September 09, 2007	Sunday	Sha'aban 26, 1428

ISLAMABAD, Sept 8: President General Pervez Mushrraf on Saturday promulgated the much-awaited anti-money laundering law through a presidential order to plug the informal market as part of compliance to UN Security Council’s Counter-Terrorism Committee.

The law has been enacted through an ordinance just three days ahead of the sixth anniversary of the September 11 attacks on US, though the draft law was under negotiations at various fora for the last one year, to be tabled in the National Assembly for making it an act of the parliament.

A task force had been constituted in 2001 following immense pressure from the international community in the wake of 9/11 incident, asking Pakistan to frame a law for controlling the expected supply of money to terrorist organisations or persons.

Under the law, a person shall be guilty of offence of money laundering, if the person acquires, convert, possess or transfer property, knowing or having reason to believe that such property is proceeds of crime.

It further says if the person renders assistance to another person for acquisition, conversion, possession or transfer of or for concealing or disguising the true nature, origin, location, disposition, movement or ownership of property, knowing or having reason to believe that such property is proceeds of crime.

The punishment for a person, who commits the offence of money laundering will be rigorous imprisonment for a term which shall not be less than one year but may extend to 10 years.

The offender shall also be liable to fine, which may extend to Rs1 million and shall also be liable to forfeiture of property involved in money laundering.

Under the law, a six-member national executive committee will be established within 30 days of the enactment of the law. The committee will be headed by the finance minister or advisor to prime minister on finance.

Its members include senior advisor to prime minister on foreign affairs and law; ministers for law and justice, interior, governor SBP, SECP chairman, director general, and other member of the committee, to be nominated by government.

The committee will determine offences existing in Pakistan that may be considered to be predicate offences for the purpose of this ordinance, frame rules and regulations, and necessary directions to the agencies involved in the implementation.

This committee will be assisted by a general committee, headed by the secretary of finance. The members include secretaries of interior, foreign affairs, law, SBP governor, SECP chairman and director general. It will assist the national executive committee in implementation and framing of rules.

The law allows establishment of financial monitoring unit (FMU), which shall be housed in SBP or at any other place.

The FMU shall have an independent decision-making authority on day-to-day matters coming within its areas of responsibility.

The ordinance confers 10 specific powers and functions on FMU which range from receiving of suspicious transaction reports to data maintenance.

The law also prescribes procedure and manner of furnishing information by the financial institutions; attachment of property involved in money-laundering. It also carries out details about the investigation process, vesting of property in federal government, powers of arrest, search of person, retention of property, management of forfeited properties, and powers of survey.

No civil or criminal proceedings against banking companies, financial institutions shall be initiated in certain cases.

The law, besides other purposes, is expected to encourage transfer of money through banking channels, which would ultimately reduce the function of Hawala and Hundi — an informal system and insecure system for money transfers.