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EDITORIAL: The disclosure of prominent Pakistanis-politicians, former bureaucrats and military officials, businesspeople and media moguls-with offshore accounts in the second round of leaked documents by the International Consortium of Investigative Journalists (ICIJ) based on more than 11.9 million confidential files from 14 offshore firms shared with 150 news organisations around the world has generated media frenzy yet again.

The reason: the first round referred to as the Panama Papers (3 April 2016) led to the eventual dismissal of the then Prime Minister Nawaz Sharif and his disqualification for life in a verdict by the Supreme Court mid-2017 due to his children's failure to provide adequate proof of source and trail of income stashed through Mossack Fonseca, a Panamanian law firm and corporate service provider.

The 700 plus Pakistanis named in the Panama Papers were not investigated which may be attributed to many taking advantage of the numerous amnesty schemes that were launched as part of successive administrations' drive, albeit with very limited success, to bring those outside the legal economy into the tax net. Critics, including Imran Khan as a member of the opposition at the time, claimed perhaps equally legitimately that these names included the elite or those with sufficient political influence though not part of the political process itself.

It is, however, important to note that the October 3, 2021 Pandora Papers revelations have come about when there has been considerable tightening of money laundering rules at international and national levels in recent years - the former requiring member states to become signatories to sharing of financial information (including matters relating to bank and corporate secrecy, predicate offense, Politically Exposed Persons and Money Laundering and prosecution and forfeiture).

Given Pakistan's presence on FATF's grey list, the Federal Board of Revenue (FBR) has rightly uploaded an entire range of rules to unearth money laundering, including the anti-money laundering (second amendment act) 2020, the anti-terrorism (third amendment act) 2020, the United Nations Act, the FBR anti-money laundering/counter financial terrorism regulations, the AML/CFT sanction rules 2020, numerous counter measures for high risk jurisdiction rules 2020, and jurisdiction of designated non-financial businesses and professions that include real estate agents, dealers in precious metals and stones.

Notwithstanding this comprehensive list, the fact that must not be lost sight of is that an amnesty scheme was announced by the PML-N's Shahid Khaqan Abbasi government in April 2018 less than two months before it completed its five-year tenure, extended by the Caretakers after the Supreme Court verdict as before the court's blessing it did not take off with Imran Khan stating that if elected he would go after all those who avail of it.

The Khan administration then proceeded to notify an amnesty ordinance on 16 May 2019 titled the Asset Declaration Scheme to "provide voluntary declaration of undisclosed assets, sales and expenditure" though, like the PML(N) amnesty scheme, this declaration scheme too was not applicable to holders of public office, public company defined under clause (47) of section 2 of the income tax ordinance 2001, proceeds of assets involved in or derived from a crime, gold and precious stones, bearer prize bonds, bearer securities, shares, certificates, bonds or any other bearer assets and proceedings pending in any court of law.

Last year, to deal with the onslaught of the pandemic and his firm belief that construction can jump-start the economy, the Prime Minister announced a special package for the construction sector where no questions would be asked as to the source of wealth of the investors.

The situation, therefore, gives birth to a logical question: what should be the PTI government's approach to the Pandora Papers leaks? Investigating as to whether those on the Pandora Papers list were engaged in illegal activity or whether they had already declared their offshore accounts under the multiple amnesty schemes announced to date in which case their offshore accounts would be legal. In our view this is the only possible course available to it.

Copyright Business Recorder, 2021

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