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Financing terrorism declared an offence

* Companies, employees can be fined upto Rs 5m for offences under proposed legislation

By Sajid Chaudhry

ISLAMABAD: The National Assembly Standing Committee on Finance on Tuesday approved the Anti-Money Laundering Bill 2009, declaring “terrorism financing” a criminal offence.

Officials of the Finance Ministry and the State Bank of Pakistan (SBP) informed the committee members that Pakistan, being a signatory to various UN conventions, required laws in line with international standards to combat money laundering and terrorism financing.

The committee meeting, presided by Fauzia Wahab, was attended by Finance Minister Shaukat Tareen, Finance Secretary Salman Siddique, the SBP deputy governor, SBP Banking Policy director and other senior officials.

The committee also approved increase in penalty from Rs 1 million to Rs 5 million for a company or its employees found guilty of an offence under the proposed bill.

The committee was informed that the amendments were in line with international standards on combating money laundering and financing of terrorism. In the proposed bill, the definition of “financial institutions” includes any institution accepting deposits and other repayable funds from public, lending in whatsoever form, financial leasing, money or valuable transfer, managing credit and debit cards, cheques, travellers cheque, money orders, bank drafts and electronic money among other financial activities.

Smuggling is also one of the requisite predicate offences as per Financial Action Task Force (FATF). To include “smuggling” as a predicate offence, only bringing some provisions of the Customs Act, 1969 under the purview of the Anti-Money Laundering Bill 2009 was proposed. As per FATF recommendations, actions such as concealment, disguise, third-party laundering, facilitating and counselling have also been declared offences in the proposed bill.

Finance Secretary Salman Siddique informed the committee that Pakistan had already been issued a notice to upgrade the existing anti-money laundering laws before February 2010.

In case of a failure to amend the existing laws, Pakistan would be declared a high-risk country, its letters of credit (LCs) would not have been honoured abroad, which, he said, would create difficulties for the country’s businessmen, the finance secretary added.

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