Senate Amends Anti Money Laundering Bill, Increasing Fines Up to Rs. 10 Million

The Senate Standing Committee on Finance passed Anti Money Laundering (Amendment) Bill, 2019 on Friday with several recommendations including the increase in fines to ten million rupees and ten years imprisonment for money laundering. This is aimed at streamlining the existing AML law in line with international standards and ensure technical compliance with the Financial Action Task Force (FATF).

The committee met with Senator Farooq H Naik in the chair and observed that there were some errors in the Anti-Money Laundering Bill and has re-submitted for correction.

The National Assembly has prepared some recommendations in this bill. All provisions of the Anti Money Laundering Amendment Bill were reviewed.

The committee, despite the stress of the Finance Ministry, rejected the proposal for arrest without warrant in suspicions of money laundering.

The committee reviewed the recommendations of the National Assembly in detail and approved the amendments and amended Section (4), Section (e) (4) 6, Section (1) 7 and (4) 7, Section (1) 8, Section (5) 9, Section 21, Section (3) 21, section 33 and section (2) 34.

DG Financial Monitoring Unit (FMU) said that amendments need to be in accordance with FATF’s requirements as it would serve as technical compliance. If the amendments do not comply with the FATIF recommendations, there may be problems, said FMU official, adding that the time is approaching for the actions’ implementation and the legislation needs to be done.

Senator Sherry Rehman objected on why did the government commit before the passage of legislation from the parliament.

According to the federal government, the proposed amendments in the Anti-Money Laundering (Amendment) Bill, 2019 “aim at streamlining the existing AML law in line with international standards and suggest enhancing the punishment of offense of money laundering to make it more dissuasive and deterrent.”

The amendments suggest making the offense punishable under the AML Act, 2010 a ‘cognizable offense.’ These amendments will also allow the Financial Monitoring Unit to seek Egmont Group Membership (Group of Financial Intelligence Unit) which is the requirement under the Financial Action Task Force Recommendations. However, the committee rejected the proposal and recommended the offense will be non-cognizable. Three members including Shibli Faraz, Mohsin Aziz and Anwar Ul Haq Kakar gave the descending notes while proposing it needs to be cognizable.

The committee approved the proposal for an increase in fines on money laundering from five million to ten million, as well as extended imprisonment to ten years. Further suspicious transaction report data was proposed to be kept for ten years instead of five years.

The committee further approved an amendment about the attachment of property involved in money laundering:

An investigating officer may, on the basis of the report in his possession received from the concerned, investigating if prosecuting agency by order in writing with prior permission of the court, provisionally attach a property which he reasonably believed to be the property involved in money laundering for a period not exceeding one hundred and eighty-days from the date of the order, provided that the court may grant further extension for a period up to one year.

The committee recommended that the police officer will not be able to arrest people suspected of money laundering without a magistrate or without a warrant. Such a law is to empower investigative agencies, said Aisha Farooq. Concerns need to be made but the law is tight, said Anwarul Haq Kakar. Do not give restraint to the investigating agencies, said Dilawar Khan. Senator Talha Mahmood said that giving investigative agencies more authority would be a misuse.

Senator Aisha Raza Farooq asked why such a strong recommendation from the FATF is there. Shibli Faraz asked what steps the Ministry of Finance is taking to prevent hawala and hundi. FMU and investigating agencies to investigate money laundering, proposed in the bill. The committee also rejected the recommendation of the investigating agencies with FMU and recommended that only FMU would investigate it.

“Can this bill be removed from the gray list if the bill is approved with amendments?” said Aisha Raza Farooq. The FMU official said that it is technical compliance with the FATF.

The committee passed the Anti-Money Laundering bill with amendments.

Leaders of the Senate Senate Syed Shibley Faraz, Senators Mohsin Aziz, Anwar-ul-Haq Kakar, Dilawar Khan, Mushahidullah Khan, Ayesha Raza Farooq, Sherry Rehman, and Mohammad Talha Mahmood, besides Secretary of the Finance, DG State Bank, were present in the committee meeting today. BR, Director FIA, Additional Secretary Finance and other officials attended.