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September 6, 2018

Asset recovery unit to target 100 biggest owners of offshore assets

Top Story

September 6, 2018

ISLAMABAD: The Prime Minister’s Task Force on the retrieval of wealth illegally stashed overseas by Pakistan has recommended the formation of an asset recovery unit to move against the 100 biggest owners of offshore money and properties.

The assets recovery unit would be located at the Prime Minister’s (PM) Office and comprise representatives of the National Accountability Bureau, Federal Investigation Agency, State Bank of Pakistan and Federal Board of Revenue (FBR) to ensure coordination between government agencies.

In compliance with the directives of the Supreme Court, the Pakistan Tehreek-i-Insaf (PTI) government wants to select around 100 major cases to establish a precedent whereby efforts would be made to repatriate illegal wealth through the mutual legal assistance track of the OECD agreement.

It would also seek to bring home non-taxed income and proceeds of corruption through the enforcement of avoidance of double taxation agreements with various countries.

The PM's task force recommended that the asset recovery unit be formed on the lines of the joint investigation team which probed the Panama Papers case on the directives of the apex court.

However, independent experts believe that the PTI-led government would have to institute major changes in taxation laws, anti-money laundering regulations, and the Protection of Economic Reforms Act 1992 to expedite the return of illegal assets loosely estimated to be worth $200 billion.

Prime Minister Imran Khan constituted the task force, headed by Barrister Shahzad Akbar, to recommend ways and means of repatriating illegal wealth either stashed in foreign banks or turned into assets around the world.

Without providing legal cover for stern action, such as the suspension of Computerised National Identity Cards and machine-readable passports, it would not be an easy task, official sources said.

Under existing tax laws, the FBR can issue a tax notice to an unregistered person and, in case of non-compliance, possesses powers to generate a tax demand notice. Then an ex parte assessment can be carried out, eventually leading to the prosecution and arrest of the violator.

However, it is unclear how the FBR would expedite such orders against individuals possessing assets in overseas jurisdictions. Any action which fails to take into account the applicable foreign laws would be a waste of time and money, the official sources said.

The chairman of PM’s Task Force, Barrister Shahzad Akbar, told The News he had briefed the federal cabinet about the situation and recommended the establishment of the asset recovery unit at the PM Office to ensure inter-departmental coordination in achieving the desired objectives. He said that the task force has also submitted its recommendations on bringing back offshore wealth to the Supreme Court.

Shahzad said the task force had not recommended changes in laws, because the job could be performed through improved inter-departmental coordination. The representation of four major agencies in the asset recovery unit would amicably resolve any issues. With the full backing of the Prime Minister, corrupt individuals could not resort to dillydallying tactics, he said.

Shahzad said that the legal framework provided by existing NAB laws had already led to the recovery of $22 million from abroad. He said that tax-related issues would be dealt by the FBR and the enforcement of the OECD agreement from September onward would make it difficult to hide assets abroad.

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