Government has decided to ink reciprocal pacts with the United States of America (USA) and United Arab Emirates (UAE), which will allow authorities to share information of individuals' suspected of money-laundering, terrorist financing and other financial crimes, well informed sources in Finance Ministry told Business Recorder.
The sources said Pakistan is a member of Asia Pacific Group on Money Laundering (APGML) since 2001. APGML is a regional body comprising 40 members and 22 international and regional observers including Financial Action Task Force (FATF), World Bank, International Monetary Fund (IMF) and Egmont Group. Like other regional Anti- Money Laundering & Combating of Financing of Terrorism (AML/CFT) bodies, APG had adopted FATF.
The FATF is an inter-government body to generate the necessary political will to bring about legislative and regulatory reforms for the development and promotion of national and international policies to combat money laundering and terrorists financing.
The FATF, in its report on June 25, 2010 on improving global AML/CFT compliance advised Pakistan to ensure a fully operational and effectively functioning Financial Intelligence Unit (FIU) as per FATF recommendation and consider to follow the Egmont Group statement of purpose, and its principles for information exchange between the FIUs.
According to sources, Pakistan has created its FIU and is now looking forward to joining Egmont Group. As per procedure, FIU while seeking the membership of Egmont group has to identify two sponsors. FIUs of USA and Japan have shown their interest in sponsoring Pakistan's FIU. Once Pakistan agrees to the sponsorship of USA and Japan, these FIUs will work with Pakistan to go through the membership process as per procedure in vogue.
Federal Cabinet has to approve the summary of Finance Ministry on "permission for initiating the process of seeking membership of Egmont Group" by the Pakistan's Financial Monitoring Unit (MFU) to allow FIUs of USA and Japan to sponsor Pakistan's membership and Pakistan's FMU which would initiate the process of applying for membership of Egmont Group.
The sources further maintained that the Department of the Treasury, Financial Crimes Enforcement Network (FinCEN), FIU of USA through a letter of April 11, 2012 proposed the two FIUs to work in close co-operation in order to support ongoing law enforcement investigations and proactively identify persons suspected of money laundering, terrorists financing and other financial crimes. Where warranted, FMU and FinCEN may submit information requests on form attached with FinCEN's letter to help each other to achieve these goals.
Giving details regarding proposed agreement with the UAE, the sources said, during 10th session of the Joint Ministerial Commission between Pakistan and UAE, held in Abu Dhabi on February 26-27, 2012, the UAE side provided the draft Memorandum of Understanding (MoU) for co-operation in the exchange of financial information related to money laundering and terrorists financing.
Section 26 and 6(4) of the Anti Money Laundering Act, 2010(AML Act, 2010) provided information sharing on money laundering and combating financing of terrorism subject to reciprocal agreements entered into by the federal government. Finance Ministry, sources said, will seek cabinet's approval, in terms of rule 16 of the Rules of Business 1973 to accord approval in principle for initiating negotiations for a reciprocal agreement between GoP and UAE and MoU between FMU of both countries.