UAE, Malaysia refuse to share information of assets owned by Pakistanis

ISLAMABAD: FBR Chairman Shabbar Zaidi  admitted before the parliamentarians on Thursday that the money remitted out from Pakistan and creation of any assets abroad could not be termed “illegal” as it was protected under foreign currency accounts ordinance 2001.

“It is the official view of myself and FBR that the legal money sending abroad and purchase of assets is allowed and cannot be termed illegal,” Shabbar Zaidi testified before the National Assembly’s Standing Committee on Finance and Revenue that met under Chairmanship of Asad Umar here at the Parliament House on Thursday.

He told the committee that the UAE was not sharing information about the Iqama holders of Pakistan while Malaysia was also not sharing information. He said that the OECD had extended support to Pakistan’s stance but the UAE was unwilling to share the requested information.

The NA committee showed its complete dissatisfaction over the probe undertaken by the FBR. The NA panel chairman said that there was a need to further explain whether the legal money sending abroad was legal or illegal because the State Bank of Pakistan (SBP) did not agree to what the FBR chairman argued here.

The sharing of information from top officials of the FBR shocked parliamentarians irrespective of political divide as NA panel Chairman Asad Umar described that it showed “elite culture” prevailing in the country. When the NA panel chairman inquired whether any name of politicians existed in biggest 325 cases for owning up to $1 million outof received data from OECD mechanism, the FBR chairman said that no name included in this list. However, the FBR’s DG International Taxes said that there were a few of them who were beneficial owner. But when pressed upon, the FBR high-ups told the committee that there was no one from public office holders who availed himself of amnesty scheme because they were barred.

Asad Umar said that there were total assets of $5.5 billion stashed abroad that translated into rupee to the tune of Rs800 billion out of which the FBR received just meager amount. PML-N MNA Ayesha Ghous Pasha said that she was shocked to hear such startling disclosure as the amnesty schemes were offered in shape of platter so there was no justification to take action against those who possessed small amounts. When members pressed upon the FBR over dismal performance, NA panel chairman said that to be fair with the FBR they had just received this data under OCED mechanism.

The FBR’s Director General International Taxes Mohammad Ashfaque informed the NA panel that they received data about 57,550 under OECD cooperation mechanism.

Out of 325 biggest cases where the income stands at up to $1 million, there were 135 individuals who had availed themselves of amnesty scheme offered in tax year 2018 for whitening of Rs62.335 billion with payment of tax amount of Rs2.8 billion. There were 56 cases, which availed themselves of amnesty scheme in tax year 2019 for whitening of Rs31.7 billion with tax paid amount of Rs1.6 billion. The FBR has assessed remaining cases of 115 and slapped tax of Rs4 billion out of which so far recovered tax amount was just Rs1 billion, the FBR’s DG International Taxes added.

So in shape of two amnesty schemes and tax recovery the total collected amount of FBR stood at just Rs5.5 billion.

The FBR told the committee that the FBR selected 1,655 cases where income abroad ranged $1,000 to $100,000 out of which the FBR assigned 378 cases to commissioners for making assessments.

The FBR has now received new data from 45 jurisdictions but its information is not fully readable due to technical hitches. The FBR has also shared its data with 55 countries under OECD mechanism.

Meanwhile, Federal Minister for Economic Affairs Hammad Azhar told the MPs that the Financial Action Task Force (FATF) might give Pakistan a fresh action plan of one to three-year period if Islamabad could not implement 40 recommendations of Asia Pacific Group (APG) till October 2020.

So FATF’s sword will continue to hang over heads of the county in years to come. The parliamentarians were unanimous that the FATF move seemed “political” in nature and cited example that Afghanistan was not categorised in the grey list of FATF. The NA panel sought presentation on the 5 non-compliant FATF points.

As a result of Mutual Evaluation Report (MER) undertaken by the APG, Pakistan would remain under observation till October 2020, said Hammad Azhar, who is also focal person on Financial Action Task Force related issues in Pakistan. “If we do not fully implement the APG’s recommendations by October next year, a new action plan of one to three years can be given to Pakistan”, said the minister in his opening remarks while briefing the NA panel.

The Director General Financial Monitoring Unit (FMU) informed the panel that out of 27-point action plan Pakistan made progress on 22 points. Now the country would have to submit its compliance report till first week of January 2020 and the FATF would review progress in February 2020 to decide about the fate of grey list.

When the parliamentarians insisted upon authorities to share those points where the FATF declared non- compliant, the DG FMU said that the FATF considered cash courier clause of FBR’s customs as non-compliant, which was part of immediate outcome (IO) 8 of the action plan. Asad Rizvi, who leads FATF’s Customs Cell in FBR, said that the FBR seized cases of cash courier of smuggling in order to detect element of terror financing and now they forwarded 14 cases to CTD and 8 cases to FIA as it would help achieve conviction of those involved in such crimes.

The DG FMU said that there were other 4 points of action plan on which the FATF declared as non-compliant related to law enforcing agencies for ensuring coordination for achieving effective investigation, prosecution and convictions. “So far Pakistan has taken over 1,000 assets of proscribed outfits,” he said and informed that FATF wanted to see mechanism for tackling these seized assets.

NA panel Chairman Asad Umar said that Pakistan made progress for preparation of Risk Assessment Framework, placing regulatory regime effective and now effective action through improved coordination to ensure conviction of those involved in such heinous crimes. PTI MNA Ramesh Kumar said that there was need to take action against Non-Profit Organisations (NPOs), which were allegedly involved in money laundering and terror financing. He asked the government to launch vigorous diplomatic campaign in order to muster up support for Pakistan in international forums like FATF.

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