State Speeds Up Recovery Efforts to Uncover Pakistanis’ Hidden Assets Abroad

Posted on Posted inBE2C2

SEP 2, 2018 (BE2C2): The State has proposed a Joint Task Force (JTF) comprising representatives of the FIA, NAB, FBR and other agencies to bring back alleged ill-gotten money of Pakistani citizens stashed abroad estimated to be in the range of US$350 billion to US$500 billion.

The country’s central bank –State Bank of Pakistan (SBP), is said to have already submitted the terms of reference (ToR) for the assets’ recovery before the Supreme Court, days before the Sept 3 deadline set by the latter.

The court had asked a committee on August 7 to submit a report by the deadline for achieving the objectives of suo motu proceedings.

The chief justice of Pakistan (CJP) had formed the committee to prepare terms of reference (ToRs) that can help the government recover money smuggled out of the country and stored in foreign accounts. It had also formed on March 26 a committee of 12 experts with insight into the process of accumulation of undeclared foreign assets by Pakistani citizens.

The terms were filed by a standing committee — initially constituted by the Chief Justice of Pakistan as a three-member committee — on Saturday in a suo motu hearing of the case regarding undisclosed foreign assets held abroad by Pakistani citizens.

According to the ToR, the committee will initially proceed based on information available with the Federal Investigative Agency (FIA) about assets of Pakistani citizens in UAE. It will also review the information available with the FBR regarding assets of Pakistani citizens in the UK obtained under the OECD multilateral convention — On Sept 1, Pakistan became signatory to the OECD multilateral convention which allows state of Pakistan to interact bilatrally with 160 member countries on money-laundering and tax evasion, etc.  by individuals.

Discussing with PKonweb/BE2C2 on Twitter, Mr. Taimur Malik, lawyer and Founder Courting The Law, said, “Pakistan, like some other countries, can indeed recover illegally obtained money and assets abroad. However, this effort will require obtaining convictions of corrupt persons in Pakistan first before foreign Courts can be approached for freezing their assets. This means that the Pakistani authorities first need to prove and show to foreign authorities that the relevant assets had been obtained through illegal means. In the meantime, Pakistan should make efforts to trace assets and bank accounts as well as strengthen its mutual legal assistance treaties with relevant countries.”

The committee constituted to take appropriate action for the recovery of undisclosed foreign assets comprises the following:

Governor, State Bank of Pakistan
Secretary Finance, Government of Pakistan
Secretary, Ministry of Interior, Government of Pakistan
Chairman, Federal Board of Revenue (FBR)
Deputy Chairman, National Accountability Bureau (NAB)
Director General, Federal Investigation Agency (FIA)
Chairman, Securities and Exchange Commission of Pakistan (SECP)
A representative of Intelligence Bureau (IB)
A representative of Ministry of Foreign Affairs (MoFA)

The task force, based on the ToRs submitted in the SC, will proceed in the following manner:

It will summon the persons identified by the committee for personal hearings. Failure to appear before the JTF will result in the names of the evaders being submitted to the SC in the committee’s monthly reports.

The persons appearing before the JIT will be asked to confirm if they or their dependents own reported foreign assets. Otherwise, they must submit an affidavit testifying that the said assets do not belong to them.

In the event of the submission of such an affidavit, the FIA or relevant agency will approach the concerned authorities to initiate proceedings under anti-money laundering legislations, Benami Transactions (Prohibition) Act, 2017 or any other relevant law.

If ownership of the foreign assets is acknowledged by the persons under inquiry, details about the sources of funds and whether the assets have been declared in wealth statements will have to be provided.

If the sources of funds are found to be legitimate, but either due tax was not paid or the assets were not duly declared, the FBR will levy and recover the due tax from such persons.

In cases where the funds cannot be traced back to legitimate sources or the persons are unable to explain the sources used to acquire the funds, the JTF will ask the relevant law enforcement agency to pursue such cases. If it is established that the assets were acquired from proceeds of crime, the law enforcement agency may initiate proceedings to confiscate such assets.

The next hearing is due to take place on Monday.

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