The National Assembly has passed a bill to amend the Foreign Exchange Regulation Act 1947 to regulate foreign exchange. The Assembly also approved another bill to enhance punishment for money laundering.
Minister of State for Parliamentary Affairs Ali Muhammad Khan moved the Foreign Exchange Regulation (Amendment) Bill 2019 to amend the Foreign Exchange Regulation Act 1947, and the bill was passed by the assembly through vocal voting.
The foreign exchange policy and operations in Pakistan are governed under the provisions of Foreign Exchange Act, 1947 (FERA 1947) which empowered the State Bank of Pakistan to regulate flows of foreign exchange into and out of the country.
However, the State Bank of Pakistan did not have the explicit powers under FERA 1947 to issue any regulation and instruction to the inland movement of foreign currency.
The bill toughens the punishments in section 23 of FERA, 1947 to increase deterrence against contravention of various provisions of the act. This bill, therefore, seeks to amend FERA 1947 to enable the State Bank of Pakistan to regulate the foreign exchange in Pakistan more comprehensively and make it more effective.
The minister also moved a bill to amend the Anti-Money Laundering (AML) Act 2010, as reported by the Standing Committee, and the house passed this bill as well.
According to the statement of objects and reasons, the bill on anti-money laundering was passed to bring improvements in the anti-money laundering act 2010, in line with suggestions of AML/CFT stakeholders, particularly law enforcement agencies responsible for the enforcement of the AML Act, 2010.
The amendments are aimed at streamlining the existing anti-money laundering law in line with international standards and enhancing the punishment for money laundering to make it more dissuasive.
These amendments will make money laundering a cognizable offense. This will also allow the Financial Monitoring Unit to seek Egmont Group Membership (Group of Financial Intelligence Unit) which is a requirement under the Financial Action Task Force recommendations.