The Ministry of Finance has directed the Securities and Exchange Commission of Pakistan (SECP) to develop a Standard Operating Procedure (SOP) in co-ordination with State Bank of Pakistan (SBP), Ministry of Interior and Federal Investigation Agency (FIA) for compete closure of the unlicensed exchange companies and Hawala/Hundi operators.
Sources told Business Recorder here on Monday that the key decisions were taken in the last meeting, held in Finance Division under the chairmanship of Finance Minister Ishaq Dar, to review the progress on the recommendations of the sub-committee on chocking financing for terrorists and terrorist organisations.
The government has decided to chock financing to terrorists and terrorist organisations by taking measures including exchange of data between Federal Board of Revenue (FBR) and Federal Investigation Agency (FIA) of frequent travellers abroad, complete closure of unlicensed exchange companies and Hawala/Hundi operators, disallow proscribed entities attempting to operate under new names, biometric verification of accountholders at banks, freezing bank accounts of proscribed entities/individuals, a new model law for registration of NGOs/NPOs and complete re-registration of all entities (INGOs, NGOs, NPOs, etc) registered under different laws, sources said.
The SBP appreciated FIA's role for taking action against Hawala/Hundi operators and illegal exchange companies. The Finance Minister emphasised that unlicensed exchange companies should completely be closed and for this purpose SOPs if required be developed by SECP in co-ordination with SBP, MoI and FIA. DG (FIA) will update the participants about crackdowns undertaken against Hawala/Hundi operators.
Chairman, the FBR informed the meeting that database of persons frequently travelling abroad carrying amount of less than $10000 is being exchanged with SBP and FIA. Special currency monitoring units were established at all airports to stop illegal transfer/smuggling of currency. The original sub-committee recommendations vis-à-vis discussed issues and decisions taken in the meeting are:
Original recommendations: All UNSC-Designated Pakistani based entities should additionally be proscribed under the ATA-1997. Secondly, the individuals associated with the proscribed entities should also be proscribed (Action to be taken by MoI).
When a proscribed entity attempts to operate under a new name or organisational structure, the same shall also be proscribed under ATA. As consequence of proscription the funds and other assets should be identified and frozen (Action: MoI, NACTA, LEAs).
On these issues, Secretary, Interior informed that all UN designated Pakistani based entities have been proscribed under Anti-Terrorism Act, 1997 while proscribed individuals were placed in Schedule IV ATA. Lists would be shared with State Bank of Pakistan for freezing their bank accounts and also with National Counter Terrorism Authority (NACTA) for developing their own database. On this, the representative of SBP informed the meeting that SBP does not possess the powers to freeze bank accounts under its laws. Hence, placing proscribed individuals in the Fourth Schedule under ATA, 1997 may not empower the SBP to freeze such accounts unless legal authority instrument/Notification under the said law is provided by the Government. The Secretary, Interior further apprised that substantial work in relation to subsidiary seizure rules under ATA is to be done.
The representative of Ministry of Foreign Affairs showed concern that certain UNSCR proscribed Pakistani based entities have not been proscribed under ATA. For this reason the queries are frequently raised regarding activities of such organisations still engaged in collection of funds, hides through social/print media and operating under new names. Even some countries have approached UNSCR for Pakistan's inaction against entities of concern. MoFA requested that details of proscription under ATA may be shared.
Decisions: Ministry of Interior shall ensure proscription of all UNSC designated entities and Individuals under ATA and sharing of details with MoFA. Ministry of Interior shall also share the readily available data of 4th Schedule with SBP for freezing their accounts if linked with proscribed entities/individuals. Ministry of Interior would not allow proscribed entities attempting to operate under new names.
Original recommendations of sub-committee: Continuous monitoring and surveillance of the proscribed organisations and individuals (by whatever changed name or organisations) (Action to be taken by MoI, NACTA, LEAs). Secondly, creation of a specialised cell in the office of each IGP of the province and federally administered territories (Action: MoI and Provincial Home Departments) and launching of broad-based national program on capacity building of LEAs and prosecutors in TF in all the provinces and police academies (Action: MoI, Provincial Home Departments, MoF/FMU).
During the meeting, Secretary, Interior informed that steps have been initiated for establishment of specialized counter terrorist financing cells in each provincial Counter Terrorism Deptt; including CTF modules in the training curriculum at all levels of police training; making TF part of all terrorist interrogations and investigations and capacity building of the concerned staff through seminars and workshops is being carried out.
Decisions: Ministry of Interior, NACTA and LEAs will ensure continuous monitoring/surveillance of the proscribed organisations and individuals and make efforts for establishing specialised cells in the office of IGP of each Province and Federally Administered Areas.
Original Recommendations: NACTA to play the central role to strengthen and reform the co-ordination mechanism among federal and provincial agencies and NACTA shall maintain the consolidated database of terrorism offences, including terrorist financing, investigation and prosecutions and share the same periodically with the relevant stakeholders.
On the issue, Secretary, Interior informed that NACTA is developing its own modules for co-ordination with the federal and provincial agencies. Moreover a consolidated database is also being made. NACTA is actively co-ordinating with provincial CTDs and FIA CT Wing to ensure that provinces and federal government have strong cooperation mechanism.
Decision: NACTA will make concerted efforts for developing co-ordination mechanism among the federal and provincial agencies.
Original recommendations: All governments (provincial and federal) shall be required re-registration of all entities (NPOs/ charities/ NGOs) registered under different laws within a period of 6 months, failing which these organisations will not be eligible to access financial and banking services. A Task Force shall be constituted to frame a comprehensive model law for orderly operations of such entities, which will be strictly enforced. (Action: federal and provincial governments)
The Secretary Finance apprised the participants that SECP has started commendable work for revalidation of the licenses of NGOs/NPOs etc registered as companies under Companies Ordinance, 1984. The Secretary Interior mentioned that registration of all INGOs is being carried out by a committee comprising relevant stakeholders and registrations work of 114 INGOs has so far been completed. Now an electronic platform is available for online registration of INGOs. Once the details of accounts, names, funds etc are completely available after sharing with the SBP and other agencies, these entities will not be able to operate any hidden account. He further suggested that registration task of local NGOs will be carried out by the provinces as MoI already burdened with voluminous work is not able to undertake the job. The Secretary Interior proposed assigning of this task to IPC Division which has co-ordination with provinces.
The representative of a law enforcement agency added that monitoring on the transfer of INGOs funds, allocation in particular area and declaration of accounts needs to be ensured.
Decisions: Ministry of IPC will be assigned the work of making consolidated database of local NGOs, NPOS, Charities, etc, in co-ordination with provincial governments. Ministry of Law and Justice to frame a model law for registration of NGOs, NPOS, charities, etc, operating in the provinces. Federal and Provincial governments will complete re-registration of all entities (INGOs, NGOs, NPOs, etc) registered under different laws.
Original recommendations: Crackdown on illegal exchange companies (Hawala/Hundi) by FIA, SBP and FBR shall be carried out in co-ordination with provincial police. Also take up matter with the foreign jurisdiction in consultation with MOFA. (Action to be taken by the FIA, the SBP and the FBR)..... FBR, SBP, FIA and ANF to initiate action against drug transits, illegal proceeds and misuse of Afghan Transit Trade (Action: FBR, SBP, FIA and ANF).
Governor the SBP appreciated FIA's role for taking action against Hawala/Hundi operators and illegal exchange companies. The Finance Minister emphasised that unlicensed exchange companies should completely be closed and for this purpose SOPs if required be developed by SECP in co-ordination with SBP, Mol and FIA. DG (FIA) updated the participants about crackdowns undertaken against Hawala/Hundi operators.
National Co-ordinator NACTA stated that the list of 865 Hawala/Hundi operators supplied by Intelligences Bureau has been shared with SBP, FMU for examining their accounts on suspicion with illegal proceeds or terrorist financing. SBP representative informed that they have referred 490 cases of illegal foreign exchange operators to FIA since 2005, including 62 cases since January 2015. Regarding misuse of Afghan Transit Trade, the relevant implementing agency should initiate preventive measures. SBP will provide necessary support if required. Further, SBP has issued instructions to Banks and DFIs to make use of bio-metric technology at the branch level for verification of particulars of prospective customers. The deadline for installation of this technology by the banks was extended to March 31, 2016.
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