Aml 2010 benami_2017_taxbar

ANTI MONEY

LAUNDERING ACT, 2010BY 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 shallhave effect notwithstanding anything inconsistent contained in any other law for the time being inforce.

(2) The provisions of this Act shall be in addition to, and not in derogation of, the Anti Narcotics ForceAct, 1997 (III of 1997), the Control of Narcotics Substances Act, 1997 (XXV of 1997), the Anti-terrorismAct, 1997 (XXVII of 1997) and the National Accountability Ordinance, 1999 (XVIII of 1999) and anyother 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 issuedpowers conferred, assumed or exercised, by the Federal Government, Financial Monitoring Unit or itsofficers on or after the 5th January, 2008 and before the commencement of this Act, shall be deemedto have been validly done, made, issued, taken, initiated, conferred, assumed, and exercised andprovisions 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 suchproperty is proceeds of crime;

(b) conceals or disguises the true nature, origin, location, disposition, movement or ownership of property, knowingor 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 suchproperty is proceeds of crime; or

(d) participates in, associates, conspires to commit, attempts to commit, aids, abets, facilitates, or counsels thecommission 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 beinferred 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 respectivepredicate 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 incorporatedor 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 thecommission of a predicate offence or a foreign serious offence;

(r) “property” means property or assets of any description, whether corporeal or incorporeal, movable orimmovable, tangible or intangible, and includes deeds and instruments evidencing title to, or interest in, suchproperty or assets, including cash and monetary instruments, wherever located;

[(ra)“property involved in money laundering” means proceeds of crime, property derived or obtained directly orindirectly from the offence of money laundering and property used or intended to be used in commission of theoffence 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


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)


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)*


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 [moneylaundering] shall be punishable with rigorous imprisonment for a term which shall notbe less than one year but may extend to ten years and shall also be liable to fine whichmay extend to one million rupees and shall also be liable to forfeiture of propertyinvolved in money laundering or property of corresponding value.

Provided that the aforesaid fine may extend to five million rupees in case of a companyand every director, officer or employee of the company found guilty under this sectionshall also be punishable under this section.

Hierarchy under AML Act 2010Fe

dera

l G

ove

rnm

en

t

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 Minister Chairman

Minister on Foreign AffairsMember

Minister for Law and JusticeMember

Minister for Interior Member

Governor SBP Member

Chairman SECP Member

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 FBR Member

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 otherproceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken inpursuance of any of the provisions of this Act shall be invalid, or shall be deemed to be invalid merely by reason ofany 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 theintent 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 hundredthousand rupees or both

In the case of the conviction of a reporting entity, the concerned regulatory authority may also revoke its licence orregistration 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, financialinstitution, non-financial business or profession or intermediary which report a suspicious transaction or STR pursuant to thislaw or any other authority, are prohibited from disclosing, directly or indirectly, any person involved in the transaction that thetransaction 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 ofthis Act or of any rule, regulation, direction, or order made hereunder is a company, every person who, atthe time the contravention was committed, was responsible for such contravention in the conduct ofthe business of company shall be deemed to be guilty of the contravention and shall be liable to beproceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to punishment if heproves that the contravention took place without his knowledge or that he exercised all due diligenceto prevent such contravention.

(2) Notwithstanding anything in sub-section (1) where a contravention of any of the provisions of this Actor of any rule, regulation, direction or order made hereunder has been committed by a company and it isproved 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 otherofficer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded againstand punished accordingly.

Explanation. ——For the purposes of this section, “director” in relation to a firm, means a partner in thefirm.

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 underAML/CFT Regulations

Annexure – II Examples or Characteristics of Suspicious Transactions (Red Alerts)


NON FINANCIAL COMPANIESR

1-

Cu

sto

mer

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

Government Accounts



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’.



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.



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 orexaggeratedly 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;



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;



Annexure-II- Transactions which do not make economic sense or inconsistent with customer’sbusiness 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.



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;



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



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);




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;




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 geographicareas 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.



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.



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);




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 anarrangement (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);




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 withthe 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 thatcountry;(c) seeking or providing of assistance or evidence in respect of any offence under this Act or under the corresponding law inforce 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 CriminalProcedure, 1898 (Act V of 1898), if, in the course of an investigation into an offence or other proceedings under this Act, theinvestigating officer or any officer superior in rank to the investigating officer believes that any evidence is required in connectionwith investigation into an offence or proceedings under this Act and he is of opinion that such evidence may be available in anyplace in the contracting State, he may, with the prior permission of the head of that investigation agency, issue a letter of requestto 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

FMU Presentation.pptx

BENAMI TRANSACTIONS

(PROHIBITION) ACT 2017

SCHEME OF THE ACT

CHAPTER I - PRELIMINARYCHAPTER II - PROHIBITION OF BENAMI TRANSACTIONSCHAPTER III - AUTHORITIESCHAPTER IV - INFORMATION COLLECTIONCHAPTER V - ATTACHMENT, ADJUDICATION AND CONFISCATIONCHAPTER VI - FEDERAL APPELLATE TRIBUNALCHAPTER VII - SPECIAL COURTSCHAPTER VIII - OFFENCES AND PROSECUTIONCHAPTER 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/2DETAILS 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


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/themFG-may suspend CP or member in respect to whom inquiry is being referred to CJ until FG passes an order on receipt of inquiry reportFG may regulate the procedure for inquiry in the manner as may be prescribed


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 fitOfficers and employees shall discharge their functions under superintendence of CPSalaries, 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


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

Init

iati

on

of

inq

uir

y b

ase

d

on

in

form

ati

on

in

po

ssess

ion

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 AuthorityR

ece

ipt

of

Refe

ren

ce

fro

m In

itia

tin

g O

ffic

er

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 to be recorded in writing

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-FATA

ny

pers

on

incl

ud

ing

In

itia

tin

g o

ffic

er

Ag

gri

eve

d b

y th

e o

rder

of

Ad

j. A

uth

.

wit

hin

45 d

ays

of

rece

ipt

of

Ord

er

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-HCA

ny

part

y A

gg

rieve

d b

y th

e d

eci

sio

n o

r

ord

er

of

FAT w

ith

in 6

0 d

ays

of

serv

ice

of

deci

sio

n/

Ord

er

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 IjazPartner

Huzaima Ikram & Ijazwww.hii.com.pk0332-8655096

[email protected]

http://www.hii.com.pk/