Money laundering investigation

Money laundering investigation

While giving briefing to journalists after the cabinet meeting on Tuesday, Federal Information Minister Fawad Hussain Chaudhry disclosed that Counter Terrorism Department (CTD) has been authorized to investigate money laundering related charges. Up till now the matter was within the purview of Federal Investigation Agency which also conducted crackdown to curb money laundering through Hundi and Hawala. The cabinet has also decided to continue crackdown against terrorists.

It is not yet clear as to whether the existing anti-money laundering laws allows authorization to CTD for probe into money laundering activities or the laws shall be amended. The Prime Minister had directed in November last year that a new legislation should be finalised to effectively deal with offences related to money laundering. In March this year the Prime Minster chaired a high level meeting which decided to amend Anti-money laundering Act 2010 to ensure stricter punishments to be imposed on individuals involved in money laundering by bringing them to justice. But the legislation has so far not been tabled in the parliament.

In an angry reaction to the notices issued by NAB Lahore to Shahbaz Sharif family members, leader of the opposition in Punjab assembly Hamza Shebaz claimed in a press conference the money transfer transaction abroad by his family was in accordance with rules and regulations. Perhaps he was referring to certain provisions of the Protection of Economic Reforms Act 1992 which was passed and enforced in the first government of Nawaz Sharif. Sub clause (b) of the section-2 of the Act deals among other financial activities with holding and transfer of currencies. Sub section (2) of section-5 grants immunity to the deposits in foreign currency accounts from the levies of Income Tax, Wealth Tax and even from the important fundamental of Islam which pertains to the payment of Zakat by Sahib-i-Nisab income of Muslims. Sub section (3) binds banks to ensure secrecy of foreign currency accounts and income accrued thereon. An amendment was made to Section-5 of the Act in April 2018 and the State Bank of Pakistan (SBP) issued a circular to banks and foreign exchange companies accordingly which allowed as usual feeding of foreign currency accounts from abroad through travels cheques and foreign exchange generated from the sale of securities. However, for the cash deposits of foreign exchange the account holder must be a filer of Income tax under Income Ordinance 2001. It remains to be seen how far the PTI government succeeds in the passage of new legislation to amend the anti-money laundering Act 2010.

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