hold of the black money held abroad. A new section is proposed to be inserted in the subject of “assets held outside Pakistan in contravention of Fera”. It provides that if any person holds any foreign exchange, foreign security or any immovable property outside Pakistan, the equivalent value of property in Pakistan can be seized. Prescribed procedure has to be followed for the seizure.
When a person is holding assets in a tax haven in violation of Fera and “Tax Haven Government” and its banks may not co-operate, the enforcement officer will have the power to seize Pakistani assets.
This power of seizure under Fera is in addition to the penal action under Income tax Ordinance 2001 and penal action under FERA. This provision is drastic. It provides that if the authorised officer has “reason to believe” that the foreign asset is “suspected to have been held in contravention of Fera …” the consequences of seizure will follow.
Experts say any penal consequence should follow if the contravention is proved. One cannot seize property if an officer has mere “reason to believe” and he just suspects a contravention. Penal consequences should follow only after the contravention is established.
Such differences of interpretation should not lead to a suspicion or conclusion that it is a contravention; and it should not lead to seizure of property, they said. The seizure rules should apply only in case of serious contraventions like hawala transactions. It may be noted that the phrase “Reason to Believe” has not been considered judicially. It cannot be a mere suspicion by the officer. He must have a valid reason; and the information for the reason should be on his file when he passed the order, they said.
The provisions of Anti-Money Laundering Act 2010 are far more stringent than Fera. However, Anti- Money Laundering Act 2010 also provides that property can be seized provisionally. Only after the crime in respect of which the guilt is established, the seizure becomes final. Till that time, the seizure is not final. Under Fera, there is no such provision additionally under the Income tax Ordinance 2001.