AML Bill - time to be bipartisan

The Anti-money Laundering (AML) Bill has remained stuck in the Senate Standing Committee on Finance since February this year. The opposition, which has the majority in the upper house, is not letting it go through because of its misplaced fears that it would be misused by the Federal Board of Revenue to harass politicians. Specifically, it is opposed to the inclusion of some of the provisions of the Income Tax Ordinance in the ambit of the AML Act.

The size of the informal economy in Pakistan is said to be equal to that of the formal economy. And it is expanding by the day mainly because of rampant tax evasion and avoidance that has been going on unchecked in the country since long. In such an environment, it is almost impossible to curb financial corruption, money laundering and terror financing. Most disturbing of all, money laundering fuels corruption. Terrorist groups use money-laundering channels to get cash to buy arms. The social consequences of allowing these groups to launder money can be disastrous.

Taking the proceeds of crimes from tax evaders, corrupt public officials, traffickers and organised crime groups is one of the best ways to stop criminals in their tracks. So, any law that is enacted to curb these crimes would find it almost impossible to avoid bringing under its ambit tax-related crimes. And since legislating such a law is in the national interest because of its potential to curb tax evasion and avoidance, which in turn would surely reduce our dependence on foreign and local loans, it would be only appropriate for the opposition to approach the issue on a bipartisan basis. Also, enacting such a law is one of the IMF conditions attached to our current three-year Fund programme. To standardise such a law across the world, the IMF and the UN Office on Drugs and Crimes developed, in 2005, a model piece of legislation on money laundering and financing of terrorism. We doubt if any law that does not hold up to laid-down UN-IMF standards would be effective enough to achieve the objectives for which the law is being framed in the first place. The opposition needs to rethink its stance on the Bill.

Published in The Express Tribune, October 26th, 2015.

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