The Finance Ministry stated Monday that there would be serious implications on the country if Financial Action Task Force (FATF) action plan was not complied with, after Senate Standing Committee on Finance put off the approval of the proposed changes in the Anti-Money Laundering (AML) Act 2010 till today (Tuesday).
A meeting of the committee chaired by Senator Farooq H Naek deferred the approval of amendments, seeking demands of the FATF so that the committee can know what is being asked from Pakistan.
The chairman of the committee first adjourned the committee meeting till January 8; however, after an in camera briefing by the officials of Finance Ministry and Financial Monitoring Unit (FMU), he decided to hold the meeting Tuesday (today).
Some members of the committee opposed the restriction for not carrying more than US $10,000 foreign currency within the country as well as enhanced punishment and making the offence cognizable.
The committee also expressed displeasure over absence of the advisor to prime minister on finance and secretary finance, and stated that they should make sure their presence in the committee to brief it on the demands of the FATF.
The committee members stated the government is not sharing everything it agreed with the FATF. Even a treasury member stated that "the committee must know about FATF demands." The meeting was informed that nine amendments are proposed in the AML Act to comply with the FATF requirements.
A senior official of the FMU while giving briefing to the committee stated that there would 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 is approved by the committee before January 10, 2020. Otherwise, he stated that there would be serious implications for the country. "We are already waking on a very tight rope," he added.
Director General FMU Mansoor Ahmed Siddiqui stated that as per latest status, Pakistan is largely complaint to 5 points of action plan of the FATF, partially complaint to 17 and non-complaint to five points. He added that approval of AML Act 2010, Foreign Exchange Regulation Act 1947 as well as Mutual Financial Assistance Law, UNSC Act and Anti Terrorism Act 1997 would increase the country's status and lay off the burden significantly.
He added that Mutual Legal Assistance Law after the approval from the cabinet has been introduced in the Parliament while the UNSC Act and ATA are in the process.
Siddiqui further stated that risk based policy is being prepared by the State Bank of Pakistan (SBP) and SECP for NPOs and INGOs. He added that Pakistan is in the enhanced follow-up process and is, therefore, subject to the quarterly review. The Finance Ministry stated that Pakistan is faced with challenge of illegal trade from Afghanistan in response to Senator Mohsin Aziz's question that the government issued an ordinance without realizing that trade with Afghanistan is cash-based.
Senator Mian Muhammad Attique stated that money changers are draining the country's foreign exchange by collecting foreign exchange across the country and sending it to Peshawar. He further stated that alone in Peshawar there are 750 money changers and the government is not taking action against them. The Finance Ministry official stated that policy with regard to money changers is being prepared.
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