ISLAMABAD: The Senate Standing Committee on Finance on Monday put off the passage of proposed amendments to anti-money laundering and foreign exchange regulation laws in protest over absence of top economic team.
The committee led by Senator Farooq H. Naek brushed aside warnings from the Ministry of Finance over serious international implications of delayed passage of the legislation because of Financial Action Task Force (FATF) Action Plan.
The committee argued that the finance adviser and the secretary finance should have established seriousness with their presence. However, the committee decided to take up the matter again on Tuesday with the expectation of matching sincerity of the government side.
An additional secretary of the finance ministry told the committee that there could be serious problems for Pakistan if FATF action plan was not complied with by Tuesday that required changes to the Anti-Money Laundering Act (AMLA) 2010 and Foreign Exchange Regulation Act (FERA) 1947.
The committee deferred the approval and warned the government officials that it would like to know what was being asked from Pakistan and the government’s economic team should show seriousness towards the legislative process.
Some members of the committee opposed the restriction for not carrying more than $10,000 foreign currency within the country as well as enhanced punishment and making the offence cognizable.
The committee members observed that the government was not fully disclosing its agreement with the FATF. Even a treasury member stated that the committee must know about FATF demands. The meeting was informed that nine amendments were proposed in the AML Act to comply with the FATF requirements.
A senior official of the FMU while briefing the committee stated that there could be serious implications on trade of the country if it did not comply with the FATF action plan, adding non-compliance may lead to delay in opening of accounts and it would negatively impact the foreign direct investment and consequently the balance of payment position.
The additional secretary finance said that the government would be able to present the face-to-face Working Group meeting on January 20-21 if the law was approved by the committee before January 10, 2020. Otherwise, he stated that there would be serious implications for the country. “We are already walking on a very tight rope,” he added.
Director General FMU Mansoor Ahmed Siddiqui stated that as per latest status, Pakistan was largely compliant on 5 points of the FATF action plan, partially complaint on 17 and non-complaint on five points.
Published in Dawn, January 7th, 2020