Pakistan's Parliament passes bill to establish new authority to curb money laundering and terror financing

Pakistan's Senate on Friday gave its nod to a bill to establish a new authority to curb money laundering and terror financing, a legislation which is expected to help the country not to be on the grey list of the Financial Action Task Force (FATF) again.

On Thursday, the National Assembly passed the bill, which seeks to form a central authority to curb money laundering and terror financing, bringing all institutions related to the Financial Action Task Force (FATF) under one command.

Paris-based FATF leads global action to tackle money laundering, terrorist and proliferation financing.

State Minister for Foreign Affairs Hina Rabbani Khar moved the "National Anti-Money Laundering and Counter Financing of Terrorism Authority Bill" in the Senate, a day after it was passed by the National Assembly, the lower house.

According to the draft bill, the authority will be headed by a chairman who will be appointed by the Prime Minister.

Its members would include federal secretaries for finance, foreign affairs and interior; the governor State Bank of Pakistan; chairpersons of the Securities and Exchange Commission of Pakistan, National Account­ability Bureau, and Federal Board of Revenue.

Directors general of the Federal Investigation Agency, Anti-Narcotics Force and Financial Monitoring Unit; national coordinator of the National Counter Terrorism Authority; and chief secretaries of all four provinces.

The authority can convene meetings on the requisition of the chairman or half of its members.

Khar after introducing the bill stated that it was an effort to curb money laundering and terror financing and a continuation of the great work done to get Pakistan out of not only the Financial Action Task Force (FATF) grey list.

The bill will become law once signed by President Arif Alvi.

Pakistan was placed on the grey list of the FATF in 2018 and had to make a huge effort to get out of it in 2021.

Last year, Pakistan was taken off the grey list of the FATF, the global watchdog on terror financing and money laundering, four years after the country was put in the infamous categorisation.

Currently, money laundering, financing of terrorism and targeted financial sanctions are enforced under different laws, mainly via the Anti-Money Laundering Act of 2010, the Anti-Terrorism Act of 1997 and the United Nations Security Council Act of 1948, the Express Tribune report said.

Recalling when Pakistan was put on the Paris-based FATF's grey list, Khar said that the proposed authority would function as a focal institution and help the state give a unified response to curb the menace of money laundering and terror financing.

''This is a good bill, and if it is enforced and properly implemented, then Inshallah [God willing] Pakistan never sees the FATF grey list again,'' Khar was quoted as saying in the report.

She added that the proposed law would institutionalise different entities and greatly benefit Pakistan.

Noting that Pakistan faced difficulties in three different arenas, namely anti-money laundering (AML), countering financing of terrorism (CFT) and targeted financial sanctions (TFL) when it was put on the FATF grey list, Khar hoped that the newly-passed bill would effectively address these issues.

In 2018, the FATF found Pakistan's deficiencies in its legal, financial, regulatory, investigation, prosecution, judicial and non-government sectors to fight money laundering and combat terror financing, which are considered severe threats to the global financial system.

According to the statement of objects and reasons, the bill's purpose is to have an overarching body to supervise and coordinate matters about AML, the CFT and the TFS, the report said.

It added that to unify state response; there is a need for a focal institution, a sustainable and permanent authority with the required mandate to operate under the direct supervision of the prime minister.

The ultimate objective of the authority would be to coordinate matters at the national level about anti-money laundering, countering the financing of terrorism and targeted financial sanctions, including proposing changes to the policy, laws, rules and regulations to bring them in compliance with the international requirements and best practices and to mitigate the risk of the money laundering and the terror financing most effectively and efficiently.

The authority shall act as the focal point for the FATF and related international organisations and bodies and will liaise with the competent authorities and other national, and international organisations, bodies, and/or entities for facilitating cooperation in areas relating to the AML, the CFT and the TFS.

Headed by a chairman to be appointed by the prime minister, the authority will include the finance, foreign affairs and interior division secretaries and the Governor of the State Bank of Pakistan.

It will also include chairmen of Pakistan's Securities and Exchange Commission, the National Accountability Bureau and the Federal Board of Revenue, DGs of the anti-narcotics force and the financial monitoring unit, chief secretaries and any members recommended by the premier, the report said.

The FATF is an inter-governmental body established in 1989 to combat money laundering, terror financing and other related threats to the integrity of the international financial system.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)