion of income or sales tax is treated as a predicate crime under this act.
Regulators of the Act
There are two kinds of regulatory authorities for the administration of the AML Act. First are government institutions namely:
SBP for any reporting entity licensed or regulated under any law administered by SBP;
SECP for any reporting entity licensed or regulated by SECP under any law administered by SECP;
Federal Board of Revenue for real estate agents, jewellers, dealers in precious metals and precious stones and accountants who are not the members of ICAP and ICMAP;
National Savings (AML and CFT) Supervisory Board for National Savings Schemes;
Pakistan Post (AML and CFT) Supervisory Board for Pakistan Post; and
The self-regulatory bodies; namely
The Institute of Chartered Accountants of Pakistan established under the Chartered Accountants Ordinance, 1961 (Act X of 1961) for their respective members;
The Institute of Cost and Management Accountants of Pakistan (ICMAP) established under the Cost and Management Accountants Act, 1966 (Act XIV of 1966)for their respective members;
The Pakistan Bar Council established under the Legal Practitioners and Bar Councils Act, 1973 (Act XXXV of 1973); for lawyers and other independent legal professionals that are enrolled under the Pakistan Bar Council or Provincial Bar Councils of Islamabad Bar Council; and
AML Authority
There was no one authority to deal with the subject and the respective regulators. Therefore, In order to unify state response by planning, combining, coordinating and implementing, Government’s policy through an exhaustive strategic planning and necessary ancillary mechanism and to coordinate and collaborate at international level on the matter of anti-money laundering, countering financing of terrorism and targeted financial sanctions by way of promulgating requisite legal and regulatory framework an authority has been formed by the name of National Anti-Money Laundering and Counter Financing of Terrorism Authority
The Authority shall act as an overarching body for implementation by the relevant competent authorities under the relevant laws with respect to anti-money laundering, countering financing of terrorism and targeted financial sanctions.
Composition of the Authority
The Authority shall be comprised of the following:
(a) Chairman - To be appointed by the Prime Minister
(b) Secretary, Finance Division of the Ministry of Finance- Member
(c) Secretary, Foreign Affairs Division of the Ministry of Foreign Affairs- Member
(d) Secretary, Interior Division of the Ministry of Interior - Member
(e) Governor, State Bank of Pakistan - Member
(f) Chairman, Securities and Exchange Commission of Pakistan - Member
(g) Chairman, National Accountability Bureau - Member (h) Director General, Federal Investigation Agency - Member
(i) Director General, Anti-Narcotics Force - Member
(j) Chairman, Federal Board of Revenue - Member
(k) Director General, Financial Monitoring Unit - Member
(1) National Coordinator, National Counter Terrorism Authority - Member
(m) The Director General of the Authority - Member/Secretary
(n) Chief Secretary or his nominee not below BPS 21 of each province including Azad Jammu and Kashmir and Gilgit Baltistan- Member
(o) Any other member as recommended by the Prime Minister
Powers and functions
The powers and functions of the authority shall inter alia be:
(a) to act as focal point for the Financial Action Task Force and related international organisations, bodies and to carry out liaison with the competent authorities and other national’ international organisations, 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); relating to anti-money laundering, countering financing of terrorism and targeted financial sanctions and propose amendments to the Federal Government;
(c) to review, from time to time, national policies’ laws and regulations
(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 employer; of the Authority and grant additional allowances, rewards or 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 international organisations 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.
Concurrent powers
Unlike other laws this act provides that it shall not override limits or extinguish any functions and or powers of any authority, agency department or competent authority in connection with anti-money laundering, countering of financing of terrorism and targeted financial sanctions, whether such functions and or powers have been conferred upon any authority, agency, department or competent authority under any law or through executive or administrative order of the Federal or Provincial Government, as the case may be. However:
(a) the Prime Minister’s Office Order No. 3021 dated 2nd August, 2019 constituting the National Financial Action Task Force Coordination Committee shall stand rescinded; and
(b) Notification No. 4-1l2019-Min-I dated 30-12-2019 of the Federal Government setting up the National Financial Action Task Force Cell shall stand rescinded.
(2) All rights, powers, authorities and privileges, of whatever kind of the National Financial Action Task Force Coordination Committee and the National Financial Action Task Force Cell subsisting immediately before their dissolution shall stand transferred to and vest in the Authority established under this Act.
Copyright Business Recorder, 2023
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