AT the International Judicial Conference 2012 hosted in April in Islamabad by the Law and Justice Commission of Pakistan, one of the themes was terrorism and money laundering.

The group formulated and finalised 11 recommenations for the consideration of our lawmakers.

Pakistan has for years been facing the scourge of terrorism. While this has been widely discussed, particularly after 9/11, the crime of money laundering misses attention. While measures for tackling and curbing financial crime have been formulated in the international arena over the years, Pakistan’s legislatures have neglected the issue.

The main developments in this area during the 1980s and 1990s include the Twentieth Special Session resolution of the UN General Assembly of June 10, 1998, and the International Convention for the Suppression of the Financing of Terrorism (ICSFT) 1999.

The Financial Action Task Force (FATF) and the Asia/Pacific Group on Money Laundering (APG), the two main bodies considered to be at the forefront of monitoring/combating money laundering and the financing of terrorism, came into existence in 1989 and 1997 respectively. Both have developed recommendations which are endorsed by the Word Bank and the International Monetary Fund.

More recently came the United Nations Convention against Transnational Organised Crime (the Palermo Convention) of 2000 and UN Security Council Resolutions No. 1267, 1373 and  1617.

The Palermo Convention declared four measures to combat money laundering as per Article 7 of the Convention. The then military leadership in Pakistan chose not to become a signatory. That same year, however, Pakistan became a member of the APG.

In was in the succeeding decade that Pakistan first took noticeable action against the alternate remittance system known as hundi or hawala, which was flourishing in the country.

In 2004 the State Bank of Pakistan (SBP) required all hawaladars to have themselves registered as authorised foreign exchange dealers and meet the minimum capital criteria set by the SBP. Not all hawaladars have registered, however, even now. They operate illegally in different parts of the country without being offered any challenge by the law-enforcement apparatus. This can provide opportune chances to tax evaders, corrupt figures and sponsors of terrorism or insurgency to transfer black money or illegal funds in and out of the country.

Identifying and cracking down on illegal hawaladars is, therefore, one of the crucial challenges that Pakistan faces.

Also during this decade, Pakistan enacted its first anti-money laundering law. In July 2007, the APG issued a warning about suspending Pakistan’s membership from the group. Subsequently, the Anti-Money Laundering Ordinance (AMLO) was promulgated in September 2007 by the then president of Pakistan.

However, the AMLO 2007 suffered from many discrepancies. Some of the features of the ordinance stood in sharp contrast to core FATF standards and therefore had to be amended. Not all FATF-designated categories of offences, for instance arms trafficking, smuggling, sexual exploitation and trafficking in persons, were declared as predicate offences in the AMLO 2007. Also, the ordinance did not contain any specific provisions to report terrorist financing.

The AMLO 2007 was never re-enacted although its life was indefinitely extended by virtue of Article 5 of the Provisional Constitutional Order 2007, imposed by Parvez Musharraf.

This was replaced by the Anti-Money Laundering Act (AMLA) of 2010. The definitions and list of predicate offences were expanded and certain provisions of the AMLA 2010 were modified so as to bring it into conformity with the core recommendations of the FATF and the APG. Various offences of 15 legislations (as against 11 in the previous one), including all offences of the Anti-Terrorism Act (ATA) 1997, were listed as predicate offences in the 2010 legislation.

But during the group discussion on the subject in the April conference, it was noted that the relevant legislation concerning terrorist-financing offences (Sections 11 (f),(j),(k),(l) & (m) of the ATA 1997) have expired. These provisions were introduced through ordinances which were never subsequently placed before parliament for ratification.

The situation now is that no legislation for terrorist financing or money laundering exists within Pakistan. The country was blacklisted by the FATF in February.

Is there need for us to have specific laws on money laundering? Certainly, accusations of corruption on the part of many who are in the public eye abound.

Between 1988 and 1988, according to the Economic Survey of Pakistan 2000-2001, Pakistan borrowed and failed to repay a foreign debt of $13bn. The Prime Ministerial Secretariat in Islamabad, the Lahore-Islamabad motorway and Nawaz Sharif’s ‘yellow cab’ scheme were the major spending projects of the 1990s. Together these projects cost around $3bn.

Where did the rest of $10bn go?

During the same period, luxury flats in London’s Park Lane were bought through off-shore companies based in the British Virgin Islands. They were allegedly bought by Mr Sharif, who did not deny it. According to nomination papers filed in 1996 for the upcoming National Assembly elections, Mr Sharif paid approximately Rs600 as income tax between 1994 and 1996.

Then there was the Rockwood Estate in the UK. The contractor refurbishing the estate alleged that it had been bought by Asif Zardari in the early 1990s through an offshore company called Romena Properties, and that the purchaser had defaulted on the payment for refurbishment. Mr Zardari denied the allegation. In 2001, the British authorities handed over various artefacts from it to the Pakistani High Commission.

The SGS Cotecna case also related to the 1990s. A Geneva magistrate, Daniel Devaud, charged Mr Zardari with money laundering and froze accounts containing $13m.

These events took place at a time when Pakistan had no laws concerning money laundering. Now those that it had have expired. Will this country get serious in the fight against financial crime? Only time will tell.

The writer is a lawyer based in Lahore.