ISLAMABAD, April 25: Pakistan has informed the UN Security Council's Counter-Terrorism Committee that it is actively considering early enactment of an anti-money laundering law.
Sources said that a draft law was being reviewed by relevant ministries after the subject of terrorist financing had been removed from its scope after much consideration.
"Conceptually, money-laundering and terrorist financing are two different issues," an official source said. According to a compliance report submitted to the UN Security Council on counter-terrorism measures taken by Pakistan, it was said that the Anti-Terrorism Act, 1997, comprehensively covered all financial instruments and other valuables that could be cashed and used for terrorism.
The subject of terrorist financing has been removed from the scope of the draft anti-money laundering law as sections 11-J and 11-K of the Anti-Terrorism Act make terrorist financing a predicate offence for actual, proposed or potential acts of terrorism.
The UNSC was informed that Pakistan's law did not allow the government to freeze funds, financial assets or economic resources of suspected persons or entities, either resident or non-resident, on the request of another state. However, if it was required to freeze the assets or funds of a terrorist organization on the request of any other state, the "laws and the courts were involved to authorise such procedures" and "to give them legal cover."
The report said the anti-money laundering law had been designed to encompass laws necessary to meet international standards. It represents a compendium of items drawn from UN conventions, model laws, the core principles for effective banking supervision developed by the Basel Committee on banking supervision.
In addition to the legal and natural persons, the draft anti-money laundering law would apply to 12 different types of financial operations. Under the proposed law, the financial institutions would be required to take special measures regarding the originators of wire transfers in and out of Pakistan and also establish special anti-money laundering programmes.
The attorney-general of Pakistan, the SBP governor and the Securities and Exchange Commission of Pakistan (SECP) chairman would have significant responsibilities under the law.
New rules and regulations in compliance of the anti-money laundering law are required to be issued by the SBP governor and the SECP chairman to all the financial institutions regarding minimum standards for all customer identification and scrutiny of high risk accounts.
