Amendments to Foreign Exchange Regulation Act: Senate body rejects ban on movement of $10,000 within country

ISLAMABAD: The Senate Standing Committee on Finance has unanimously rejected restriction on movement of foreign currency of $10,000 within the country under amendments into Foreign Exchange Regulation Act (FERA).

However, the Senate panel recommended imprisonment from one to ten years and penalty amount from Rs1 million to Rs5 million on proving charges of money laundering against imprisonment of 10 years and fine of Rs5 million proposed into bill under amendments into Anti-Money Laundering Act (AML) in line with the FATF conditions.

With these amendments into FERA and AML if approved by the Upper House of Parliament (Senate of Pakistan), then the laws would be sent again to the National Assembly so the passage of approval for converting bills into acts of Parliament would take much longer time.

On other hand, Pakistan is all set for making efforts to convince FATF in its upcoming face to face meeting from January 21 to 24 at Beijing and then plenary meeting next month at Paris to come out from grey list. The Finance Ministry and SBP officials tried to convince the members of Upper House of Parliament to pass these bills without any further amendments but the members unanimously rejected restriction on movement of $10,000 within the country. The Senate Standing Committee on Finance and Revenues held its meeting under Chairmanship of Senator Farooq H Naek here at the Parliament House on Tuesday. The Finance Ministry and SBP high-ups made all out efforts to convince the parliamentarians that the amendments into FERA and AML were aimed at to comply with the FATF conditions but despite their insistence the members unanimously rejected restriction on movement of foreign currency of $10,000 within the country. While briefing the Senate panel, the Secretary Finance Naveed Kamran Baloch said that there was no fair system as the FATF had put Pakistan into grey list while Afghanistan was in white list. “We don’t have any choice but to comply with FATF conditions. The FATF is political issue and it is related to the country so the committee should approve without considering legal technicalities” he added.

The chairman of Senate Panel Farooq H Naek said that the FATF had not recommended increasing punishment because it did not help overcoming crimes.

Senator Shibli Faraz said that if these laws were approved whether Pakistan would be excluded from grey list. He said that he did not want to see that these laws were approved but the country kept into grey list under FATF mechanism.

Senator Ayesha Raza said that the country wanted to come out from grey list but these amendments should not become as tool for using against innocent people of this country. The newly appointed DG FIA Wajid Zia admitted that the misuse of authority was committed at time of apprehending any accused and stated that money laundering was complex issue and it required more time for thorough investigations.

The agenda presented before the Committee included a bill further to amend the Foreign Exchange Regulation Act, 1947 (The Foreign Exchange Regulation (Amendment) Bill, 2019) and a Bill further to amend the Anti-Money Laundering Act 2010 (The Anti-Money Laundering (Amendment) Bill 2019). The Committee was briefed on the FATF Action Plan and legal amendments. It was asserted that all amendments were in line with FATF recommendations and if enactment takes place before the scheduled meetings it would strengthen Pakistan’s compliance position.

The committee considered the amendments clause by clause and approved some of them without amendments. Some amendments were rejected right away while some were approved partly. The committee expressed serious concern over the restriction of carrying $10, 000 within the country and rejected the amendment unanimously.