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ANTI MONEY
LAUNDERING ACT, 2010
BY SYED MUHAMMAD IJAZ, FCA, LL.B. ADVOCATE HIGH COURT
PARTNER HUZAIMA IKRAM & IJAZ
Table of contents
 Overview
 AML ACT 2010
 AML-CFT regulations for Banks and DFIs & AML Rules 2008
 AML and Fiscal Statutes
 Bilateral and Reciprocal Agreements
 Benami Transactions (Prohibition) Act, 2017
 Q & A session
Overview
Overview
 Anti-Money Laundering Act, 2010 Act No. VII of 2010
 An Act to provide for prevention of money laundering
 WHEREAS it is expedient to provide for prevention of money laundering, combating financing of
terrorism and forfeiture of property derived from, or involved in, money laundering or financing of
terrorism and for matters connected therewith or incidental thereto;
 Short title, extent and commencement. — (1) This Act may be called the Anti- Money
Laundering Act, 2010.
 It extends to the whole of Pakistan.
 This section shall come into force at once
Overriding And Savings/Validation of
Actions
 39. Act to have overriding effect. — (1) Subject to sub-section (2), the provisions of this Act shall
have effect notwithstanding anything inconsistent contained in any other law for the time being in
force.
 (2) The provisions of this Act shall be in addition to, and not in derogation of, the Anti Narcotics Force
Act, 1997 (III of 1997), the Control of Narcotics Substances Act, 1997 (XXV of 1997), the Anti-terrorism
Act, 1997 (XXVII of 1997) and the National Accountability Ordinance, 1999 (XVIII of 1999) and any
other law relating to predicate offences.
 40. Validation of actions, etc.- Anything done, actions taken, orders passed, instruments made,
notifications issued, agreements made, proceedings initiated, processes or communication issued
powers conferred, assumed or exercised, by the Federal Government, Financial Monitoring Unit or its
officers on or after the 5th January, 2008 and before the commencement of this Act, shall be deemed
to have been validly done, made, issued, taken, initiated, conferred, assumed, and exercised and
provisions of the Act shall have, and shall be deemed always to have had, effect accordingly
AML ACT 2010
Money Laundering
 2(n) “offence of money laundering” has the meaning as defined in section 3;
 3. Offence of money laundering. —A person shall be guilty of offence of money laundering, if the
person: —
 (a) acquires, converts, possesses, uses or transfers property, knowing or having reason to believe that such
property is proceeds of crime;
 (b) conceals or disguises the true nature, origin, location, disposition, movement or ownership of property, knowing
or having reason to believe that such property is proceeds of crime;
 (c) holds or possesses on behalf of any other person any property knowing or having reason to believe that such
property is proceeds of crime; or
 (d) participates in, associates, conspires to commit, attempts to commit, aids, abets, facilitates, or counsels the
commission of the acts specified in clauses (a), (b) and (c).
[Explanation-I.]— The knowledge, intent or purpose required as an element of an offence set forth in this section may be
inferred from factual circumstances in accordance with the Qanun-e-Shahadat Order, 1984 (P.O. 10 of 1984).
[Explanation II.- For the purposes of proving an offence under this section, the conviction of an accused for the respective
predicate offence shall not be required.]
IMPORTANT DEFINITIONS
 2. Definitions. — In this Act, unless there is anything repugnant in the subject or context, —
(o) “person” means an individual, a firm, an entity, an association or a body of individuals, whether incorporated
or not, a company and every other juridical person;
(q) “proceeds of crime” means any property derived or obtained directly or indirectly by any person from the
commission of a predicate offence or a foreign serious offence;
(r) “property” means property or assets of any description, whether corporeal or incorporeal, movable or
immovable, tangible or intangible, and includes deeds and instruments evidencing title to, or interest in, such
property or assets, including cash and monetary instruments, wherever located;
[(ra)“property involved in money laundering” means proceeds of crime, property derived or obtained directly or
indirectly from the offence of money laundering and property used or intended to be used in commission of the
offence of money laundering, a predicate offence or a foreign serious offence;]
(s) “predicate offence” means an offence specified in the Schedule to this Act;
(z) “transfer” means sale, lease, purchase, mortgage, pledge, gift, loan, or any other form of transfer of right,
title, possession or lien.
IMPORTANT DEFINITIONS
 2. Definitions. — In this Act, unless there is anything repugnant in the subject or context, —
(i) “foreign serious offence” means an offence: —
(i) against the law of a foreign State stated in a certificate issued by, or on behalf of, the government of that foreign State;
and
(ii) which, had it occurred in Pakistan, would have constituted a predicate offence;
PREDICATE OFFENCES-THE SCHEDULE
 Section –I The Pakistan Penal Code, 1860 (Act XLV of 1860)
 Section –II The Arms Act, 1878 (XI of 1878)
 Section –III The Foreigners Act, 1946 (XXXI of 1946)
 Section III-A Prevention of Corruption Act, 1947 (II of 1947)**
 Section IIIB Foreign Exchange Regulation Act, 1947 (VII of 1947)-Illegal forex business**
 Section –IV The Copyright Ordinance, 1962 (XXXIV of 1962)
 Section –V The Pakistan Arms Ordinance, 1965 (W.P. Ordinance XX of 1965)
 Section-VIA Securities Act, 2015 (Act III of 2015)***
 Section 122 (Prohibition of Insider trading) read with section 159
 Section 133 (Market Manipulation) read with section 159
PREDICATE OFFENCES-THE SCHEDULE
 Section –VII The Emigration Ordinance, 1979 (XVIII of 1979)
 Section –VIIA**** The Sales Tax Act, 1990
 33 (entries 11 and 13 of Table of Section 33) Offences and Penalties
 Section –VIII The Control of Narcotic Substances Act, 1997 (XXV of 1997)
 Section –IX The Anti-Terrorism Act, 1997 (XXVII of 1997)
 Section –IXA The Pakistan Environmental Protection Act 1997 (XXXIV of 1997)*
 Section -X National Accountability Ordinance, 1999 (XVIII of 1999)
PREDICATE OFFENCES-THE SCHEDULE
 Section –VI The Customs Act, 1969 (IV of 1969)**
 Section 2(s) read with clause 8, 89 of section 156(1)
 Section 15 read with clause 8, 9, 89 & 90 of section 156 (1)
 Section 16 read with clause 8, 9, 89 & 90 of section 156 (1)
 Section 32 read with clause 14 of section 156 (1)
 Section 32A read with clause 14A of section 156(1)
 Section 139 read with clause 70 of section 156 (1)
 Section -XI The Registered Designs Ordinance, 2000 (XLV of 2000)*
PREDICATE OFFENCES-THE SCHEDULE
 Section -XII The Trade Marks Ordinance, 2001 (XIX of 2001)*
 Section – XIIA- The Income Tax Ordinance, 2001*****
 Section 192 (Concealment of Facts in verification) and section 192A (Concealment of Income)
 Section -XIII The Prevention & Control of Human Trafficking Ordinance, 2002 (LIX of 2002)*
 Section XIV The Federal Excise Act, 2005****
 19(3) Offences, penalties, fines and allied matters
* Inserted through SRO No. 3 dated January 8, 2011
** Inserted through Federal Government notification dated 1st April 2015
*** Inserted through Federal Government notification dated 21st December 2015
**** Inserted through Federal Government notification dated 3rd February 2016
***** Inserted through Federal Government notification dated 14-5-2016
Punishment under AML ACT 2010
 4. Punishment for money laundering. —Whoever commits the offence of [money
laundering] shall be punishable with rigorous imprisonment for a term which shall not
be less than one year but may extend to ten years and shall also be liable to fine which
may extend to one million rupees and shall also be liable to forfeiture of property
involved in money laundering or property of corresponding value.
Provided that the aforesaid fine may extend to five million rupees in case of a company
and every director, officer or employee of the company found guilty under this section
shall also be punishable under this section.
Hierarchy under AML Act 2010
FederalGovernment
National Executive
Committee to
Combat ML [NEC]-
Within 30 days of
commencement of
this Act.
General Committee
(GC)
Sub-Committee
(one or more)
Financial Monitoring Unit-FMU
(an independent authority)- to be
housed in SBP and headed by a
Financial Sector Expert with
administrative oversight by GC
Sub-Committees
(one or more)
CONSTITUTION OF AUTHORITIES-NEC
Minister for Finance or Advisor to the Prime Minister on Finance/concerned MinisterChairman
Minister on Foreign AffairsMember
Minister for Law and JusticeMember
Minister for InteriorMember
Governor SBPMember
Chairman SECPMember
Director General (To also act as Secretary of NEC)Member/
any other member to be nominated by the Federal GovernmentMember
CONSTITUTION OF AUTHORITIES-GC
Secretary FinanceChairman
Secretary InteriorMember
Secretary Foreign AffairsMember
Secretary LawMember
Chairman NABMember
Chairman FBRMember
Director General-FIAMember
Director General- Anti Narcotics ForceMember
Deputy Governor SBPMember
Commissioner SECPMember
Director General- FMU (Shall also act as secretary of the GC)Member
(i)any other Member to be nominated by Federal GovernmentMember
POWER/FUNCTIONS/RESPONSIBILITIES
OF COMMITTEES
NEC
•Meet not less than twice a year
•Develop review, implement and oversight strategy to fight ML
and TF
•Determination of offences to be considered as predicate
offence in Pak
•Guidance and sanction in framing rules and regulation
•Make recommendations to FG for implementation of this Act
•Framing National Policy to combat ML and FT
•Discuss issues and issue directions to agencies relating to ML
and TF
•Such other functions assigned by FG
•NEC can delegate or assign its functions to GC or sub-
committees
GC
•Take measures necessary for review and monitoring of
performance of investigation agencies Financial Institutions
and Non Financial businesses
•Review training programs for Government, Fis, NFIs,
professions and other persons relating to ML and TF
•Assistance to NEC in carrying out its functions and duties
•Discuss issues of national importance relating to ML and TF
•Approve FMU budgetary proposals
•Approve FMU staffing requirements, pay, allowances privileges
and compensation packages and incidental matters
•Undertake such other functions as assigned by NEC
FMU
•Receive suspicious transaction reports “STRs/CTRs” from
reporting entities
•Analyze “STRs/CTRs- in this respect FMU can call for record or
information from any agency or person in Pakistan in relation
to transaction in question. All such agencies or person shall
promptly provide the information requested
•Disseminate to other agencies after analyzing STRs and
records for investigation and further actions as per AMLA 2010
or any other applicable law.
•Create/Maintain database for STRs/CTRs and other related
materials
•Coordination and compliance with other international
agencies.
•Submission of annual reports to NEC and GC
•SBP and SECP regulations for ML and TF
•Other functions as may be necessary for the purpose of this
Act.
Reporting, Prosecution/Punishment,
Appeals
Reporting
•Every reporting entity [as defined in 2(u), 2(f), 2(m) and
any other entity as may be designated by FG through
notification in official Gazette- File STRs [if it knows,
suspects or has reason to suspect] that the transaction
or pattern or transactions of which the transaction is a
part;-
•Funds from illegal resources or crime proceeds
•Designed to evade any requirements of this section 7
•Has no apparent lawful purpose
•Involves financing of Terrorism, terrorist acts or
organizations or individuals involved in terrorism
Investigation and prosecution
•Call for information and reports-Authority u/s 7
•Attachment of property involved in ML or TF –section 8,
and seizure under section 14 or 15
•Investigation section 9- 30 days notice is a must for
calling of information and explanations
•Vesting or property in FG section 10
•Power of survey –section 13
•Power to arrest-Section 16-Officer may after obtaining
warrant from the Court or the nearest Judicial
Magistrate arrest such person
•Confiscated or obtained record can be retained for 90
days only unless the court authorizes extended period –
Section 19
Appeals
•Court of Sessions established under the Code of
Criminal Procedure, 1898 (V of 1898) shall, within its
territorial jurisdiction, exercise jurisdiction to try and
adjudicate the offences punishable under this Act and
all matters provided in, related to or arising from this
Act
•23. Appeal to High Court.—Any person aggrieved by
final decision or order of the Court may prefer an
appeal to the High Court within sixty days from the date
of communication of the decision or order on any
question of law or fact arising out of such decision or
order:
•Provided that the High Court may, if it is satisfied that
the appellant was prevented by sufficient cause from
filing the appeal within the said period, allow it to be
submitted within a further period not exceeding sixty
days
Reporting, Prosecution/Punishment,
Appeals
Reporting
• STR not later than 7 working days
• Records to be kept for at least 5 years
• The provisions of section 7 shall have effect
notwithstanding any obligation as to secrecy
under any law or document
• STRs only to be submitted to FMU
• Every reporting entity shall conduct
customers DDs as per requirement of their
regulators
Investigation and prosecution
• Section 21--Notwithstanding anything
contained in the Code of Criminal Procedure,
1898 (Act V of 1898) and subject to sub-
sections (2) and (3),— offences are non-
cognizable and non-bailable
• Court shall take cognizance only on written
request of IO or other officer authorized by
FG, PG or FMU
• Section 22. Application of Code of Criminal
Procedure, 1898 (Act V of 1898) to
proceedings before Courts
Appeals
Other important points-
 36. Notices, etc. not to be invalid on certain grounds.—No notice, summons, order, document or other
proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in
pursuance of any of the provisions of this Act shall be invalid, or shall be deemed to be invalid merely by reason of
any mistake, defect or omission in such notice, summons, order, documents or other proceedings if such notice,
summons, order, document or other proceeding is in substance and effect in conformity with or according to the
intent and purpose of this Act.
 33. Liability for failure to file Suspicious Transaction Report and for providing false information. — (1) -
shall be liable for imprisonment for a term which may extend to three years or with fine which may extend to one hundred
thousand rupees or both
In the case of the conviction of a reporting entity, the concerned regulatory authority may also revoke its licence or
registration or take such other administrative action, as it may deem appropriate
 34. Disclosure of information. — (1) The directors, officers, employees and agents of any reporting entity, financial
institution, non-financial business or profession or intermediary which report a suspicious transaction or STR pursuant to this
law or any other authority, are prohibited from disclosing, directly or indirectly, any person involved in the transaction that the
transaction has been reported.
(2) A violation of the sub-section (1) is a criminal offence and shall be punishable by a maximum term of three years imprisonment
or a fine which may extend to five hundred thousand rupees or both.
Other important points-2
 37. Offences by companies. — (1) Where a person committing a contravention of any of the provisions of
this Act or of any rule, regulation, direction, or order made hereunder is a company, every person who, at
the time the contravention was committed, was responsible for such contravention in the conduct of
the business of company shall be deemed to be guilty of the contravention and shall be liable to be
proceeded against and punished accordingly:
 Provided that nothing contained in this sub-section shall render any such person liable to punishment if he
proves that the contravention took place without his knowledge or that he exercised all due diligence
to prevent such contravention.
 (2) Notwithstanding anything in sub-section (1) where a contravention of any of the provisions of this Act
or of any rule, regulation, direction or order made hereunder has been committed by a company and it is
proved that the contravention has taken place with the consent, connivance or knowledge of any director,
manager, secretary or other officer of any company, such director, manager, secretary or other
officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against
and punished accordingly.
 Explanation. ——For the purposes of this section, “director” in relation to a firm, means a partner in the
firm.
Other important points-3-various powers
 FG has power to amend schedule or any entry therein by notification in official gazette
 FG may in consultation with NEC can make rules by notification in official gazette
 Subject to the supervisions and control of GC the FMU can issue regulations by notification in
official gazette
 For removing difficulty or inconsistencies FG through notification in official gazette can make
such provisions as deem necessary
AML – CFT REGULATIONS
AML-CFT REGULATIONS FOR FIs AND
NON FINANCIAL COMPANIES
 PART - A Definitions
 PART - B Regulations
 Regulation - 1 Customer Due Diligence (CDD)
 Regulation – 2 Correspondent Banking
 Regulation – 3 Wire Transfers/Fund Transfers
 Regulation – 4 Reporting of Transactions (STRs/CTRs)
 Regulation – 5 Record Keeping
 Regulation – 6 Internal Controls, Policies, Compliance, Audit & Training
 Annexure – I Minimum Documents to be obtained from Various Types of Customers under
AML/CFT Regulations
 Annexure – II Examples or Characteristics of Suspicious Transactions (Red Alerts)
AML-CFT REGULATIONS FOR FIs AND
NON FINANCIAL COMPANIES
R1-Customer
DD When CDD measures are to be applied
CDD Measures for Establishing Business Relationship Identification of Customers
Verification of Identity
Identification and Verification of Natural Persons Acting on Behalf of Customer
Identification and Verification of Identity of Beneficial Owners
Information on the Purpose and Intended Nature of Business Relations
Timing of Verification
CDD Measures for Occasional Customers/ Walk-inCustomers and Online Transactions
Where CDD Measures are Not Completed
Ongoing Monitoring
Anonymous or Fictitious Account
Review of Products and services
Joint Accounts
AML-CFT REGULATIONS FOR FIs AND
NON FINANCIAL COMPANIES
R2- Correspondent Banking
• assess the suitability of the respondent
bank
• Clearly understand and document
AML/CFT responsibilities of Banks
• Correspondent Banking-Sr. Management
approval before new relations
• Special attention where cross border
transactions are in areas with poor or no
AML/CFT controls
• Before cross border banking ensuring at
least minimum AML/CFT level controls
• Not relationships with shell banks
R3- Wire Transfers/Fund Transfers
• Responsibility of the Ordering Institution
• Responsibility of the Beneficiary
Institution
• Responsibility of Intermediary Institution
R4-REPORTING OF TRANSACTIONS
(STRs/CTRs)
•Examples and characteristics of some
suspicious transactions (Red Alerts) that
may be a cause for increased scrutiny for
AML/CFT purposes are listed at
‘Annexure-II’.
AML-CFT REGULATIONS FOR FIs AND
NON FINANCIAL COMPANIES
R5- RECORD KEEPING
• Banks/DFI shall keep Sufficient records of
transactions their result and analysis if any
• Record must provide track of individual
transactions with all details necessary to
provide an evidence for any criminal
prosecution
• Identification Records be maintained for
minimum ten years. In case of litigation even
for period exceeding 10 years
• Banks/DFIs shall ensure compliance to
information request by enforcement
agencies/FMU
R6- NTERNAL CONTROLS, POLICIES,
COMPLIANCE, AUDIT AND TRAINING
• Bank/DFIs own AML/CFT policies, procedures
& controls
• Foreign Branches and Subsidiaries
• Compliance
• Audit
• Employee Due Diligence
• Training
Annexure-I-Minimum Documents to be
obtained from Various Types of Customers
under AML/CFT Regulations
•Individuals
• Sole Proprietors
• Partnership
• Limited Companies/ Corporations
• Branch Office or Liaison Office of Foreign
Companies
• Trust, Clubs, Societies and
Associations etc
• NGOs/ NPOs/Charities
• Agents Accounts
• Executors and Administrators
• Minor Accounts
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
 Annexure-II- The Red Alerts- General Comments
 The following are examples or characteristics of possible suspicious transactions for money laundering or
financing of terrorism. This list of situations may be taken as a means of highlighting the basic ways in
which money may be laundered. The examples provided are not exhaustive and may serve only as
guidance of banks/DFIs to recognize suspicious activities.
 While each individual situation may not be sufficient to suggest that money laundering is taking place, a
combination of such situations may be indicative of such a transaction. A customer's declarations
regarding the background of such transactions shall be checked for plausibility and explanation offered by
the customer may be accepted after reasonable scrutiny.
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
Annexure-II- Transactions which do not make economic sense or inconsistent with customer’s business or profile
i) A customer’s relationship having a large number of accounts with the same bank, frequent transfers between different accounts or
exaggeratedly high liquidity;
ii) Transactions in which assets are withdrawn immediately after being deposited, unless the customer's business activities furnish a
plausible reason for immediate withdrawal;
iii) Transactions that cannot be reconciled with the usual activities of the customer, for example, the use of Letters of Credit and other
methods of trade finance to move money between countries where such trade is not consistent with the customer's usual business;
iv) Provision of bank guarantees or indemnities as collateral for loans between third parties that are not in conformity with market
conditions;
v) Unexpected repayment of an overdue credit without any plausible explanation
vi) Back-to-back loans without any identifiable and legally admissible purpose;
vii) Paying in large third party cheques endorsed in favour of the customer;
viii) Substantial increases in deposits of cash or negotiable instruments by a professional firm or company, using client accounts or in-house
company or trust accounts, especially if the deposits are promptly transferred between other client company and trust accounts;
ix) High velocity of funds through an account, i.e., low beginning and ending daily balances, which do not reflect the large volume of funds
flowing through an account;
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
Annexure-II- Transactions which do not make economic sense or inconsistent with customer’s business or
profile
x) Mixing of cash deposits and monetary instruments in an account in which such transactions do not appear to have any relation
to the normal use of the account;
xi) Multiple transactions carried out on the same day at the same branch of a financial institution but with an apparent attempt to
use different tellers;
xii) The structuring of deposits through multiple branches of the same bank or by groups of individuals who enter a single branch
at the same time;
xiii) The deposit or withdrawal of cash in amounts which fall consistently just below identification or reporting thresholds;
xiv) The deposit or withdrawal of multiple monetary instruments at amounts which fall consistently just below identification or
reporting thresholds, if any, particularly if the instruments are sequentially numbered;
xv) Customers making large and frequent deposits but cheques drawn on the accounts are mostly to counter-parties not normally
associated with customer’s business;
xvi) Extensive or increased use of safe deposit facilities that do not appear to be justified by the customer's personal or business
activities;
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
Annexure-II- Transactions which do not make economic sense or inconsistent with customer’s
business or profile
xvii) Goods or services purchased by the business do not match the customer's stated line of business;
xviii)A retail business has dramatically different patterns of currency deposits from similar businesses in the
same general location;
xix)Loans are made for, or are paid on behalf of, a third party with no reasonable explanation;
xx) Suspicious movements of funds occur from one financial institution to another, and then funds are moved
back to the first financial institution.
xxi)The deposit of excess balance in the accounts linked to credit cards/store value cards.
xxii)Unusual pattern of purchase through credit cards/store value cards etc.
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
3. Transactions involving large amounts of cash
i) Exchanging an unusually large amount of small-denominated notes for those of higher denomination;
ii) Purchasing or selling of foreign currencies in substantial amounts by cash settlement despite the customer
having an account with the bank;
iii) Frequent withdrawal of large amounts by means of cheques, including traveler’s cheques;
iv) Large cash withdrawals from a previously dormant/inactive account, or from an account which has just
received an unexpected large credit locally or from abroad;
v) Large cash withdrawals made from a personal or business account not normally associated with customer’s
profile;
vi) Company transactions, both deposits and withdrawals, that are denominated by unusually large amounts of
cash, rather than by way of debits and credits normally associated with the normal commercial operations of the
company, e.g. cheques, letters of credit, bills of exchange, etc;
vii) Depositing cash by means of numerous credit slips by a customer such that the amount of each deposit is not
substantial, but the total of which is substantial;
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
3. Transactions involving large amounts of cash
viii) The deposit of unusually large amounts of cash by a customer to cover requests for bankers' drafts,
money transfers or other negotiable and readily marketable money instruments;
ix) Customers who together, and simultaneously, use separate tellers to conduct large cash transactions or
foreign exchange transactions;
x) Large cash deposits made to the account of an individual or legal entity when the apparent business
activity of the individual or entity would normally be conducted in cheques or other payment instruments
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
4. Transactions involving locations of concern & wire transfers
i) Transactions involving foreign currency exchanges or deposits that are followed within a short time by
wire transfers to locations of specific concern (for example, countries identified by national
authorities/international bodies, UN or FATF etc.);
ii) A personal or business account through which a large number of incoming or outgoing wire transfers
take place without logical business or other economic purpose, particularly when this activity is to, through
or from locations of specific concern (as mentioned above);
iii) The use of multiple accounts to collect and then funnel funds to a small number of foreign beneficiaries,
both individuals and businesses, particularly when these are in locations of specific concern (as mentioned
above);
iv) Obtaining credit instruments or engaging in commercial financial transactions involving movement of
funds to or from locations of specific concern when there appears to be no logical business reasons for
dealing with those locations (as mentioned above);
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
4. Transactions involving locations of concern & wire transfers
v) The opening of accounts of financial institutions from locations of specific concern (as mentioned above);
vi) The business relationships conducted in unusual circumstances e.g. significant unexplained geographic
distance between the bank and the customer;
vii) The receipt of small or large amounts (in cash, using online or otherwise) from various locations from within
the country especially if such deposits are subsequently transferred within a short period out of the account and/or
to a destination not normally associated with the customer;
viii) Substantial increase in cash deposits by a customer without apparent cause, especially if such deposits are
subsequently transferred within a short period out of the account and/or to a destination not normally associated
with the customer;
ix) Building up large balances, not consistent with the known turnover of the customer's business, and
subsequent transfer to account(s) held overseas;
x) Transfer of money abroad by an interim customer in the absence of any legitimate reason;
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
4. Transactions involving locations of concern & wire transfers
xi) Repeated transfers of large amounts of money abroad accompanied by the instruction to pay the beneficiary in cash;
xii) Large and regular payments that cannot be clearly identified as bona fide transactions, from and to countries or geographic
areas identified by credible sources;
• as having significant levels of corruption, or other criminal activity
• as providing funding or support for terrorism activities
• as associated with the production, processing or marketing of narcotics or other illegal drugs etc.
xiii) Wire transfers ordered in small amounts in an apparent effort to avoid triggering identification or reporting requirements;
xiv) Wire transfers to or for an individual where information on the originator, or the person on whose behalf the transaction is
conducted, is not provided with the wire transfer, when the inclusion of such information would be expected;
xv) Use of multiple personal and business accounts or the accounts of non-profit organizations or charities to collect and then
funnel funds immediately or after a short time to a small number of foreign beneficiaries.
xvi) Customer who generally use credit cards/store value cards out of their defined geographical location or locations prone to
money laundering and terrorist financing.
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
5. Transactions involving unidentified parties
i) Provision of collateral by way of pledge or guarantee without any discernible plausible reason by third
parties unknown to the bank and who have no identifiable close relationship with the customer;
ii) Transfer of money to another bank without indication of the beneficiary;
iii) Payment orders with inaccurate information concerning the person placing the orders;
iv) Use of pseudonyms or numbered accounts for effecting commercial transactions by enterprises active in
trade and industry;
v) Customer’s holding in trust of shares in an unlisted company whose activities cannot be ascertained by
the bank;
vi) Customers who wish to maintain a number of trustee or clients' accounts that do not appear consistent
with their type of business, including transactions that involve nominee names.
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
6. Other suspicious accounts or customers
i) Large sums deposited through cheques or otherwise in newly opened accounts which may be suspicious;
ii) The customers who are reluctant to provide minimal information or provide false or misleading information or,
when applying to open an account, provide information that is difficult or expensive for the bank to verify;
iii) An account opened in the name of a moneychanger that receives structured deposits;
iv) Customers whose deposits contain counterfeit notes or forged instruments;
v) An account operated in the name of an offshore company with structured movement of funds;
vi) Accounts that receive relevant periodical deposits and are dormant at other periods. These accounts are then
used in creating a legitimate appearing financial background through which additional fraudulent activities may be
carried out;
vii) A dormant account containing a minimal sum suddenly receives a deposit or series of deposits followed by
daily cash withdrawals that continue until the sum so received has been removed;
viii) An account for which several persons have signature authority, yet these persons appear to have no relation
among each other (either family ties or business relationship);
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
6. Other suspicious accounts or customers
ix) An account opened by a legal entity or an organization that has the same address as other legal entities or organizations but
for which the same person or persons have signature authority, when there is no apparent economic or legal reason for such an
arrangement (for example, individuals serving as company directors for multiple companies headquartered at the same location,
etc.)
x) An account opened in the name of a recently formed legal entity and in which a higher than expected level of deposits are
made in comparison with the income of the promoter of the entity;
xi) An account opened in the name of a legal entity that is believed to be involved in the activities of an association or
foundation whose aims are related to the claims or demands of a terrorism organization;
xii) An account opened in the name of a legal entity, a foundation or an association, which may be linked to a terrorism
organization and that shows movements of funds above the expected level of income;
xiii) Shared address for individuals involved in cash transactions, particularly when the address is also a business location and/or
does not seem to correspond to the stated occupation (for example student, unemployed, self-employed, etc.);
xiv) Stated occupation of the customer is not commensurate with the level or type of activity (for example, a student or an
unemployed individual who receives or sends large numbers of wire transfers, or who makes daily maximum cash withdrawals at
multiple locations over a wide geographic area);
AML-CFT REGULATIONS FOR FIs AND NON
FINANCIAL COMPANIES-RED ALERTS
6. Other suspicious accounts or customers
xv) Regarding non-profit or charitable organizations, financial transactions for which there appears to be no
logical economic purpose or in which there appears to be no link between the stated activity of the organization
and the other parties in the transaction;
xvi) A safe deposit box is opened on behalf of a commercial entity when the business activity of the customer is
unknown or such activity does not appear to justify the use of a safe deposit box;
xvii) Safe deposit boxes are used by individuals who do not reside or work in the institution's service area despite
the availability of such services at an institution closer to them;
xviii) Unexplained inconsistencies arising from the process of identifying or verifying the customer (for example,
regarding previous or current country of residence, country of issue of the passport, countries visited according to
the passport, and documents furnished to confirm name, address and date of birth);
xix) Official embassy business is conducted through personal accounts.
xx) Large deposits on pretext of transfer/disposition of property.
xxi) Frequent and unusual advance payments against imports
AML RULES 2008
1. Interpretations
2. Maintenance of record-IO shall maintain the inventory of record and keep the record till the conclusion of
enquiry
3. FMU can seek co-operation from foreign institutions as a result of bilateral or multilateral agreements
4. Administrator appointed u/s 11 shall keep the record of maintenance, conditions etc. of properties
5. Documents received from outside Pakistan my be assumed to be duly authenticated if it is attested and
signed by the diplomatic representative of that country in Pakistan or Pakistan’s diplomatic representative
in that country.
AML ACT 2010 AND
FISCAL STATUTES
FISCAL OFFENCES/STATUES AND
AMLA
 41. Act not to apply to fiscal offences. - (1) Except with prior consultation of FMU, an
investigating or prosecuting agency shall not charge any person with the offence of money
laundering in relation to a predicate offence punishable under the Sales Tax Act, 1990 (VII of
1990) and the Federal Excise Act, 2005.
 (2) In relation to the laws specified in sub-section (1), no offence other than the following shall
be notified as predicate offence, namely:-
 a.Sub-Sections 11 and 13 of Section 33 read with section 2(37) of the Sales Tax Act, 1990; and
 b.Sub-section (3) of section 19 of the Federal Excise Act, 2005."
AML AND BILATERAL
AGREEMENTS
BILATERAL/RECIPROCAL AGREEMENTS
26. Agreements with foreign countries. — (1) The Federal Government may enter into an agreement on reciprocal basis with
the Government of any country outside Pakistan for—
(a) the investigation and prosecution of any offence under this Act or under the corresponding law in force in that country;
(b) exchange of information for the prevention of any offence under this Act or under the corresponding law in force in that
country;
(c) seeking or providing of assistance or evidence in respect of any offence under this Act or under the corresponding law in
force in that country;
(d) transfer of property relating to any offence under this Act or under the corresponding law in force in that country.
27. Letter of request to a contracting State etc.—(1) Notwithstanding anything contained in this Act or the Code of Criminal
Procedure, 1898 (Act V of 1898), if, in the course of an investigation into an offence or other proceedings under this Act, the
investigating officer or any officer superior in rank to the investigating officer believes that any evidence is required in connection
with investigation into an offence or proceedings under this Act and he is of opinion that such evidence may be available in any
place in the contracting State, he may, with the prior permission of the head of that investigation agency, issue a letter of request
to a court or an authority in the contracting State competent to deal with such request to—
(a) examine facts and circumstances of the case; and
(b) take such steps as he may specify in such letter of request.
BILATERAL/RECIPROCAL AGREEMENTS
28. Assistance to a contracting State in certain cases.—Where a letter of request is received by the Federal Government from a
court or authority in a contracting State requesting for investigation into an offence or proceedings under this Act or under the
corresponding law in force in that country, the Federal Government may forward such letter of request to the Court or to the authorized
officer or any authority under this Act as it thinks fit for execution of such request in accordance with the provisions of this Act or, in the
manner sought by the contracting state so long as doing so would not violate laws of Pakistan or is, in any manner, not prejudicial to the
sovereignty, security, national interest or public order.
29. Reciprocal arrangements for processes and assistance for transfer of accused persons. — (1) Where a Court, in relation to
the offence of money laundering, desires that, —
(a) a summons to an accused person;
(b) a warrant for the arrest of an accused person;
(c) a summons to any person requiring him to attend and produce a document or other thing or to produce it, or
(d) a search warrant,
issued by it shall be served or executed at any place in any contracting State, it shall send such summons or warrant in duplicate in such
form, to such court, judge or magistrate through such authorities as the Federal Government may specify in this behalf and that court, judge
or magistrate, as the case may be, shall cause the same to be executed.
Important URLs
1. www. fmu.gov.pk
2. www.sbp.org.pk
BENAMI TRANSACTIONS
(PROHIBITION) ACT 2017
SCHEME OF THE ACT
CHAPTER I - PRELIMINARY
CHAPTER II - PROHIBITION OF BENAMI TRANSACTIONS
CHAPTER III - AUTHORITIES
CHAPTER IV - INFORMATION COLLECTION
CHAPTER V - ATTACHMENT, ADJUDICATION AND CONFISCATION
CHAPTER VI - FEDERAL APPELLATE TRIBUNAL
CHAPTER VII - SPECIAL COURTS
CHAPTER VIII - OFFENCES AND PROSECUTION
CHAPTER IX - MISCELLANEOUS
GENERAL- ON PURPOSE, APPLICATION
AND JURISDICTION
• No. F. 22(8)/2015-Legis, Islamabad, the 16th February, 2017.– The following Act of Majlis-e-Shoora (Parliament)
received the assent of the President on the 14th February, 2017 is hereby published for general information
• Act No. V of 2017- An Act to provide for prohibition of holding property in benami
• WHEREAS it is expedient to provide for prohibition of holding property in benami and restrict right to recover or
transfer property held benami and provide mechanism and procedure for confiscation of property held benami and
for matters connected therewith or incidental thereto;
• It is hereby enacted as follows:–
• 1. Short title, extent and commencement.– (1) This Act may be called the Benami Transactions (Prohibition) Act,
2017.
(2) It shall extend to the whole of Pakistan.
(3) It shall come into force at once.
IMPORTANT DEFINITIONS-SECTION 2
 (1)“Adjudicating Authority” means the Adjudicating Authority
appointed under section 6;
 (4)“attachment” means the prohibition of transfer, conversion, disposition
or movement of property, by an order issued under this Act;
 (5)“authority” means an authority referred to in section 15;
 (7)“benami property” means any property which is the subject matter of
benami transaction and also includes the proceeds from such property;
 (8)“benami transaction” means,–
(A) a transaction or arrangement–
(a) where a property is transferred to, or is held by a person and the
consideration for such property has been provided, or paid by,
another person; and
(b) the property is held for the immediate or future benefit, direct or
indirect, of the person who has provided the consideration,
except when the property is held by–
(i) a person standing in a fiduciary capacity for the benefit of
another person towards whom he stands in such capacity and
includes a trustee, executor, partner, director of a company,
agent or legal adviser, and any other person as may be notified
by the Federal Government for this purpose; or
(ii) any person being an individual in the name of his spouse or in
the name of any child or in the name of his brother and sister or
lineal ascendant or descendant and the individual appearing as
joint owner in any document of such individual and the
consideration for such property has been provided or paid out
of known resources of income of the individual; or
(B) a transaction or arrangement in respect of a property carried out
or made in the fictitious name; or
(C) a transaction or arrangement in respect of a property where the
owner of the property is not aware of, or denies knowledge of,
such ownership; or
(D) a transaction or arrangement in respect of a property where the
person providing the consideration is not traceable or is fictitious
 (9) “benamidar” means a person or a fictitious person, as the case
may be, in whose name the benami property is transferred or held and
includes a person who lends his name;
IMPORTANT DEFINITIONS-SECTION 2
 (11) “beneficial owner” means a person, whether his identity is
known or not, for whose benefit the benami property is held by a
benamidar;
 (15) “fair market value” in relation to a property, means,–
(a) the price that the property would ordinarily fetch on sale in the
open market on the date of the transaction; and
(b) where the price referred to in sub-clause (a) is not ascertainable,
such price as may be determined in accordance with such
manner as may be prescribed;
 (19) “Initiating Officer” means a Deputy Commissioner Inland
Revenue appointed under section 208 of the Income Tax Ordinance,
2001 (XLIX of 2001);
 (24) “person” shall include–
(a) an individual;
(b) a company;
(c) a firm;
(d) an association of persons or a body of individuals, whether
incorporated or not;
(e) every artificial juridical person, not falling under sub-clauses
(a) to (d).
 (25) “prescribed” means prescribed by rules made under this Act;
 (26) “property” means asset of any kind, whether movable or
immovable, tangible or intangible, corporeal or incorporeal and
includes any right or interest or legal documents or instruments
evidencing title or interest in the property and where the property is
capable of conversion into some other form, then the property in the
converted form and also includes the proceeds from the property;
 (27) “Special Court” means a Court of Sessions designated as
Special Court under section 50;
 (28) “transfer” includes sale, purchase, disposition, extinguishment
of profit or any other form of transfer of right, title, possession or lien;
(2) Words and expressions used herein and not defined in this Act shall
have the same meaning as defined in the Trusts Act, 1882 (II of 1882), the
Succession Act, 1925 (XXXIX of 1925), the Partnership Act, 1932 (IX of
1932, the Income Tax Ordinance, 2001 (XLIX of 2001) the Anti Money
Laundering Act, 2010 (VII of 2010) and the Companies Ordinance, 1984
(XLVII of 1984).
HIERARCHY UNDER THE ACT
HONORABLE HIGH COURT HAVING TERRITORIAL JURISDICTION
SPECIAL COURT (SUBJECT TO BAR ON JURISDICTION
U/S 43)-CRIMINAL PROCEEDINGS UNDER CRPC 1898
FEDERAL APPELLATE TRIBUNAL-POWERS NATURAL
JUSTICE, SUBJECT TO THE OTHER PROVISIONS OF THIS
ACT AND CPC SHALL BE THE GUIDING PRINCPLES
1- (ADJUDICATING AUTHORITY(IES) –Section 6 and 15
2- Authorities
(a) the Initiating Officer;- Section 15
(b) the Approving Authority;- Section 15
(c) the Administrator; and-Section 15
AUTHORITY AND FAT- PROVISONS
DETAILS ADJUDICATING AUTHORITY FEDERAL APPELLATE TRIBUNAL (FAT)
CONSTRUCTION 6- FG-Notification in official gazette- one or more
adjudicating authorities to exercise jurisdiction and
power and authority conferred under this Act.
28- FG-Notification in official gazette establish FAT
to hear appeals against orders of Adjudication
Authority under the Act
CONSTRUCTION-Nos 6. Chairperson (CP) and atleast two members 29 (1). Chairperson (CP) and atleast two members-
One Judicial and One Accountant
CONSTRUCTION-Qualification 6. Shall not be qualified to be appointed Unless-Is or
has been member of IRS and has held a post of CIR
or equivalent; or
Is or has been a member of FS and has held the post
of additional secretary or equivalent
30. CP-Unless he is or has been a judge of High
Court
Judicial Member- Unless he has exercised the powers
of a district judge and is qualified to be a judge of
HC
Accountant Member- has been CCIR of IRS or served
as CIR for 3 years and 1 year as CIR(A)
No sitting judge of HC be appointed under this
section without consultation of CJ of that HC
CP or member of another tribunal in addition to his
responsibilities may be appointed as CP or member
of this tribunal under this Act.
CONSTRUCTION-Manner 6. CP and members be appointed by FG in the
manner as may be prescribed
CONSTRUCTION-Chairperson 6. FG shall appoint Sr. most member as CP
AUTHORITY AND FAT- PROVISONS/2
DETAILS ADJUDICATING AUTHORITY FEDERAL APPELLATE TRIBUNAL
CONSTITUTION OF BENCHES • (7)- Jurisdiction of authority to be exercised by
benches
• Bench may be constituted by CP with 2 members
as the CP deem fit
• FG-in consultation with CP and through
notification in OG shall specify the places where
the benches shall sit
• CP may transfer member from one bench to
another
29. (2) subject to this Act;
• Jurisdiction of the Tribunal to be exercised by
benches
• Bench may be constituted by CP with 2 members
as the CP deem fit
• FG-in consultation with CP and through
notification in OG shall specify the places where
the benches shall
• FG-in through notification in OG shall specify the
jurisdictional areas of benches
• CP may transfer member from one bench to
another
POWERS-to regulate its own procedure (8.) As far as may be practicable be bound by the
procedure laid down in CPC 1908, Natural justice and
other provisions of the Act shall be the guiding
principles
(38.(1)) The FAT shall not be bound by the
procedure laid down by the Code of Civil Procedure,
1908, but shall be guided by the principles of natural
justice and, subject to the other provisions of this
Act, the Tribunal shall have powers to regulate its
own procedure.
TERMS OF OFFICE • (9.) 3 Years from the date they enter the office
until the age of 62 which ever is earlier
(32.) 3 Years from the date they enter the office until
the age of 65 which ever is earlier and shall not be
eligible for reappointment
TERMS AND CONDITIONS OF SERVICE • (10.) Salary and allowances and other terms shall
be such as may be prescribed
• Casual vacancy be filled within 3 months
• 31. Salary and allowances and other terms shall be
such as may be prescribed and shall not be varied
during their tenure
• Casual vacancy be filled within 3 months
AUTHORITY AND FAT- PROVISONS/3
DETAILS ADJUDICATING AUTHORITY FEDERAL APPELLATE TRIBUNAL
REMOVAL OF CP AND MEMBERS (11.) FG-by order in writing can remove, CP or a
member IF CP OR SUCH OTHER MEMBER , AS THE
CASE MAY BE
(a) has been adjudged as an insolvent; or
(b) is convicted of an offence, involving moral
turpitude; or
(c) has become physically or mentally incapable
of acting as a member; or
(d) has acquired such financial or other interest
as is likely to affect prejudicially his functions;
or
(e) has so abused his position as to render his
continuance in office prejudicial to the public
interest.
CP OR MEMBER SHALL NOT BE REMOVED WITHOUT
AFFORDING THEM REASONABLE OPPORTUNITY OF
BEING HEARD
(33.) FG-may-In consultation with CJ of HC having
jurisdiction, remove CP or member who--
(a) has been adjudged as an insolvent; or
(b) is convicted of an offence, involving moral
turpitude; or
(c) has become physically or mentally incapable
of acting as a member; or
(d) has acquired such financial or other interest
as is likely to affect prejudicially his functions;
or
(e) has so abused his position as to render his
continuance in office prejudicial to the public
interest.
CP OR MEMBER SHALL NOT BE REMOVED except by
an order after an inquiry made by CJ of a HC and CP
or members be informed about the charges on
him/them and after affording a reasonable
opportunity of being heard to him/them
FG-may suspend CP or member in respect to whom
inquiry is being referred to CJ until FG passes an
order on receipt of inquiry report
FG may regulate the procedure for inquiry in the
manner as may be prescribed
AUTHORITY AND FAT- PROVISONS/4
DETAILS ADJUDICATING AUTHORITY FEDERAL APPELLATE TRIBUNAL
TO ACT AS CP IN CERTAIN CASES (12.) Incase of vacancy in CP office by reason of
death, resignation or otherwise, the most Sr.
Member shall act until the appointment of new CP
(36.) Incase of vacancy in CP office by reason of
death, resignation or otherwise, FG may direct the
most Sr. Member shall act until the appointment of
new CP
VACANCIES, DEFECTS AND IRREGULARITIES (13. ) No Act or proceedings shall be invalid merely
by reasons of defect
• In Constitution of authority
• Appointment of members
• Procedural Irregularity not affecting merits of
the case
(34. ) No Act or proceedings shall be invalid merely
by reasons of defect
• In Constitution of Tribunal
• Appointment of members
• Procedural Irregularity not affecting merits of
the case
OFFICERS AND EMPLOYEES (14.) Officers and employees shall discharge their
functions under superintendence of CP
(37.) FG shall provide staff to FAT as it deems fit
Officers and employees shall discharge their
functions under superintendence of CP
Salaries, Allowances and TOS of the employees of
FAT shall be as may be prescribed
AUTHORITY AND JURISDICTION (15.) Following shall be authorities for the purpose
of this Act;
(a) the Initiating Officer;
(b) the Approving Authority;
(c) the Administrator; and
(d) the Adjudicating Authority
Discharge all or any functions assigned under this
Act or rules as may be prescribed.
(39.) Where benches are constituted CP may from
time to time by notification in OG make provisions
as to the distribution of business of Tribunal
amongst the benches and also provide for the
matters which may be dealt with by each bench
(40.) CP has the power to transfer cases from one
bench to another on its own motion without notice
or on application of parties after hearing them
AUTHORITY AND FAT- PROVISONS/5
DETAILS ADJUDICATING AUTHORITY FEDERAL APPELLATE TRIBUNAL
POWERS (16.) Same powers as are vested in civil courts under CPC
1908 while trying a suit in respect of following matters;
(a) discovery and inspection;
(b) enforcing attendance of any person;
(c) compelling production of books of accounts and
other documents;
(d) issuing commissions;
(e) receiving evidence on a affidavits; and
(f) any other matter which may be prescribed.
(2) Any proceeding under sub-section (1) shall be
deemed to be a judicial proceeding within the meaning of
section 193 and section 228 of the Pakistan Penal Code, 1860
(Act XLV of 1860).
[38.(2)] Same powers as are vested in civil courts under CPC
1908 while trying a suit in respect of followings namely;
(a) summoning and enforcing the attendance of any
person and examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits; and
(d) subject to section 6 of Qanoon-e-Shahadat, 1984 (P.O.
10 of 1984), requisitioning any public record or
document or copy of such record or document from
any office.
(3) Order passed by FAT is executable by it as the degree of
Civil court and for this purpose it shall have all the powers of
Civil Court
(4) Nonobstante clause- FAT can transmit it order to a civil
court to be executed by that court as if it shall be a decree of
that court
(5) Proceedings of FAT are deemed to be criminal proceeding
under section 193 and 228 of PPC 1860 and FAT shall be
deemed to be a Civil Court for the purposes of section 345
and 346 of CrPc 1898
ASSISTANCE TO (17.) Nutshell all the agencies and Institutions are required to
assist CP and members in discharging their functions
AUTHORITY AND FAT- PROVISONS/6
 41. Decision to be by majority.– In case of
difference of opinion on any point(s) the members
may refer the point(s) or the case to the CP who
shall personally hear the point(s) or transfer them
to any other member(s) and such points be
decided by majority
 42. Chairperson, Members and other officers
and employees to be public servants.– deemed
to be the public servants within the meaning of
section 21 of the Pakistan Penal Code, 1860 (Act
XLV of 1860)
 43. Bar of jurisdiction of civil courts.– No Civil
court shall entertain any case for which authority
or FAT has the power neither the court can issue
interim injunctions in such cases
 44. Appeals to Federal Appellate Tribunal-
initiating officer or aggrieved within 45 days of
receipt of order of the adjudicating authority
 FAT can condone the case on presenting a sufficient
cause that prevented the filing beyond 45 days
 ON receipt of appeal and after giving notice to the
parties and affording opportunity of being heard to
them FAT can pass such order as it deems fit.
 FAT must hear and finally decide the order within 1
year from the last date of the month in which appeal
was filed
AUTHORITY AND FAT- PROVISONS/7
 44. Appeals to Federal Appellate Tribunal-
Powers of FAT while deciding the appeal
 (a)to determine a case finally, where the evidence on
record is sufficient;
 (b) to take additional evidence or to require any
evidence to be taken by the Adjudicating Authority,
where the Adjudicating Authority has refused to admit
evidence, which ought to have been admitted;
 (c)to require any document to be produced or any
witness to be examined for the purposes of proceeding
before it;
 (d) to frame issues which appear to the Tribunal
essential for adjudication of the case and refer them to
the Adjudicating Authority for determination; and
 (e)to pass final order and affirm, vary or reverse an order
of adjudication passed by the Adjudicating Authority
and pass such other order or orders as may be
necessary to meet the ends of justice.
PROCESS FLOW UNDER THE ACT-
Initiating officer
Initiationofinquirybased
oninformationin
possession
Gathering of
Information-
Through call of
information,
searching the
premises,
impounding the
documents or
making
investigation or
inquiry
Analysis of
Information
received and
issuance of show
cause notice
Provisional attachment
/
Order of the Initiating
officer for attachment of
property
within 60 days of
attachment reference
to the Adjudicating
authority
PROCESS FLOW UNDER THE ACT-
Adjudicating Authority
ReceiptofReference
fromInitiatingOfficer
Issue of Notices
within 30 days of
reference to submit
such information,
documents or
evidence deemed
necessary for the
case- Not less than
30 days of
compliance be
allowed in notice
Consider replies
submitted
Information or
evidences provided
or material
available on record
Further inquiries
and investigations
Affording an
opportunity of being
heard to parties
Order of the Adjudicating
Authority-Provided no
order shall be passed after
expiry of 1 year from the
date of reference
COLLECTION OF INFORMATION
Power to call information
 CP or any authority or FAT can call from FG. PG, Local authority or
any authority or person or any officer responsible for registration of
property or maintaining books of account or other documents
containing a record of any transaction relating to property or any
other person to furnish any information in relation to any person or
point/ manner which in his opinion is relevant for the purposes of
this act
Power to enter and Search Premises
 Any authority without notice has power to have full and free access
to any premises, places, accounts, documents or computers
 Authority shall stamp or make copy of the documents or computer
data/information
Power of Authority to impound documents
 Record produced or obtained under section 19 (enter and search
the premises) may be impounded and retained for a period not
exceeding 3 months
 Period of retention may be extended beyond 3 months for reasons
officer shall obtain approval of approving authority within 15 days
of such impounding.
 Record shall not be retained for a period exceeding thirty days on
conclusion of proceedings
 Person from whom record was impounded shall be entitled to
obtain copies of the record so impounded
 On expiry of 3 months (or any extended period)the record
impounded shall be returned/released to the person from whom it
was impound or with the approval of approving or adjudicating
authority, to the owner or any other person nominated by the
owner
Power to make investigations and inquiries
 After obtaining prior approval of approving authority, the initiating
officer shall have power to conduct or cause to be conducted any
inquiry or investigation in respect or any person, place, property,
assets, documents, books of account, or other documents, in
respect of an other relevant matter under this Act
NOTICE & ATTACHMENT
Notice and manner of notice
 Initiating officer on the basis of material in his possession, after
recording the reasons in writing, and within such time as may be
prescribed in notice, issue the notice to such person as to why
such property shall not be treated as benami property
 Notice shall be issued in the manner as provided u/s 218 of the ITO
2001
Attachment
 In case initiating officer has reasons to believe that the holder of
benami property may alienate during time provided for compliance
to notice- provisional attachment with the approval of approving
authority for a period not exceeding 90 days from the date of issue
of notice
 Within 90 days of issuance of notice – Where provisional
attachment was made
 If property was provisionally attached, continue attachment with the
approval of approving authority till the decision of adjudicating authority
 If property was not attached, with the approval of approving authority
attach the property till the decision of adjudicating authority
 Within 90 days of issuance of notice – Where provisional
attachment was not made
 Pass an order of the provisional attachment with the approval of
approving authority, till the decision of adjudicating authority
 With the approval of approving authority, decide not to attach property
 If Provisional attachment is made, within 60 days of attachment
draw a statement of the case and refer it to the adjudicating
authority
CONFISCATION, VESTING, MANAGEMENT AND
POSSESSION OF PROPERTY
 Confiscation and Vesting
 After passing an order the adjudicating authority shall after
affording an opportunity of being heard to the person concerned
shall pass an order for confiscation of property
 In case an appeal if filed before FAT then confiscation is made
subject to the order of the FAT
 Confiscation is to be made as may be prescribed
 Nothing in this section shall apply to a bona fide purchase who
purchased the property from benamdar against an adequate
consideration before issuance of notice for confiscation
 If order of confiscation is passed the property shall be vested
absolutely in FG free of all encumbrances and no compensation be
paid for such confiscation
 Any right created in favor of third party for defeating proceedings
under this section shall be null and void
 If no order is made for confiscation upon attaining the proceeding
finality-no claim lies against government
 Administration/Management
 Administrator shall have powers to receive and manage confiscated
property
 FG shall notify how many of its officers shall work as administrators
 Administrator shall dispose of the property vested in FG as directed
and on such conditions and in such manner as may be prescribed
 Possession of Property
 Administrator shall take possession of confiscating property after
giving 7 days notice in writing to the person who is in possession
of such property
 In case of non compliance to notice of possession, administrator
can take forcible possession with the help of police officers
PROCESS FLOW UNDER THE ACT-FAT
AnypersonincludingInitiatingofficer
AggrievedbytheorderofAdj.Auth.
within45daysofreceiptofOrder
In case of delay in
filing FAT has
power to condone
the delay
provided
sufficient cause
has caused such
delay
Afford
opportunity of
being heard to
parties
As far as possible hear the case and finally
decide all questions within a period of 1
year from the last date of the month in
which the appeal was filed
Order Executable as decree of
Civil Court
Order to be transmitted to
Civil Court to be executed as a
decree of that court
PROCESS FLOW UNDER THE ACT-HC
AnypartyAggrievedbythedecisionor
orderofFATwithin60daysofservice
ofdecision/Order
High Court can
entertain a
delayed appeal if
sufficient cause
that resulted in a
delay is shown
If HC is satisfied
that substantial Q
of law is involved
in any case, it shall
formulate that
question
Appeal be heard only on formulated Q of
law by not less than 2 judges
Nothing in this section shall be deemed to
take away or Abridge the power of HC to
hear, for reasons to be recorded, an appeal
on any other substantial question of law not
formulated by it, if it is satisfied that the
case involves such Q
Decide the Q formulated
Save as otherwise provided,
Provision of CPC shall apply to
appeal to HC
HC can determine any issue which
is not been determined by FAT or
determined wrongly by FAT
Copy of order to appellant and
respondents
PROSECUTION, SPECIAL COURTS & MISC.
PROVISIONS
 SPECIAL COURTS
 FG in consultation with concerned CJ of the HC
 For trial of offences punishable under this Act
 By notification in official Gazette designate one or more courts of
session as special courts or special for such areas or for such case or
class or group of cases as may be specified in the notification
 Special Courts shall not take cognizance of offence except upon a
complaint in writing made by;
 The authority; or
 Any, officer of the FG or PG authorized in writing by that government by a
General or special order
 Trial shall be concluded as expeditiously as possible and every
endeavor shall be made to complete it within 6 months of filing of
complaint.
 CrPC 1898 shall apply to proceedings of special courts
 Appeal and revision to HC lies against the order of special court
 OFFENCES AND PROSECUTIONS
 Penalty for benami transaction- Rigorous imprisonment not less
than one year may extend to 7 years and a fine equal to 25% of FMV
of the property
 Penalty for false information – knowingly submits false information
or documents- Rigorous imprisonment of not less than 6 months
may extend to 5 years and a fine equal to 10% of FMC of property
 No prosecution shall be initiated without previous sanction of
the Board (FBR)
 MISC.
 After issuance of notice, notwithstanding anything contained in
transfer of property Act or any other law for the time being in force,
any transfer shall be null an void
 For the purpose of administration of this Act FG can issue
directions it deem fit and authorities to follow such orders,
instructions and directions
MISC. PROVISIONS
 Act to override other laws
 Offences to be non-cognizable- Notwithstanding anything contained in CrPc 1898 offences under this Act shall be non-
Cognizable
 Offences by Companies-
 Notices and summons not to be invalid on certain grounds-like mistake, omission or defect
 Protection of actions taken under good faith
 Power to make rules- FG by notification in official gazette
 Reward to whistleblowers- Board by notification shall prescribe the procedure in this behalf and also specify the
apportionment of reward sanctioned under this section
CONCLUDED- THANK
YOU VERY MUCH
Syed Muhammad Ijaz
Partner
Huzaima Ikram & Ijaz
www.hii.com.pk
0332-8655096
info@hii.com.pk

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Aml 2010 benami_2017_taxbar

  • 1. ANTI MONEY LAUNDERING ACT, 2010 BY SYED MUHAMMAD IJAZ, FCA, LL.B. ADVOCATE HIGH COURT PARTNER HUZAIMA IKRAM & IJAZ
  • 2. Table of contents  Overview  AML ACT 2010  AML-CFT regulations for Banks and DFIs & AML Rules 2008  AML and Fiscal Statutes  Bilateral and Reciprocal Agreements  Benami Transactions (Prohibition) Act, 2017  Q & A session
  • 4. Overview  Anti-Money Laundering Act, 2010 Act No. VII of 2010  An Act to provide for prevention of money laundering  WHEREAS it is expedient to provide for prevention of money laundering, combating financing of terrorism and forfeiture of property derived from, or involved in, money laundering or financing of terrorism and for matters connected therewith or incidental thereto;  Short title, extent and commencement. — (1) This Act may be called the Anti- Money Laundering Act, 2010.  It extends to the whole of Pakistan.  This section shall come into force at once
  • 5. Overriding And Savings/Validation of Actions  39. Act to have overriding effect. — (1) Subject to sub-section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force.  (2) The provisions of this Act shall be in addition to, and not in derogation of, the Anti Narcotics Force Act, 1997 (III of 1997), the Control of Narcotics Substances Act, 1997 (XXV of 1997), the Anti-terrorism Act, 1997 (XXVII of 1997) and the National Accountability Ordinance, 1999 (XVIII of 1999) and any other law relating to predicate offences.  40. Validation of actions, etc.- Anything done, actions taken, orders passed, instruments made, notifications issued, agreements made, proceedings initiated, processes or communication issued powers conferred, assumed or exercised, by the Federal Government, Financial Monitoring Unit or its officers on or after the 5th January, 2008 and before the commencement of this Act, shall be deemed to have been validly done, made, issued, taken, initiated, conferred, assumed, and exercised and provisions of the Act shall have, and shall be deemed always to have had, effect accordingly
  • 7. Money Laundering  2(n) “offence of money laundering” has the meaning as defined in section 3;  3. Offence of money laundering. —A person shall be guilty of offence of money laundering, if the person: —  (a) acquires, converts, possesses, uses or transfers property, knowing or having reason to believe that such property is proceeds of crime;  (b) conceals or disguises the true nature, origin, location, disposition, movement or ownership of property, knowing or having reason to believe that such property is proceeds of crime;  (c) holds or possesses on behalf of any other person any property knowing or having reason to believe that such property is proceeds of crime; or  (d) participates in, associates, conspires to commit, attempts to commit, aids, abets, facilitates, or counsels the commission of the acts specified in clauses (a), (b) and (c). [Explanation-I.]— The knowledge, intent or purpose required as an element of an offence set forth in this section may be inferred from factual circumstances in accordance with the Qanun-e-Shahadat Order, 1984 (P.O. 10 of 1984). [Explanation II.- For the purposes of proving an offence under this section, the conviction of an accused for the respective predicate offence shall not be required.]
  • 8. IMPORTANT DEFINITIONS  2. Definitions. — In this Act, unless there is anything repugnant in the subject or context, — (o) “person” means an individual, a firm, an entity, an association or a body of individuals, whether incorporated or not, a company and every other juridical person; (q) “proceeds of crime” means any property derived or obtained directly or indirectly by any person from the commission of a predicate offence or a foreign serious offence; (r) “property” means property or assets of any description, whether corporeal or incorporeal, movable or immovable, tangible or intangible, and includes deeds and instruments evidencing title to, or interest in, such property or assets, including cash and monetary instruments, wherever located; [(ra)“property involved in money laundering” means proceeds of crime, property derived or obtained directly or indirectly from the offence of money laundering and property used or intended to be used in commission of the offence of money laundering, a predicate offence or a foreign serious offence;] (s) “predicate offence” means an offence specified in the Schedule to this Act; (z) “transfer” means sale, lease, purchase, mortgage, pledge, gift, loan, or any other form of transfer of right, title, possession or lien.
  • 9. IMPORTANT DEFINITIONS  2. Definitions. — In this Act, unless there is anything repugnant in the subject or context, — (i) “foreign serious offence” means an offence: — (i) against the law of a foreign State stated in a certificate issued by, or on behalf of, the government of that foreign State; and (ii) which, had it occurred in Pakistan, would have constituted a predicate offence;
  • 10. PREDICATE OFFENCES-THE SCHEDULE  Section –I The Pakistan Penal Code, 1860 (Act XLV of 1860)  Section –II The Arms Act, 1878 (XI of 1878)  Section –III The Foreigners Act, 1946 (XXXI of 1946)  Section III-A Prevention of Corruption Act, 1947 (II of 1947)**  Section IIIB Foreign Exchange Regulation Act, 1947 (VII of 1947)-Illegal forex business**  Section –IV The Copyright Ordinance, 1962 (XXXIV of 1962)  Section –V The Pakistan Arms Ordinance, 1965 (W.P. Ordinance XX of 1965)  Section-VIA Securities Act, 2015 (Act III of 2015)***  Section 122 (Prohibition of Insider trading) read with section 159  Section 133 (Market Manipulation) read with section 159
  • 11. PREDICATE OFFENCES-THE SCHEDULE  Section –VII The Emigration Ordinance, 1979 (XVIII of 1979)  Section –VIIA**** The Sales Tax Act, 1990  33 (entries 11 and 13 of Table of Section 33) Offences and Penalties  Section –VIII The Control of Narcotic Substances Act, 1997 (XXV of 1997)  Section –IX The Anti-Terrorism Act, 1997 (XXVII of 1997)  Section –IXA The Pakistan Environmental Protection Act 1997 (XXXIV of 1997)*  Section -X National Accountability Ordinance, 1999 (XVIII of 1999)
  • 12. PREDICATE OFFENCES-THE SCHEDULE  Section –VI The Customs Act, 1969 (IV of 1969)**  Section 2(s) read with clause 8, 89 of section 156(1)  Section 15 read with clause 8, 9, 89 & 90 of section 156 (1)  Section 16 read with clause 8, 9, 89 & 90 of section 156 (1)  Section 32 read with clause 14 of section 156 (1)  Section 32A read with clause 14A of section 156(1)  Section 139 read with clause 70 of section 156 (1)  Section -XI The Registered Designs Ordinance, 2000 (XLV of 2000)*
  • 13. PREDICATE OFFENCES-THE SCHEDULE  Section -XII The Trade Marks Ordinance, 2001 (XIX of 2001)*  Section – XIIA- The Income Tax Ordinance, 2001*****  Section 192 (Concealment of Facts in verification) and section 192A (Concealment of Income)  Section -XIII The Prevention & Control of Human Trafficking Ordinance, 2002 (LIX of 2002)*  Section XIV The Federal Excise Act, 2005****  19(3) Offences, penalties, fines and allied matters * Inserted through SRO No. 3 dated January 8, 2011 ** Inserted through Federal Government notification dated 1st April 2015 *** Inserted through Federal Government notification dated 21st December 2015 **** Inserted through Federal Government notification dated 3rd February 2016 ***** Inserted through Federal Government notification dated 14-5-2016
  • 14. Punishment under AML ACT 2010  4. Punishment for money laundering. —Whoever commits the offence of [money laundering] shall be punishable with rigorous imprisonment for a term which shall not be less than one year but may extend to ten years and shall also be liable to fine which may extend to one million rupees and shall also be liable to forfeiture of property involved in money laundering or property of corresponding value. Provided that the aforesaid fine may extend to five million rupees in case of a company and every director, officer or employee of the company found guilty under this section shall also be punishable under this section.
  • 15. Hierarchy under AML Act 2010 FederalGovernment National Executive Committee to Combat ML [NEC]- Within 30 days of commencement of this Act. General Committee (GC) Sub-Committee (one or more) Financial Monitoring Unit-FMU (an independent authority)- to be housed in SBP and headed by a Financial Sector Expert with administrative oversight by GC Sub-Committees (one or more)
  • 16. CONSTITUTION OF AUTHORITIES-NEC Minister for Finance or Advisor to the Prime Minister on Finance/concerned MinisterChairman Minister on Foreign AffairsMember Minister for Law and JusticeMember Minister for InteriorMember Governor SBPMember Chairman SECPMember Director General (To also act as Secretary of NEC)Member/ any other member to be nominated by the Federal GovernmentMember
  • 17. CONSTITUTION OF AUTHORITIES-GC Secretary FinanceChairman Secretary InteriorMember Secretary Foreign AffairsMember Secretary LawMember Chairman NABMember Chairman FBRMember Director General-FIAMember Director General- Anti Narcotics ForceMember Deputy Governor SBPMember Commissioner SECPMember Director General- FMU (Shall also act as secretary of the GC)Member (i)any other Member to be nominated by Federal GovernmentMember
  • 18. POWER/FUNCTIONS/RESPONSIBILITIES OF COMMITTEES NEC •Meet not less than twice a year •Develop review, implement and oversight strategy to fight ML and TF •Determination of offences to be considered as predicate offence in Pak •Guidance and sanction in framing rules and regulation •Make recommendations to FG for implementation of this Act •Framing National Policy to combat ML and FT •Discuss issues and issue directions to agencies relating to ML and TF •Such other functions assigned by FG •NEC can delegate or assign its functions to GC or sub- committees GC •Take measures necessary for review and monitoring of performance of investigation agencies Financial Institutions and Non Financial businesses •Review training programs for Government, Fis, NFIs, professions and other persons relating to ML and TF •Assistance to NEC in carrying out its functions and duties •Discuss issues of national importance relating to ML and TF •Approve FMU budgetary proposals •Approve FMU staffing requirements, pay, allowances privileges and compensation packages and incidental matters •Undertake such other functions as assigned by NEC FMU •Receive suspicious transaction reports “STRs/CTRs” from reporting entities •Analyze “STRs/CTRs- in this respect FMU can call for record or information from any agency or person in Pakistan in relation to transaction in question. All such agencies or person shall promptly provide the information requested •Disseminate to other agencies after analyzing STRs and records for investigation and further actions as per AMLA 2010 or any other applicable law. •Create/Maintain database for STRs/CTRs and other related materials •Coordination and compliance with other international agencies. •Submission of annual reports to NEC and GC •SBP and SECP regulations for ML and TF •Other functions as may be necessary for the purpose of this Act.
  • 19. Reporting, Prosecution/Punishment, Appeals Reporting •Every reporting entity [as defined in 2(u), 2(f), 2(m) and any other entity as may be designated by FG through notification in official Gazette- File STRs [if it knows, suspects or has reason to suspect] that the transaction or pattern or transactions of which the transaction is a part;- •Funds from illegal resources or crime proceeds •Designed to evade any requirements of this section 7 •Has no apparent lawful purpose •Involves financing of Terrorism, terrorist acts or organizations or individuals involved in terrorism Investigation and prosecution •Call for information and reports-Authority u/s 7 •Attachment of property involved in ML or TF –section 8, and seizure under section 14 or 15 •Investigation section 9- 30 days notice is a must for calling of information and explanations •Vesting or property in FG section 10 •Power of survey –section 13 •Power to arrest-Section 16-Officer may after obtaining warrant from the Court or the nearest Judicial Magistrate arrest such person •Confiscated or obtained record can be retained for 90 days only unless the court authorizes extended period – Section 19 Appeals •Court of Sessions established under the Code of Criminal Procedure, 1898 (V of 1898) shall, within its territorial jurisdiction, exercise jurisdiction to try and adjudicate the offences punishable under this Act and all matters provided in, related to or arising from this Act •23. Appeal to High Court.—Any person aggrieved by final decision or order of the Court may prefer an appeal to the High Court within sixty days from the date of communication of the decision or order on any question of law or fact arising out of such decision or order: •Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be submitted within a further period not exceeding sixty days
  • 20. Reporting, Prosecution/Punishment, Appeals Reporting • STR not later than 7 working days • Records to be kept for at least 5 years • The provisions of section 7 shall have effect notwithstanding any obligation as to secrecy under any law or document • STRs only to be submitted to FMU • Every reporting entity shall conduct customers DDs as per requirement of their regulators Investigation and prosecution • Section 21--Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (Act V of 1898) and subject to sub- sections (2) and (3),— offences are non- cognizable and non-bailable • Court shall take cognizance only on written request of IO or other officer authorized by FG, PG or FMU • Section 22. Application of Code of Criminal Procedure, 1898 (Act V of 1898) to proceedings before Courts Appeals
  • 21. Other important points-  36. Notices, etc. not to be invalid on certain grounds.—No notice, summons, order, document or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid, or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such notice, summons, order, documents or other proceedings if such notice, summons, order, document or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.  33. Liability for failure to file Suspicious Transaction Report and for providing false information. — (1) - shall be liable for imprisonment for a term which may extend to three years or with fine which may extend to one hundred thousand rupees or both In the case of the conviction of a reporting entity, the concerned regulatory authority may also revoke its licence or registration or take such other administrative action, as it may deem appropriate  34. Disclosure of information. — (1) The directors, officers, employees and agents of any reporting entity, financial institution, non-financial business or profession or intermediary which report a suspicious transaction or STR pursuant to this law or any other authority, are prohibited from disclosing, directly or indirectly, any person involved in the transaction that the transaction has been reported. (2) A violation of the sub-section (1) is a criminal offence and shall be punishable by a maximum term of three years imprisonment or a fine which may extend to five hundred thousand rupees or both.
  • 22. Other important points-2  37. Offences by companies. — (1) Where a person committing a contravention of any of the provisions of this Act or of any rule, regulation, direction, or order made hereunder is a company, every person who, at the time the contravention was committed, was responsible for such contravention in the conduct of the business of company shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly:  Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.  (2) Notwithstanding anything in sub-section (1) where a contravention of any of the provisions of this Act or of any rule, regulation, direction or order made hereunder has been committed by a company and it is proved that the contravention has taken place with the consent, connivance or knowledge of any director, manager, secretary or other officer of any company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.  Explanation. ——For the purposes of this section, “director” in relation to a firm, means a partner in the firm.
  • 23. Other important points-3-various powers  FG has power to amend schedule or any entry therein by notification in official gazette  FG may in consultation with NEC can make rules by notification in official gazette  Subject to the supervisions and control of GC the FMU can issue regulations by notification in official gazette  For removing difficulty or inconsistencies FG through notification in official gazette can make such provisions as deem necessary
  • 24. AML – CFT REGULATIONS
  • 25. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES  PART - A Definitions  PART - B Regulations  Regulation - 1 Customer Due Diligence (CDD)  Regulation – 2 Correspondent Banking  Regulation – 3 Wire Transfers/Fund Transfers  Regulation – 4 Reporting of Transactions (STRs/CTRs)  Regulation – 5 Record Keeping  Regulation – 6 Internal Controls, Policies, Compliance, Audit & Training  Annexure – I Minimum Documents to be obtained from Various Types of Customers under AML/CFT Regulations  Annexure – II Examples or Characteristics of Suspicious Transactions (Red Alerts)
  • 26. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES R1-Customer DD When CDD measures are to be applied CDD Measures for Establishing Business Relationship Identification of Customers Verification of Identity Identification and Verification of Natural Persons Acting on Behalf of Customer Identification and Verification of Identity of Beneficial Owners Information on the Purpose and Intended Nature of Business Relations Timing of Verification CDD Measures for Occasional Customers/ Walk-inCustomers and Online Transactions Where CDD Measures are Not Completed Ongoing Monitoring Anonymous or Fictitious Account Review of Products and services Joint Accounts
  • 27. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES R2- Correspondent Banking • assess the suitability of the respondent bank • Clearly understand and document AML/CFT responsibilities of Banks • Correspondent Banking-Sr. Management approval before new relations • Special attention where cross border transactions are in areas with poor or no AML/CFT controls • Before cross border banking ensuring at least minimum AML/CFT level controls • Not relationships with shell banks R3- Wire Transfers/Fund Transfers • Responsibility of the Ordering Institution • Responsibility of the Beneficiary Institution • Responsibility of Intermediary Institution R4-REPORTING OF TRANSACTIONS (STRs/CTRs) •Examples and characteristics of some suspicious transactions (Red Alerts) that may be a cause for increased scrutiny for AML/CFT purposes are listed at ‘Annexure-II’.
  • 28. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES R5- RECORD KEEPING • Banks/DFI shall keep Sufficient records of transactions their result and analysis if any • Record must provide track of individual transactions with all details necessary to provide an evidence for any criminal prosecution • Identification Records be maintained for minimum ten years. In case of litigation even for period exceeding 10 years • Banks/DFIs shall ensure compliance to information request by enforcement agencies/FMU R6- NTERNAL CONTROLS, POLICIES, COMPLIANCE, AUDIT AND TRAINING • Bank/DFIs own AML/CFT policies, procedures & controls • Foreign Branches and Subsidiaries • Compliance • Audit • Employee Due Diligence • Training Annexure-I-Minimum Documents to be obtained from Various Types of Customers under AML/CFT Regulations •Individuals • Sole Proprietors • Partnership • Limited Companies/ Corporations • Branch Office or Liaison Office of Foreign Companies • Trust, Clubs, Societies and Associations etc • NGOs/ NPOs/Charities • Agents Accounts • Executors and Administrators • Minor Accounts
  • 29. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS  Annexure-II- The Red Alerts- General Comments  The following are examples or characteristics of possible suspicious transactions for money laundering or financing of terrorism. This list of situations may be taken as a means of highlighting the basic ways in which money may be laundered. The examples provided are not exhaustive and may serve only as guidance of banks/DFIs to recognize suspicious activities.  While each individual situation may not be sufficient to suggest that money laundering is taking place, a combination of such situations may be indicative of such a transaction. A customer's declarations regarding the background of such transactions shall be checked for plausibility and explanation offered by the customer may be accepted after reasonable scrutiny.
  • 30. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS Annexure-II- Transactions which do not make economic sense or inconsistent with customer’s business or profile i) A customer’s relationship having a large number of accounts with the same bank, frequent transfers between different accounts or exaggeratedly high liquidity; ii) Transactions in which assets are withdrawn immediately after being deposited, unless the customer's business activities furnish a plausible reason for immediate withdrawal; iii) Transactions that cannot be reconciled with the usual activities of the customer, for example, the use of Letters of Credit and other methods of trade finance to move money between countries where such trade is not consistent with the customer's usual business; iv) Provision of bank guarantees or indemnities as collateral for loans between third parties that are not in conformity with market conditions; v) Unexpected repayment of an overdue credit without any plausible explanation vi) Back-to-back loans without any identifiable and legally admissible purpose; vii) Paying in large third party cheques endorsed in favour of the customer; viii) Substantial increases in deposits of cash or negotiable instruments by a professional firm or company, using client accounts or in-house company or trust accounts, especially if the deposits are promptly transferred between other client company and trust accounts; ix) High velocity of funds through an account, i.e., low beginning and ending daily balances, which do not reflect the large volume of funds flowing through an account;
  • 31. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS Annexure-II- Transactions which do not make economic sense or inconsistent with customer’s business or profile x) Mixing of cash deposits and monetary instruments in an account in which such transactions do not appear to have any relation to the normal use of the account; xi) Multiple transactions carried out on the same day at the same branch of a financial institution but with an apparent attempt to use different tellers; xii) The structuring of deposits through multiple branches of the same bank or by groups of individuals who enter a single branch at the same time; xiii) The deposit or withdrawal of cash in amounts which fall consistently just below identification or reporting thresholds; xiv) The deposit or withdrawal of multiple monetary instruments at amounts which fall consistently just below identification or reporting thresholds, if any, particularly if the instruments are sequentially numbered; xv) Customers making large and frequent deposits but cheques drawn on the accounts are mostly to counter-parties not normally associated with customer’s business; xvi) Extensive or increased use of safe deposit facilities that do not appear to be justified by the customer's personal or business activities;
  • 32. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS Annexure-II- Transactions which do not make economic sense or inconsistent with customer’s business or profile xvii) Goods or services purchased by the business do not match the customer's stated line of business; xviii)A retail business has dramatically different patterns of currency deposits from similar businesses in the same general location; xix)Loans are made for, or are paid on behalf of, a third party with no reasonable explanation; xx) Suspicious movements of funds occur from one financial institution to another, and then funds are moved back to the first financial institution. xxi)The deposit of excess balance in the accounts linked to credit cards/store value cards. xxii)Unusual pattern of purchase through credit cards/store value cards etc.
  • 33. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS 3. Transactions involving large amounts of cash i) Exchanging an unusually large amount of small-denominated notes for those of higher denomination; ii) Purchasing or selling of foreign currencies in substantial amounts by cash settlement despite the customer having an account with the bank; iii) Frequent withdrawal of large amounts by means of cheques, including traveler’s cheques; iv) Large cash withdrawals from a previously dormant/inactive account, or from an account which has just received an unexpected large credit locally or from abroad; v) Large cash withdrawals made from a personal or business account not normally associated with customer’s profile; vi) Company transactions, both deposits and withdrawals, that are denominated by unusually large amounts of cash, rather than by way of debits and credits normally associated with the normal commercial operations of the company, e.g. cheques, letters of credit, bills of exchange, etc; vii) Depositing cash by means of numerous credit slips by a customer such that the amount of each deposit is not substantial, but the total of which is substantial;
  • 34. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS 3. Transactions involving large amounts of cash viii) The deposit of unusually large amounts of cash by a customer to cover requests for bankers' drafts, money transfers or other negotiable and readily marketable money instruments; ix) Customers who together, and simultaneously, use separate tellers to conduct large cash transactions or foreign exchange transactions; x) Large cash deposits made to the account of an individual or legal entity when the apparent business activity of the individual or entity would normally be conducted in cheques or other payment instruments
  • 35. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS 4. Transactions involving locations of concern & wire transfers i) Transactions involving foreign currency exchanges or deposits that are followed within a short time by wire transfers to locations of specific concern (for example, countries identified by national authorities/international bodies, UN or FATF etc.); ii) A personal or business account through which a large number of incoming or outgoing wire transfers take place without logical business or other economic purpose, particularly when this activity is to, through or from locations of specific concern (as mentioned above); iii) The use of multiple accounts to collect and then funnel funds to a small number of foreign beneficiaries, both individuals and businesses, particularly when these are in locations of specific concern (as mentioned above); iv) Obtaining credit instruments or engaging in commercial financial transactions involving movement of funds to or from locations of specific concern when there appears to be no logical business reasons for dealing with those locations (as mentioned above);
  • 36. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS 4. Transactions involving locations of concern & wire transfers v) The opening of accounts of financial institutions from locations of specific concern (as mentioned above); vi) The business relationships conducted in unusual circumstances e.g. significant unexplained geographic distance between the bank and the customer; vii) The receipt of small or large amounts (in cash, using online or otherwise) from various locations from within the country especially if such deposits are subsequently transferred within a short period out of the account and/or to a destination not normally associated with the customer; viii) Substantial increase in cash deposits by a customer without apparent cause, especially if such deposits are subsequently transferred within a short period out of the account and/or to a destination not normally associated with the customer; ix) Building up large balances, not consistent with the known turnover of the customer's business, and subsequent transfer to account(s) held overseas; x) Transfer of money abroad by an interim customer in the absence of any legitimate reason;
  • 37. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS 4. Transactions involving locations of concern & wire transfers xi) Repeated transfers of large amounts of money abroad accompanied by the instruction to pay the beneficiary in cash; xii) Large and regular payments that cannot be clearly identified as bona fide transactions, from and to countries or geographic areas identified by credible sources; • as having significant levels of corruption, or other criminal activity • as providing funding or support for terrorism activities • as associated with the production, processing or marketing of narcotics or other illegal drugs etc. xiii) Wire transfers ordered in small amounts in an apparent effort to avoid triggering identification or reporting requirements; xiv) Wire transfers to or for an individual where information on the originator, or the person on whose behalf the transaction is conducted, is not provided with the wire transfer, when the inclusion of such information would be expected; xv) Use of multiple personal and business accounts or the accounts of non-profit organizations or charities to collect and then funnel funds immediately or after a short time to a small number of foreign beneficiaries. xvi) Customer who generally use credit cards/store value cards out of their defined geographical location or locations prone to money laundering and terrorist financing.
  • 38. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS 5. Transactions involving unidentified parties i) Provision of collateral by way of pledge or guarantee without any discernible plausible reason by third parties unknown to the bank and who have no identifiable close relationship with the customer; ii) Transfer of money to another bank without indication of the beneficiary; iii) Payment orders with inaccurate information concerning the person placing the orders; iv) Use of pseudonyms or numbered accounts for effecting commercial transactions by enterprises active in trade and industry; v) Customer’s holding in trust of shares in an unlisted company whose activities cannot be ascertained by the bank; vi) Customers who wish to maintain a number of trustee or clients' accounts that do not appear consistent with their type of business, including transactions that involve nominee names.
  • 39. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS 6. Other suspicious accounts or customers i) Large sums deposited through cheques or otherwise in newly opened accounts which may be suspicious; ii) The customers who are reluctant to provide minimal information or provide false or misleading information or, when applying to open an account, provide information that is difficult or expensive for the bank to verify; iii) An account opened in the name of a moneychanger that receives structured deposits; iv) Customers whose deposits contain counterfeit notes or forged instruments; v) An account operated in the name of an offshore company with structured movement of funds; vi) Accounts that receive relevant periodical deposits and are dormant at other periods. These accounts are then used in creating a legitimate appearing financial background through which additional fraudulent activities may be carried out; vii) A dormant account containing a minimal sum suddenly receives a deposit or series of deposits followed by daily cash withdrawals that continue until the sum so received has been removed; viii) An account for which several persons have signature authority, yet these persons appear to have no relation among each other (either family ties or business relationship);
  • 40. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS 6. Other suspicious accounts or customers ix) An account opened by a legal entity or an organization that has the same address as other legal entities or organizations but for which the same person or persons have signature authority, when there is no apparent economic or legal reason for such an arrangement (for example, individuals serving as company directors for multiple companies headquartered at the same location, etc.) x) An account opened in the name of a recently formed legal entity and in which a higher than expected level of deposits are made in comparison with the income of the promoter of the entity; xi) An account opened in the name of a legal entity that is believed to be involved in the activities of an association or foundation whose aims are related to the claims or demands of a terrorism organization; xii) An account opened in the name of a legal entity, a foundation or an association, which may be linked to a terrorism organization and that shows movements of funds above the expected level of income; xiii) Shared address for individuals involved in cash transactions, particularly when the address is also a business location and/or does not seem to correspond to the stated occupation (for example student, unemployed, self-employed, etc.); xiv) Stated occupation of the customer is not commensurate with the level or type of activity (for example, a student or an unemployed individual who receives or sends large numbers of wire transfers, or who makes daily maximum cash withdrawals at multiple locations over a wide geographic area);
  • 41. AML-CFT REGULATIONS FOR FIs AND NON FINANCIAL COMPANIES-RED ALERTS 6. Other suspicious accounts or customers xv) Regarding non-profit or charitable organizations, financial transactions for which there appears to be no logical economic purpose or in which there appears to be no link between the stated activity of the organization and the other parties in the transaction; xvi) A safe deposit box is opened on behalf of a commercial entity when the business activity of the customer is unknown or such activity does not appear to justify the use of a safe deposit box; xvii) Safe deposit boxes are used by individuals who do not reside or work in the institution's service area despite the availability of such services at an institution closer to them; xviii) Unexplained inconsistencies arising from the process of identifying or verifying the customer (for example, regarding previous or current country of residence, country of issue of the passport, countries visited according to the passport, and documents furnished to confirm name, address and date of birth); xix) Official embassy business is conducted through personal accounts. xx) Large deposits on pretext of transfer/disposition of property. xxi) Frequent and unusual advance payments against imports
  • 42. AML RULES 2008 1. Interpretations 2. Maintenance of record-IO shall maintain the inventory of record and keep the record till the conclusion of enquiry 3. FMU can seek co-operation from foreign institutions as a result of bilateral or multilateral agreements 4. Administrator appointed u/s 11 shall keep the record of maintenance, conditions etc. of properties 5. Documents received from outside Pakistan my be assumed to be duly authenticated if it is attested and signed by the diplomatic representative of that country in Pakistan or Pakistan’s diplomatic representative in that country.
  • 43. AML ACT 2010 AND FISCAL STATUTES
  • 44. FISCAL OFFENCES/STATUES AND AMLA  41. Act not to apply to fiscal offences. - (1) Except with prior consultation of FMU, an investigating or prosecuting agency shall not charge any person with the offence of money laundering in relation to a predicate offence punishable under the Sales Tax Act, 1990 (VII of 1990) and the Federal Excise Act, 2005.  (2) In relation to the laws specified in sub-section (1), no offence other than the following shall be notified as predicate offence, namely:-  a.Sub-Sections 11 and 13 of Section 33 read with section 2(37) of the Sales Tax Act, 1990; and  b.Sub-section (3) of section 19 of the Federal Excise Act, 2005."
  • 46. BILATERAL/RECIPROCAL AGREEMENTS 26. Agreements with foreign countries. — (1) The Federal Government may enter into an agreement on reciprocal basis with the Government of any country outside Pakistan for— (a) the investigation and prosecution of any offence under this Act or under the corresponding law in force in that country; (b) exchange of information for the prevention of any offence under this Act or under the corresponding law in force in that country; (c) seeking or providing of assistance or evidence in respect of any offence under this Act or under the corresponding law in force in that country; (d) transfer of property relating to any offence under this Act or under the corresponding law in force in that country. 27. Letter of request to a contracting State etc.—(1) Notwithstanding anything contained in this Act or the Code of Criminal Procedure, 1898 (Act V of 1898), if, in the course of an investigation into an offence or other proceedings under this Act, the investigating officer or any officer superior in rank to the investigating officer believes that any evidence is required in connection with investigation into an offence or proceedings under this Act and he is of opinion that such evidence may be available in any place in the contracting State, he may, with the prior permission of the head of that investigation agency, issue a letter of request to a court or an authority in the contracting State competent to deal with such request to— (a) examine facts and circumstances of the case; and (b) take such steps as he may specify in such letter of request.
  • 47. BILATERAL/RECIPROCAL AGREEMENTS 28. Assistance to a contracting State in certain cases.—Where a letter of request is received by the Federal Government from a court or authority in a contracting State requesting for investigation into an offence or proceedings under this Act or under the corresponding law in force in that country, the Federal Government may forward such letter of request to the Court or to the authorized officer or any authority under this Act as it thinks fit for execution of such request in accordance with the provisions of this Act or, in the manner sought by the contracting state so long as doing so would not violate laws of Pakistan or is, in any manner, not prejudicial to the sovereignty, security, national interest or public order. 29. Reciprocal arrangements for processes and assistance for transfer of accused persons. — (1) Where a Court, in relation to the offence of money laundering, desires that, — (a) a summons to an accused person; (b) a warrant for the arrest of an accused person; (c) a summons to any person requiring him to attend and produce a document or other thing or to produce it, or (d) a search warrant, issued by it shall be served or executed at any place in any contracting State, it shall send such summons or warrant in duplicate in such form, to such court, judge or magistrate through such authorities as the Federal Government may specify in this behalf and that court, judge or magistrate, as the case may be, shall cause the same to be executed.
  • 48. Important URLs 1. www. fmu.gov.pk 2. www.sbp.org.pk
  • 50. SCHEME OF THE ACT CHAPTER I - PRELIMINARY CHAPTER II - PROHIBITION OF BENAMI TRANSACTIONS CHAPTER III - AUTHORITIES CHAPTER IV - INFORMATION COLLECTION CHAPTER V - ATTACHMENT, ADJUDICATION AND CONFISCATION CHAPTER VI - FEDERAL APPELLATE TRIBUNAL CHAPTER VII - SPECIAL COURTS CHAPTER VIII - OFFENCES AND PROSECUTION CHAPTER IX - MISCELLANEOUS
  • 51. GENERAL- ON PURPOSE, APPLICATION AND JURISDICTION • No. F. 22(8)/2015-Legis, Islamabad, the 16th February, 2017.– The following Act of Majlis-e-Shoora (Parliament) received the assent of the President on the 14th February, 2017 is hereby published for general information • Act No. V of 2017- An Act to provide for prohibition of holding property in benami • WHEREAS it is expedient to provide for prohibition of holding property in benami and restrict right to recover or transfer property held benami and provide mechanism and procedure for confiscation of property held benami and for matters connected therewith or incidental thereto; • It is hereby enacted as follows:– • 1. Short title, extent and commencement.– (1) This Act may be called the Benami Transactions (Prohibition) Act, 2017. (2) It shall extend to the whole of Pakistan. (3) It shall come into force at once.
  • 52. IMPORTANT DEFINITIONS-SECTION 2  (1)“Adjudicating Authority” means the Adjudicating Authority appointed under section 6;  (4)“attachment” means the prohibition of transfer, conversion, disposition or movement of property, by an order issued under this Act;  (5)“authority” means an authority referred to in section 15;  (7)“benami property” means any property which is the subject matter of benami transaction and also includes the proceeds from such property;  (8)“benami transaction” means,– (A) a transaction or arrangement– (a) where a property is transferred to, or is held by a person and the consideration for such property has been provided, or paid by, another person; and (b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration, except when the property is held by– (i) a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a trustee, executor, partner, director of a company, agent or legal adviser, and any other person as may be notified by the Federal Government for this purpose; or (ii) any person being an individual in the name of his spouse or in the name of any child or in the name of his brother and sister or lineal ascendant or descendant and the individual appearing as joint owner in any document of such individual and the consideration for such property has been provided or paid out of known resources of income of the individual; or (B) a transaction or arrangement in respect of a property carried out or made in the fictitious name; or (C) a transaction or arrangement in respect of a property where the owner of the property is not aware of, or denies knowledge of, such ownership; or (D) a transaction or arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious  (9) “benamidar” means a person or a fictitious person, as the case may be, in whose name the benami property is transferred or held and includes a person who lends his name;
  • 53. IMPORTANT DEFINITIONS-SECTION 2  (11) “beneficial owner” means a person, whether his identity is known or not, for whose benefit the benami property is held by a benamidar;  (15) “fair market value” in relation to a property, means,– (a) the price that the property would ordinarily fetch on sale in the open market on the date of the transaction; and (b) where the price referred to in sub-clause (a) is not ascertainable, such price as may be determined in accordance with such manner as may be prescribed;  (19) “Initiating Officer” means a Deputy Commissioner Inland Revenue appointed under section 208 of the Income Tax Ordinance, 2001 (XLIX of 2001);  (24) “person” shall include– (a) an individual; (b) a company; (c) a firm; (d) an association of persons or a body of individuals, whether incorporated or not; (e) every artificial juridical person, not falling under sub-clauses (a) to (d).  (25) “prescribed” means prescribed by rules made under this Act;  (26) “property” means asset of any kind, whether movable or immovable, tangible or intangible, corporeal or incorporeal and includes any right or interest or legal documents or instruments evidencing title or interest in the property and where the property is capable of conversion into some other form, then the property in the converted form and also includes the proceeds from the property;  (27) “Special Court” means a Court of Sessions designated as Special Court under section 50;  (28) “transfer” includes sale, purchase, disposition, extinguishment of profit or any other form of transfer of right, title, possession or lien; (2) Words and expressions used herein and not defined in this Act shall have the same meaning as defined in the Trusts Act, 1882 (II of 1882), the Succession Act, 1925 (XXXIX of 1925), the Partnership Act, 1932 (IX of 1932, the Income Tax Ordinance, 2001 (XLIX of 2001) the Anti Money Laundering Act, 2010 (VII of 2010) and the Companies Ordinance, 1984 (XLVII of 1984).
  • 54. HIERARCHY UNDER THE ACT HONORABLE HIGH COURT HAVING TERRITORIAL JURISDICTION SPECIAL COURT (SUBJECT TO BAR ON JURISDICTION U/S 43)-CRIMINAL PROCEEDINGS UNDER CRPC 1898 FEDERAL APPELLATE TRIBUNAL-POWERS NATURAL JUSTICE, SUBJECT TO THE OTHER PROVISIONS OF THIS ACT AND CPC SHALL BE THE GUIDING PRINCPLES 1- (ADJUDICATING AUTHORITY(IES) –Section 6 and 15 2- Authorities (a) the Initiating Officer;- Section 15 (b) the Approving Authority;- Section 15 (c) the Administrator; and-Section 15
  • 55. AUTHORITY AND FAT- PROVISONS DETAILS ADJUDICATING AUTHORITY FEDERAL APPELLATE TRIBUNAL (FAT) CONSTRUCTION 6- FG-Notification in official gazette- one or more adjudicating authorities to exercise jurisdiction and power and authority conferred under this Act. 28- FG-Notification in official gazette establish FAT to hear appeals against orders of Adjudication Authority under the Act CONSTRUCTION-Nos 6. Chairperson (CP) and atleast two members 29 (1). Chairperson (CP) and atleast two members- One Judicial and One Accountant CONSTRUCTION-Qualification 6. Shall not be qualified to be appointed Unless-Is or has been member of IRS and has held a post of CIR or equivalent; or Is or has been a member of FS and has held the post of additional secretary or equivalent 30. CP-Unless he is or has been a judge of High Court Judicial Member- Unless he has exercised the powers of a district judge and is qualified to be a judge of HC Accountant Member- has been CCIR of IRS or served as CIR for 3 years and 1 year as CIR(A) No sitting judge of HC be appointed under this section without consultation of CJ of that HC CP or member of another tribunal in addition to his responsibilities may be appointed as CP or member of this tribunal under this Act. CONSTRUCTION-Manner 6. CP and members be appointed by FG in the manner as may be prescribed CONSTRUCTION-Chairperson 6. FG shall appoint Sr. most member as CP
  • 56. AUTHORITY AND FAT- PROVISONS/2 DETAILS ADJUDICATING AUTHORITY FEDERAL APPELLATE TRIBUNAL CONSTITUTION OF BENCHES • (7)- Jurisdiction of authority to be exercised by benches • Bench may be constituted by CP with 2 members as the CP deem fit • FG-in consultation with CP and through notification in OG shall specify the places where the benches shall sit • CP may transfer member from one bench to another 29. (2) subject to this Act; • Jurisdiction of the Tribunal to be exercised by benches • Bench may be constituted by CP with 2 members as the CP deem fit • FG-in consultation with CP and through notification in OG shall specify the places where the benches shall • FG-in through notification in OG shall specify the jurisdictional areas of benches • CP may transfer member from one bench to another POWERS-to regulate its own procedure (8.) As far as may be practicable be bound by the procedure laid down in CPC 1908, Natural justice and other provisions of the Act shall be the guiding principles (38.(1)) The FAT shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice and, subject to the other provisions of this Act, the Tribunal shall have powers to regulate its own procedure. TERMS OF OFFICE • (9.) 3 Years from the date they enter the office until the age of 62 which ever is earlier (32.) 3 Years from the date they enter the office until the age of 65 which ever is earlier and shall not be eligible for reappointment TERMS AND CONDITIONS OF SERVICE • (10.) Salary and allowances and other terms shall be such as may be prescribed • Casual vacancy be filled within 3 months • 31. Salary and allowances and other terms shall be such as may be prescribed and shall not be varied during their tenure • Casual vacancy be filled within 3 months
  • 57. AUTHORITY AND FAT- PROVISONS/3 DETAILS ADJUDICATING AUTHORITY FEDERAL APPELLATE TRIBUNAL REMOVAL OF CP AND MEMBERS (11.) FG-by order in writing can remove, CP or a member IF CP OR SUCH OTHER MEMBER , AS THE CASE MAY BE (a) has been adjudged as an insolvent; or (b) is convicted of an offence, involving moral turpitude; or (c) has become physically or mentally incapable of acting as a member; or (d) has acquired such financial or other interest as is likely to affect prejudicially his functions; or (e) has so abused his position as to render his continuance in office prejudicial to the public interest. CP OR MEMBER SHALL NOT BE REMOVED WITHOUT AFFORDING THEM REASONABLE OPPORTUNITY OF BEING HEARD (33.) FG-may-In consultation with CJ of HC having jurisdiction, remove CP or member who-- (a) has been adjudged as an insolvent; or (b) is convicted of an offence, involving moral turpitude; or (c) has become physically or mentally incapable of acting as a member; or (d) has acquired such financial or other interest as is likely to affect prejudicially his functions; or (e) has so abused his position as to render his continuance in office prejudicial to the public interest. CP OR MEMBER SHALL NOT BE REMOVED except by an order after an inquiry made by CJ of a HC and CP or members be informed about the charges on him/them and after affording a reasonable opportunity of being heard to him/them FG-may suspend CP or member in respect to whom inquiry is being referred to CJ until FG passes an order on receipt of inquiry report FG may regulate the procedure for inquiry in the manner as may be prescribed
  • 58. AUTHORITY AND FAT- PROVISONS/4 DETAILS ADJUDICATING AUTHORITY FEDERAL APPELLATE TRIBUNAL TO ACT AS CP IN CERTAIN CASES (12.) Incase of vacancy in CP office by reason of death, resignation or otherwise, the most Sr. Member shall act until the appointment of new CP (36.) Incase of vacancy in CP office by reason of death, resignation or otherwise, FG may direct the most Sr. Member shall act until the appointment of new CP VACANCIES, DEFECTS AND IRREGULARITIES (13. ) No Act or proceedings shall be invalid merely by reasons of defect • In Constitution of authority • Appointment of members • Procedural Irregularity not affecting merits of the case (34. ) No Act or proceedings shall be invalid merely by reasons of defect • In Constitution of Tribunal • Appointment of members • Procedural Irregularity not affecting merits of the case OFFICERS AND EMPLOYEES (14.) Officers and employees shall discharge their functions under superintendence of CP (37.) FG shall provide staff to FAT as it deems fit Officers and employees shall discharge their functions under superintendence of CP Salaries, Allowances and TOS of the employees of FAT shall be as may be prescribed AUTHORITY AND JURISDICTION (15.) Following shall be authorities for the purpose of this Act; (a) the Initiating Officer; (b) the Approving Authority; (c) the Administrator; and (d) the Adjudicating Authority Discharge all or any functions assigned under this Act or rules as may be prescribed. (39.) Where benches are constituted CP may from time to time by notification in OG make provisions as to the distribution of business of Tribunal amongst the benches and also provide for the matters which may be dealt with by each bench (40.) CP has the power to transfer cases from one bench to another on its own motion without notice or on application of parties after hearing them
  • 59. AUTHORITY AND FAT- PROVISONS/5 DETAILS ADJUDICATING AUTHORITY FEDERAL APPELLATE TRIBUNAL POWERS (16.) Same powers as are vested in civil courts under CPC 1908 while trying a suit in respect of following matters; (a) discovery and inspection; (b) enforcing attendance of any person; (c) compelling production of books of accounts and other documents; (d) issuing commissions; (e) receiving evidence on a affidavits; and (f) any other matter which may be prescribed. (2) Any proceeding under sub-section (1) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Pakistan Penal Code, 1860 (Act XLV of 1860). [38.(2)] Same powers as are vested in civil courts under CPC 1908 while trying a suit in respect of followings namely; (a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring the discovery and production of documents; (c) receiving evidence on affidavits; and (d) subject to section 6 of Qanoon-e-Shahadat, 1984 (P.O. 10 of 1984), requisitioning any public record or document or copy of such record or document from any office. (3) Order passed by FAT is executable by it as the degree of Civil court and for this purpose it shall have all the powers of Civil Court (4) Nonobstante clause- FAT can transmit it order to a civil court to be executed by that court as if it shall be a decree of that court (5) Proceedings of FAT are deemed to be criminal proceeding under section 193 and 228 of PPC 1860 and FAT shall be deemed to be a Civil Court for the purposes of section 345 and 346 of CrPc 1898 ASSISTANCE TO (17.) Nutshell all the agencies and Institutions are required to assist CP and members in discharging their functions
  • 60. AUTHORITY AND FAT- PROVISONS/6  41. Decision to be by majority.– In case of difference of opinion on any point(s) the members may refer the point(s) or the case to the CP who shall personally hear the point(s) or transfer them to any other member(s) and such points be decided by majority  42. Chairperson, Members and other officers and employees to be public servants.– deemed to be the public servants within the meaning of section 21 of the Pakistan Penal Code, 1860 (Act XLV of 1860)  43. Bar of jurisdiction of civil courts.– No Civil court shall entertain any case for which authority or FAT has the power neither the court can issue interim injunctions in such cases  44. Appeals to Federal Appellate Tribunal- initiating officer or aggrieved within 45 days of receipt of order of the adjudicating authority  FAT can condone the case on presenting a sufficient cause that prevented the filing beyond 45 days  ON receipt of appeal and after giving notice to the parties and affording opportunity of being heard to them FAT can pass such order as it deems fit.  FAT must hear and finally decide the order within 1 year from the last date of the month in which appeal was filed
  • 61. AUTHORITY AND FAT- PROVISONS/7  44. Appeals to Federal Appellate Tribunal- Powers of FAT while deciding the appeal  (a)to determine a case finally, where the evidence on record is sufficient;  (b) to take additional evidence or to require any evidence to be taken by the Adjudicating Authority, where the Adjudicating Authority has refused to admit evidence, which ought to have been admitted;  (c)to require any document to be produced or any witness to be examined for the purposes of proceeding before it;  (d) to frame issues which appear to the Tribunal essential for adjudication of the case and refer them to the Adjudicating Authority for determination; and  (e)to pass final order and affirm, vary or reverse an order of adjudication passed by the Adjudicating Authority and pass such other order or orders as may be necessary to meet the ends of justice.
  • 62. PROCESS FLOW UNDER THE ACT- Initiating officer Initiationofinquirybased oninformationin possession Gathering of Information- Through call of information, searching the premises, impounding the documents or making investigation or inquiry Analysis of Information received and issuance of show cause notice Provisional attachment / Order of the Initiating officer for attachment of property within 60 days of attachment reference to the Adjudicating authority
  • 63. PROCESS FLOW UNDER THE ACT- Adjudicating Authority ReceiptofReference fromInitiatingOfficer Issue of Notices within 30 days of reference to submit such information, documents or evidence deemed necessary for the case- Not less than 30 days of compliance be allowed in notice Consider replies submitted Information or evidences provided or material available on record Further inquiries and investigations Affording an opportunity of being heard to parties Order of the Adjudicating Authority-Provided no order shall be passed after expiry of 1 year from the date of reference
  • 64. COLLECTION OF INFORMATION Power to call information  CP or any authority or FAT can call from FG. PG, Local authority or any authority or person or any officer responsible for registration of property or maintaining books of account or other documents containing a record of any transaction relating to property or any other person to furnish any information in relation to any person or point/ manner which in his opinion is relevant for the purposes of this act Power to enter and Search Premises  Any authority without notice has power to have full and free access to any premises, places, accounts, documents or computers  Authority shall stamp or make copy of the documents or computer data/information Power of Authority to impound documents  Record produced or obtained under section 19 (enter and search the premises) may be impounded and retained for a period not exceeding 3 months  Period of retention may be extended beyond 3 months for reasons officer shall obtain approval of approving authority within 15 days of such impounding.  Record shall not be retained for a period exceeding thirty days on conclusion of proceedings  Person from whom record was impounded shall be entitled to obtain copies of the record so impounded  On expiry of 3 months (or any extended period)the record impounded shall be returned/released to the person from whom it was impound or with the approval of approving or adjudicating authority, to the owner or any other person nominated by the owner Power to make investigations and inquiries  After obtaining prior approval of approving authority, the initiating officer shall have power to conduct or cause to be conducted any inquiry or investigation in respect or any person, place, property, assets, documents, books of account, or other documents, in respect of an other relevant matter under this Act
  • 65. NOTICE & ATTACHMENT Notice and manner of notice  Initiating officer on the basis of material in his possession, after recording the reasons in writing, and within such time as may be prescribed in notice, issue the notice to such person as to why such property shall not be treated as benami property  Notice shall be issued in the manner as provided u/s 218 of the ITO 2001 Attachment  In case initiating officer has reasons to believe that the holder of benami property may alienate during time provided for compliance to notice- provisional attachment with the approval of approving authority for a period not exceeding 90 days from the date of issue of notice  Within 90 days of issuance of notice – Where provisional attachment was made  If property was provisionally attached, continue attachment with the approval of approving authority till the decision of adjudicating authority  If property was not attached, with the approval of approving authority attach the property till the decision of adjudicating authority  Within 90 days of issuance of notice – Where provisional attachment was not made  Pass an order of the provisional attachment with the approval of approving authority, till the decision of adjudicating authority  With the approval of approving authority, decide not to attach property  If Provisional attachment is made, within 60 days of attachment draw a statement of the case and refer it to the adjudicating authority
  • 66. CONFISCATION, VESTING, MANAGEMENT AND POSSESSION OF PROPERTY  Confiscation and Vesting  After passing an order the adjudicating authority shall after affording an opportunity of being heard to the person concerned shall pass an order for confiscation of property  In case an appeal if filed before FAT then confiscation is made subject to the order of the FAT  Confiscation is to be made as may be prescribed  Nothing in this section shall apply to a bona fide purchase who purchased the property from benamdar against an adequate consideration before issuance of notice for confiscation  If order of confiscation is passed the property shall be vested absolutely in FG free of all encumbrances and no compensation be paid for such confiscation  Any right created in favor of third party for defeating proceedings under this section shall be null and void  If no order is made for confiscation upon attaining the proceeding finality-no claim lies against government  Administration/Management  Administrator shall have powers to receive and manage confiscated property  FG shall notify how many of its officers shall work as administrators  Administrator shall dispose of the property vested in FG as directed and on such conditions and in such manner as may be prescribed  Possession of Property  Administrator shall take possession of confiscating property after giving 7 days notice in writing to the person who is in possession of such property  In case of non compliance to notice of possession, administrator can take forcible possession with the help of police officers
  • 67. PROCESS FLOW UNDER THE ACT-FAT AnypersonincludingInitiatingofficer AggrievedbytheorderofAdj.Auth. within45daysofreceiptofOrder In case of delay in filing FAT has power to condone the delay provided sufficient cause has caused such delay Afford opportunity of being heard to parties As far as possible hear the case and finally decide all questions within a period of 1 year from the last date of the month in which the appeal was filed Order Executable as decree of Civil Court Order to be transmitted to Civil Court to be executed as a decree of that court
  • 68. PROCESS FLOW UNDER THE ACT-HC AnypartyAggrievedbythedecisionor orderofFATwithin60daysofservice ofdecision/Order High Court can entertain a delayed appeal if sufficient cause that resulted in a delay is shown If HC is satisfied that substantial Q of law is involved in any case, it shall formulate that question Appeal be heard only on formulated Q of law by not less than 2 judges Nothing in this section shall be deemed to take away or Abridge the power of HC to hear, for reasons to be recorded, an appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such Q Decide the Q formulated Save as otherwise provided, Provision of CPC shall apply to appeal to HC HC can determine any issue which is not been determined by FAT or determined wrongly by FAT Copy of order to appellant and respondents
  • 69. PROSECUTION, SPECIAL COURTS & MISC. PROVISIONS  SPECIAL COURTS  FG in consultation with concerned CJ of the HC  For trial of offences punishable under this Act  By notification in official Gazette designate one or more courts of session as special courts or special for such areas or for such case or class or group of cases as may be specified in the notification  Special Courts shall not take cognizance of offence except upon a complaint in writing made by;  The authority; or  Any, officer of the FG or PG authorized in writing by that government by a General or special order  Trial shall be concluded as expeditiously as possible and every endeavor shall be made to complete it within 6 months of filing of complaint.  CrPC 1898 shall apply to proceedings of special courts  Appeal and revision to HC lies against the order of special court  OFFENCES AND PROSECUTIONS  Penalty for benami transaction- Rigorous imprisonment not less than one year may extend to 7 years and a fine equal to 25% of FMV of the property  Penalty for false information – knowingly submits false information or documents- Rigorous imprisonment of not less than 6 months may extend to 5 years and a fine equal to 10% of FMC of property  No prosecution shall be initiated without previous sanction of the Board (FBR)  MISC.  After issuance of notice, notwithstanding anything contained in transfer of property Act or any other law for the time being in force, any transfer shall be null an void  For the purpose of administration of this Act FG can issue directions it deem fit and authorities to follow such orders, instructions and directions
  • 70. MISC. PROVISIONS  Act to override other laws  Offences to be non-cognizable- Notwithstanding anything contained in CrPc 1898 offences under this Act shall be non- Cognizable  Offences by Companies-  Notices and summons not to be invalid on certain grounds-like mistake, omission or defect  Protection of actions taken under good faith  Power to make rules- FG by notification in official gazette  Reward to whistleblowers- Board by notification shall prescribe the procedure in this behalf and also specify the apportionment of reward sanctioned under this section
  • 71. CONCLUDED- THANK YOU VERY MUCH Syed Muhammad Ijaz Partner Huzaima Ikram & Ijaz www.hii.com.pk 0332-8655096 info@hii.com.pk