Pakistan adjusts laws to confiscate assets of terror financiers

The parliament soon will approve amending the Anti-Terrorism Act, officials say.

By Javed Mahmood

2012-10-31

ISLAMABAD – To stop terror financing in Pakistan, the government plans to amend the Anti-Terrorism Act (ATA) 1997 so that it would allow confiscation of property and assets owned by convicted terror financiers, a senior Finance Ministry official told Central Asia Online October 18.

“We have recently sent the draft of the ATA 1997 to the parliament for approval,” Finance Ministry advisor Rana Assad Amin said.

Parliament is expected to approve the amendment, which would empower the government to seize property, cash in bank accounts, and other assets such as vehicles and jewellery, he said.

Strict enforcement of such a law would deter anybody in Pakistan from donating to militancy domestically or abroad, said Rana, one of the key government officials involved in making policies and monitoring enforcement of laws to pre-empt terror financing and money laundering.

The Financial Action Task Force (FATF), which was established in 1989 to fight terror financing and money laundering, recently advised the Pakistan government to amend the ATA as part of an effort to stem the flow of money to terrorists, he said.

“The Special Investigation Unit, Federal Investigation Agency, Anti-Money Laundering/Terror-Financing Cell of the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) frequently co-ordinate with the FATF officials to tighten the laws and keep an eye on the financing transactions,” Rana said.

In recent years, the Pakistani government has enacted various measures to seal off the banking system, stock markets and currency exchange firms from terror financing.

The planned asset seizure amendment could be the last nail in the coffin of terror financing from within Pakistan, he said.

Frequent monitoring of financial transactions

“SECP frequently monitors the transactions to find out whether the investors and traders at stock markets were supporting terrorism financially,” SECP advisor Abdul Rehman Qureshi told Central Asia Online.

SECP’s teams pay surprise visits to the offices of the brokers who control stock market transactions and check their records to verify the genuineness of the investors and traders.

It is mandatory for investors and traders to provide their Computerised National Identity Card and National Tax Number to the brokerage houses, helping the government officials to identify sources of income and other credentials, he said.

In recent months, the FATF forwarded the names of nearly a dozen members or supporters of al-Qaeda and the Taliban to determine if they were involved in terror financing through stock markets in Pakistan.

“With the help of the stock markets and brokers, we checked the record, but not a single person named by the FATF was found as investor or trader at the stock markets,” he added.

Physical verification of accounts of NGOs, other non-profits

The SECP and the SBP have further tightened control of the Pakistani financial system and in September directed the banks and stock markets to meet the top executives of NGOs and of other not-for-profit organisations who authorise transactions and opening of accounts, Qureshi said.

In the past, banks and brokerage houses used to rely only on the documents submitted by their clients, even for transactions and the opening of accounts for more than Rs. 1m (US $10,400), he said; now bankers and brokers ensure that the transactions and the accounts are legitimate and are not involved in any kind of terror financing or money laundering.

Pro-militant entities, their members banned from opening accounts

“The SBP recently slapped a ban on the opening of bank accounts of the organisations that have any kind of links with the militant organisations in Pakistan, especially the banned outfits,” SBP chief spokesman Syed Wasimuddin said.

The ban applies to the organisations’ members and supporters too.

The SBP ordered the banks to implement the policy completely, he said, adding the SBP frequently directs banks to monitor their clients’ accounts for signs of supporting the militancy.

The banks haven’t detected a single case of terror financing since authorities tightened control of the financial system, he said.

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