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Pakistan bound to upgrade anti-money laundering laws

* SBP says country to be declared high-risk if law not upgraded by Feb 2010 g PML-N, PML-Q demand new law

By Sajid Chaudhry

ISLAMABAD: Pakistan has already been issued a final ultimatum and will have to face severe financial penalties from international organisations if the country fails to upgrade its existing anti-money laundering laws before February 2010, the State Bank of Pakistan (SBP) told the National Assembly Standing Committee on Finance on Friday.

In case of failure to do the same, Pakistan would be declared a high-risk country, SPB officials said.

They said as a result, the country’s letter of credit (LC) would not be honoured abroad and there would be difficulties in international trade.

The standing committee was told that despite warnings by the Asia Pacific Group on Money Laundering, which is an associate member of the Financial Action Task Force, Pakistan had not upgraded its existing money laundry bill.

Officials belonging to the Finance Ministry, Law Ministry and the SBP informed committee members that Pakistan was a signatory to various UN conventions that required laws in line with international standards to combat money laundering and terrorism financing. The committee was also informed the existing Anti-Money Laundering Ordinance, 2007 would expire on November 28.

“If the required up-gradations are not made by that time, then anti-money laundering regulations would be non-existent in the country,” Finance Secretary Salman Siddique told the committee. However, the committee, chaired by Pakistan People’s Party leader Fauzia Wahab, remained confused over the amendments and decided to postpone the matter until the next meeting on October 27. “We need to promulgate a new anti-money laundering law in the country,” said Pakistan Muslim League-Nawaz’s (PML-N) Khawaja Asif. Pakistan Muslim League-Quaid’s (PML-Q) Kashmala Tariq said the anti-money laundering ordinance was a controversial document and had even been opposed by the current treasury.

New law: PML-N and PML-Q members demanded the amendments be scrapped and a new consolidated anti-money laundering bill formulated.

The SBP officials said the government had to take the matter seriously as failing to meet the anti-money laundering requirements would result in serious implications for Pakistan.

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