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On 3 October the International Consortium of Investigative Journalists (ICIJ) opened a Pandora's box of sorts for the Khan administration by listing more than 700 Pakistanis associated with offshore companies while the amended Accountability Bureau Ordinance, akin to a Pandora's box, was opened by the administration itself four days later on 7 October 2021.

Subsequent to the release of the Panama papers in 2016 Imran Khan, in opposition at the time, in an interview to a British daily stated: "I wasn't surprised by the Panama Papers but I was happy. It is disgusting the way money is plundered in the developing world from people who are already deprived of basic amenities: health, education, justice and employment. This money is put into offshore accounts, or even Western countries, western banks. The poor get poorer. Poor countries get poorer, and rich countries get richer. Offshore accounts protect crooks." Imran Khan called on all investigating agencies at the time to probe the legality of these accounts. Federal Board of Revenue (FBR), State Bank of Pakistan and Securities and Exchange Commission were tasked to investigate those whose names appeared on the list.

The only casualty of the Panama Papers was the disqualification of the then Prime Minister Nawaz Sharif - a verdict rendered by the Supreme Court in a case officially titled the Imran Ahmed Khan Niazi versus Mian Mohammad Nawaz Sharif. The court set up a Joint Investigation Team led by Wajid Zia of the Federal Investigation Agency (FIA) including one member from the SBP, one from SECP, one from National Accountability Bureau (NAB) and one each from ISI and military intelligence.

After assumption of office in August 2018 the Khan administration served notices as per the then Finance Minister Asad Umer to "at least 294 Pakistanis out of the 444 who have been named in the Panama Papers leak." He further contended that action is being taken against all Pakistani nationals listed in the Panama Papers and "at least 15 cases - worth about 10.9 billion rupees - are in the final stages. So far, 6.2 billion rupees has already been recovered by the authorities." No further mention of the Panama Papers has been made since - of action and/or recovery if any.

While the Panama Papers were sourced to a single company, Mossack Fonseca, the Pandora Papers have a much wider source, 14 offshore companies. However details, as pointed out by the FBR to Business Recorder, and confirmed by a representative of the ICIJ, have not yet been uploaded on the ICIJ website.

The Pandora Papers elicited the following response from Prime Minister Imran Khan in a tweet, "I call on the international community to treat this grave injustice as similar to the climate change crisis. If unchecked, inequalities between rich & poor states will increase as poverty rises in the latter. This in turn will lead to a flood of economic migration from the poor to the rich states, causing further economic & social instability across the globe."

For the 700 plus Pakistanis listed in the papers, including a couple of federal ministers, the Prime Minister tasked Prime Minister's Inspection Commission (PMIC), headed by party member Ahmad Yar Hijaz, to investigate the legality of all offshore accounts. PMIC has considerable powers to conduct inquiries into criminal proceedings against defaulting government officials (not those in the private sector) though it has remained largely dormant since its establishment during Ziaul Haq's tenure. Its budget has on average been around 60 million rupees per annum with around 85 percent earmarked for salaries (chairman and a four member team). The only known case investigated by PMIC during the Khan administration is with reference to complaints by the Pakistani disapora in Saudi Arabia made to the Prime Minister against Embassy staff. Three were found guilty of misconduct: former ambassador Raja Ijaz Ali, deputy head mission Zeeshan Ahmed and Counsellor Aurangzeb.

Be that as it may, a high-level committee has been set up with representation from three entities notably FBR, FIA and NAB. One would assume that SBP and SECP if not already members of the committee would be invited as and when required. And the Asset Recovery Unit should also be represented.

FBR intends to issue notices and write to offshore companies (neither of which elicited any favourable response after the Panama papers). Prior to engaging in this letter writing FBR has to determine whether the offshore accounts are legal (declared) or illegal (undeclared). Given the recent amnesty schemes offered by our administrations - one in late 2018 and another in 2019 - FBR would have to first ascertain whether amnesty was availed in which case it would no longer be within the amended NAB ordinance purview. The only exception limited to the last two amnesty schemes would be politically exposed persons (PEP), an exclusion that may reflect a requirement of the Financial Action Task Force. The Khan administration can make some strides given this exception subject of course to its own political considerations.

The amended National Accountability ordinance promulgated by the President on 7 October limits NAB's engagement in this investigation to those having assets beyond known means of income as the following are now excluded from its ambit: (i) federal, provincial cabinets or other federal provincial decision making platforms, board members of State Bank of Pakistan, (ii) procedural lapses in any public or government work unless a holder of public office has been conferred or received any monetary or other material benefit for that particular public work; and (iii) any person or entity who, or transaction in relation to, which are not directly or indirectly connected to the holder of a public office. In other words, NAB will have no jurisdiction over those named under the Pandora papers.

FIA was not part of the Panama Papers inquiry but is at present and it is unclear whether it has the capacity to investigate the Pandora names. Wajid Zia's success is sourced by many to detailed available investigation on the assets of the former prime minister by Pakistan's premier agencies. However and at whatever pace the Khan administration decides to proceed with the Pandora papers, the fact is that they are generating debate within the developed countries based on the fact that offshore accounts are held only by the very rich. Legislation is therefore required and existing laws must be tightened to ensure tax evasion (illegal) and tax avoidance (legal) are at best stopped or realistically at least minimized.

To conclude, one would hope for a similar debate in Pakistan and appropriate mitigating legislation to be enacted.

Copyright Business Recorder, 2021


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