FOR those interested in knowing how any investigation of the Panama leaks is likely to be derailed eventually, look no further than the discussions at the hearing held by the Senate Standing Committee on Finance on Wednesday. The State Bank, represented by its deputy governor, claimed that a law from 1992 places “no restriction” on anybody to remit foreign exchange out of the country. A corporate lawyer echoed the same claim while adding that the leaked information was stolen and may be inadmissible in a court of law. Besides, the government had no means of obtaining the cooperation of authorities in other countries involved in the operations of these offshore entities. In short, by its own legislation to safeguard the foreign exchange regime, the government is now hamstrung to conduct any proper investigation into the origins of the funds that are apparently being transacted by the prime minister’s family in the Panama Papers.

The argument points not only to the likely defence that will be mounted in the event of an investigation, but also to the reluctance of the State Bank to become involved in it. If and when an investigation does take place, those carrying it out could well find numerous such technicalities obstructing their path. And technicalities is really what this argument is built around. In the Asim Hussain investigation, for instance, the State Bank extended extraordinary cooperation to the Rangers, complying with demands to assist in furnishing detailed financial information in the absence of court orders or even the framing of formal charges against any of the accused. Clearly, where there is a will there is a way.

The legislation referred to in the hearing is the Protection of Economic Reforms Act of 1992. At the time, the act assured immunity to foreign currency account holders against any inquiries by tax authorities as to the source of funds, and any restrictions on the movement of money into and out of these accounts. But the argument that the provisions of that law can impede the investigation in the case of the Panama Papers is specious. That law was amended in 1999 to withdraw such immunities to citizens of Pakistan and only covers scrutiny by tax authorities. Those amendments have not been tested in a case such as the one being sought in this instance. Additionally, there are many other laws that are relevant too, such as the Anti Money Laundering Act of 2010, and the amended State Bank Act more recently. The fact that none of the senators were able to effectively engage the wily lawyer in a debate, along with the State Bank’s wilful acquiescence, shows the standing committee’s deficient will and capacity to deliberate this important matter, as well as the difficulties that will arise when crafting an actionable path forward.

Published in Dawn, April 29th, 2016