The Federal Investigation Agency (FIA)
wants the power to see details of all bank accounts in
its search for benami accounts, or accounts under fake
names, that are being used to launder money by terrorist
groups.
Sources in the agency told Daily Times
that this came up at a meeting between senior FIA officials
and Interior Minister Faisal Saleh Hayat at a meeting
on August 11. The FIA officials briefed the minister on
the hurdles their investigators were facing in trying
to find benami accounts in commercial and national banks.
The agency’s Economic Crime Wing
(ECW) and Commercial Bank Circle (CBC) have been assigned
the task of tracking benami accounts, but the sources
said they were finding it difficult because of the banks
reluctance to give up information about account holders.
FIA CBC Director Illays Sheikh told Daily
Times that only the Income Tax Department was empowered
to get details of account holders from banks, but the
FIA had to present a court order to get the details of
accounts.
FIA Director General Syed Asad Muhib told
Daily Times that illegal money transactions being carried
out through benami accounts could not be checked effectively
because FIA investigators had to rely on the information
given to them by the banks.
Mr Sheikh said several terrorist groups
were operating benami accounts, though the agency had
had no success in tracing such transactions yet. “The
FIA is pursuing such inquiries on the complaints of banks
and individuals,” he said.
The FIA feels it will be able to better
control money laundering when a proposed anti-money laundering
law is enacted.
The government geared up efforts to arrest
money launderers and terrorist financiers after the September
11 attacks. A group was formed in 2002 consisting of officials
from the National Accountability Bureau, the State Bank,
the Securities and Exchange Commission, the FIA, the Law
Ministry and the Foreign Affairs Ministry to prepare legislation
on money laundering.
The sources said the government had drafted
a law against money laundering and terrorist financing,
which recommended a maximum term of 14 years rigorous
imprisonment for offenders as well as forfeiture of property
and other assets acquired in the proceeds of money laundering
and terror-financing.
The sources said that according to the
draft law, terrorist financing had been defined as “any
person or entity who directly or indirectly provides or
invites another person to provide support or makes property
or financial services available intending that it be used
to carryout an act that constitutes a terrorist offence
or provides a benefit to a terrorist group”. The
draft law gives NAB, the FIA and the Anti-narcotics Force
the authority to investigate and prosecute money launderers
and related criminals in their courts.
Corporate and Industrial Restructuring
Corporation (CIRC) Member Naeemuddin Khan said that it
was difficult for terror financiers to maintain benami
accounts because the State Bank of Pakistan had declared
severe penalties for banks that allowed such accounts.
Mr Khan said during a major operation
between 1991 and 1993 against money laundering, banks
were directed to ensure that clients were physically present
when their accounts were opened.
He said that a legal and institutional
framework was currently being prepared and the State Bank
had developed two regulations to check benami accounts.
Mr Khan said that fine for holding a benami account was
millions of rupees.
A State Bank official said the Securities
and Exchange Commission of Pakistan had taken measures
and set up an Anti-Money Laundering Unit.
According to an Interior
Ministry notification of August 16, the FIA’s CBC,
ECW and Corporate Crime Wing have been merged with NAB,
which would now be in charge of tracking accounts. However,
the practical implementation of the merger is expected
to take a few months, during which time FIA will continue
doing the job. The sources said that the idea of the FIA
restructuring was based on extending NAB’s investigation
network. After the merger, around 750 FIA officers will
be attached with NAB.
