Refusing to accept the condition of carrying more than US $10,000 foreign currency within the country with prior permission of the State Bank of Pakistan, the Senate Standing Committee on Finance Tuesday cleared amendments to the Anti-Money Laundering (AML) Act 2010 and the Foreign Exchange Regulation Act (FERA), 1947 to meet the Financial Action Task Force (FATF) conditions.
A meeting of the Senate Standing Committee on Finance chaired by Senator Farooq H Naek was requested by the secretary finance and other senior officials of Finance Ministry and State Bank of Pakistan (SBP) to approve the proposed amendment that if anybody wants to carry more than $10,000 within the country, he would require permission from the SBP. However, the committee did not approve their request.
Secretary Finance Naveed Kamran Baloch stated that Pakistan will have issue with the FATF if this amendment is not approved. The insertion of section 8A in the FERA that any person would be free to move or transfer foreign currency up to a maximum of $10,000 physically or otherwise within Pakistan and inland movement exceeding the above amount would require prior permission of the State Bank of Pakistan was turned down by committee.
The secretary finance also acknowledged political aspect in the FATF and stated this is not a white world as Afghanistan is not on grey list and urged the committee to look beyond the point of law on the FATF matter as the amendments brought by the government are critical for compliance with Asia Pacific Group (APG).
Baloch tried till last moment to persuade the committee chairman and members to approve the proposed amendment that any person would be free to move or transfer foreign currency up to a maximum of $10,000 but his efforts bore no fruit and committee unanimously rejected the amendment.
They added cash transfer through Hawala/Hundi is critical for Pakistan risk assessment because cash movement and Hawala/Hundi are being used for terrorism. The secretary finance urged the committee to increase the limit of the foreign currency movement within the country but not to reject the amendment outrightly but the committee was of the view that it would be misused against any individual.
The committee also made some changes in the proposed amendment by the Ministry of Finance for punishment of ten years as "from one year to ten years" and five million rupees fine as "from one million to five million rupees" whereas making the offense as cognizable was approved with majority votes despite chairman and Pakistan Peoples Party's senator opposition. The chairman of the committee stated if this offence becomes cognizable then anyone can be arrested. Some members wondered if this legislation is so urgent then why the government has brought it to the Senate committee so late.
The committee was briefed on the FATF Action Plan and legal amendments and it was asserted that all amendments were in line with FATF recommendations and if enactment takes place before the scheduled meeting, it would strengthen Pakistan's compliance position.
The committee considered the amendments clause by clause and approved some of them without amendments. Some amendments were rejected right away while some were approved partly.
The meeting was attended by Senator Syed Shibli Faraz, Senator Mohsin Aziz, Senator Mian Muhammad Ateeq Shaikh, Senator Muhammad Akram, Senator Sherry Rehman, Senator Ayesha Raza Farooq, Senator Imam-ud-Din Shouqeen, Senator Anwar ul Haq Kakar, Senator Dilawar Khan and senior officers from the Ministry of Finance, Revenue and Economic Affairs, along with all concerned.