ISLAMABAD - The PML-N government is struggling to pass Anti-Money Laundering (AML) amendment bill from Senate due to the resistance from political parties, as Pakistan committed to IMF to adopt these amendments by November 2015.

“Parliament is discussing draft amendments to the Anti-Money-Laundering Act (AMLA) that will include serious tax crimes in the Schedule of Offenses and enable the use of AML tools to combat tax crimes. We are committed to adopting these amendments by end-November 2015,” Pakistan has stated in a written to the International Monetary Fund.

The government had tabled the Anti-Money Laundering (Amendment) Bill, 2014 in Senate in 2014. However, the government is facing problems in approving the AML amendment bill from the Senate’s Committee on Finance and Revenue due to the stiff opposition from the Pakistan Peoples Party (PPP), Pakistan Tehreek-I-Insaf, Awami National Party (ANP) and Pakistan Muslim League (PML-Q). Opposition parties Senators do not want to bring tax evasion and taxation offences into the ambit of AML.

On the other hand, the government is not withdrawing the clause of tax evasion and taxation offences from AML following the commitments made with the IMF and other financial institutions. The government is working to improve the anti-money laundering and combating the financing of terrorism (AML/CFT) legal framework. Draft amendments to the AML Act that will include serious tax crimes in the Schedule of Offenses and enable the use of AML tools to combat tax crimes, said the IMF report issued last week.

The Senate’s Standing Committee on Finance and Revenue had held several meetings on discussing the AML amendment bill but failed to make consensus on the bill. The Senate’s body had shown agreement on including ‘tax fraud’ in AML amendment bill. The list of fiscal offenses for inclusion into AML was reduced from 26 to 9 and then the government agreed to proposal of the committee to further reduces the list to major tax frauds including income tax, sales tax and federal excise duty. The committee also asked to consult Financial Monitoring Unit (FMU) before framing charges under AML amendments.

Secretary Finance Dr Waqar Masood had tried his level best to convince the members to approve the AML bill in the committee meeting held on October 8 2015. However, the parliamentary committee refused to approve Anti-Money Laundering (AML) amendment bill and decided to call representatives of business community, tax bars and other stakeholders to finalise list of financial crimes which can be tried under AML, having far reaching implication internationally who will be charged under it. The committee would meet next week to make further deliberations on the Bill.

Pakistan and the IMF also agreed that, once the amendments of AML are adopted, there is a need to upgrade the regulatory framework to mitigate ML/FT risks, including with regards to the proceeds of corruption and tax crimes. The IMF encouraged the authorities to ensure the Financial Monitoring Unit’s access to asset declarations of public officials, and to provide guidelines to banks on the manner of reporting suspicious transactions related to tax evasion. The authorities should also continue strengthening their CFT framework, including by implementing relevant United Nations Security Council Resolutions (UNSCRs) to effectively freeze terrorist assets.