FIA digs out 2,750 properties in UAE

Hidden wealth of Pakistanis, Apex court seeks names of those having undisclosed assets in UK

2018-09-04T02:02:40+05:00 Syed Sabeehul Hussnain

ISLAMABAD - The Supreme Court on Monday was informed that FIA had found 2,750 undisclosed properties of Pakistani nationals in UAE.

A three-judge bench headed by Chief Justice Mian Saqib Nisar and Justice Umar Ata Bandial and Justice Ijazul Ahsan heard the suo motu case pertaining to Pakistanis’ assets stashed abroad without disclosing the same in the home country.

The court directed Federal Board of Revenue to submit, in a sealed envelope, the names of those issued notices on account of having undisclosed assets in the United Kingdom.

The total number of 225 persons having assets in the UK without disclosing the same in Pakistan was issued notices by FBR.

The top court also observed the Registrar and FBR would be responsible if these 225 names were leaked.

The court also directed the Standing Committee constituted by the court for recovery of money to submit the outcome of the task force meeting headed by the prime minister tomorrow.

According to the executive summary by Standing Committee of the Supreme Court on the matter, Federal Investigation Agency (FIA) has till to date taken cognizance of 2,750 undisclosed properties and apartments of Pakistani nationals held in UAE in various names and inquiries are underway.

According to the FIA, if each property is valued at a conservative estimate of Rs40 million each (average), the value of UAE assets under inquiry with the Agency comes to Rs110 billion, which is only 2.5 per cent of total estimated undisclosed assets Rs4,240 billion in UAE only.

“A deep dive into the records of Real Estate Regulatory Agency of Dubai Land Department will be required to fathom the true magnitude of assets held in UAE,” it added.

“662 undeclared properties of Pakistani nationals in UAE are based on 1st source report. FIA’s anti-corruption wing has instituted 54 criminal inquiries under Foreign Assets Declaration Regulations 1972 against 662 out of 3,549 property holders,” it added.

“However these inquiries were stalled due to non-provision of record by the Real Estate Regulatory Agency of Dubai Land Department, and subsequently by the Tax Amnesty Scheme 2018, regulated by Foreign Assets (Declaration and Repatriation) Ordinance 2018,” the summary stated, adding that the inquiries had been re-initiated.

“621 undeclared properties of Pakistani nationals in UAE are based on 2nd source report. FIA’s anti-corruption wing has instituted further criminal inquiries last week under Foreign Assets Declaration Regulations 1972 against 621 UAE properties discovered,” it added.

It said that 1,467 undeclared properties of Pakistani nationals in UAE are based on Cyber-Intelligence Report. Lately, FIA’s cyber crime wing through its cyber-intelligence has deciphered Pakistani owner identities of 1,467 properties in Dubai and the findings are being transmitted to zones/ field offices for initiating inquiries. The findings of these inquiries will be submitted before the court in due course.

The summary also revealed that the British government had listed Pakistan among top three money laundering source countries after Nigeria and Russia. 

It is imperative that this Standing Committee makes an assessment of the total Pakistani money stashed in foreign assets and accounts.

It added that by the close of Amnesty Scheme 2018, till July 31, 2018, declarations from 5,363 entities had revealed foreign assets worth Rs1,003 billion, ($8.1 billion), with major share of declared assets located in UAE. Asset holders in other tax-haven countries benefitted only marginally from this scheme.

The bench during the hearing, however, expressed its dissatisfaction with the amount of money recovered through Amnesty Scheme 2018.

“The Amnesty Scheme set a two per cent tax which was very less. Indonesia has set a 17 per cent tax hence the scheme has been successful there,” Justice Bandial observed. 

According to the summary, reasons for poor control over money laundering and difficulties in investigation are weak legislative instruments at domestic level, Legislative Instruments which are hurdles in international limitations, and missing Essential Investigation Tools.

Regarding the top tax heavens, no official estimates available, according to the summary.

“UK, USA, EU (Estimated $100 billion plus parked in real estate sectors, Shabbar Zaidi AF Ferguson, Pakistan Business Council Seminar). Switzerland ($200 billion as per statement of Micheline Calmy-Rey/ Swiss Foreign Minister in 2014). Hong Kong, BVI, Bahamas, Channel Island, Seychelles etc. act as hosts for corporate vehicles involved in money laundering,” the summary stated.

However, it added, no official figures are assessed or formulated vis-à-vis the monies stashed in properties and accounts abroad.

“Estimates regarding outflow of money can be made by examining foreign currency accounts’ outflow, and probing Electronic Transfers through other means.”

During the course of hearing, the bench was also informed that Pakistanis owned around $150 billion worth of properties and assets in the UAE alone.

This was stated in a report compiled and submitted in court by chartered accountancy firm A.F. Ferguson Shabbar Zaidi.

Chief justice asked if such a hefty amount was still parked abroad despite amnesty scheme. He further asked about the way of identification of a person who transferred the money legally and through Hawala.

We are targeting those who earned from Pakistan and then transferred through illegal means, he added.

Justice Bandial observed that the proposed ToRs were so mild and according to the ToRs those identified would be imposed tax.

“This is not the issue. The issue is transfer of money illegally which is an offence and they should be penalised for they were hiding their assets,” observed Justice Bandial.  

He further asked the regarding the progress. Justice Ahsan observed no progress.

State Bank of Pakistan (SBP) Governor Tariq Bajwa briefed the apex court on measures taken to recover the identified funds.

He said that notices had been issued to 225 people who had assets in the UK. He while stating the ToRs said that the involved will be asked to either confirm that they or their dependents or spouses own the reported foreign assets or submit an affidavit that the said assets do not belong to them. “Where such an affidavit is submitted, the FIA or the relevant agency will approach relevant authorities informing them that the reported owners of certain assets have, on affidavit, denied their ownership.”

He added that the authorities could also take the help of the UAE government and ask them to take action in accordance with benami properties law.”

Shabbar Zaidi informed that bench that wealth was transferred outside Pakistan via Hawala and banking routes.

Justice Bandial asked the SBP governor if a ban had been placed on transferring foreign exchange outside Pakistan. Bajwa submitted that a sum of $10,000 was permitted to be taken outside of Pakistan.

During the hearing, Attorney General for Pakistan (AGP) Anwar Mansoor Khan informed the top court that new government had established a task force for the same purpose through a notification dated 27 August.

He said that government wanted to take the matter in its own way adding the top court should also keep seeking reports from the authorities so that no slackness was shown.

Justice Ahsan observed that from the notification it appeared that government was supplementing the court’s initiative.

Attorney General replied in affirmative and said that the government was determined to recover the money.

The top court while adjourning the hearing for September 5 directed the officials to submit report regarding the outcome of task force meeting with prime minister.

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