CBR officers to be trained in anti-money laundering

International consultants and experts will impart training in anti-money laundering and anti-terror financing to selected officers of Central Board of Revenue (CBR).

The State Bank of Pakistan (SBP) has so far issued its restricted anti-money laundering guidelines for liabilities (deposits) and is yet to issue anti-money laundering guidelines for assets (loans and investments) of the banking sector.

The Securities and Exchange Commission of Pakistan (SECP) is yet to implement anti-money laundering provisions with regard to the corporate sector of the country.

The issues related to taxation of un-accounted for money transactions across the border are yet to be tackled by the CBR, but sources said before starting any action to tackle money-laundering and terror-financing, the CBR wants its officials to be trained by international consultants. At present, the Federal Ministry of Interior is empowered to start legal action under anti-money laundering and terror-financing laws and on the written orders of the ministry, the State Bank of Pakistan can pass orders for freezing of bank accounts.

Sources said since there is no permanent linkage between Ministry of Interior, SBP, CBR, SECP, the country is being used as a launching pad for money-laundering and terror-financing by Pakistanis and others. Growing evidences show that now foreigners, knowing the loose coordination among the policy-makers, use Pakistani channels to launder their ill-gotten money.

The training will also cover the Forensic Audit Techniques (FAT) and it will be first training course of FTA for Pakistani officials.

Some Pakistani audit firms have FTA experts but they are not advertising their skills, for reasons best known to them.

FTA is defined as “application of auditing skills to situations that have legal consequences.”

Forensic fraud is explained as “recording the transactions in the books of accounts without substance and actual transactions”.

FTA is an investigation of fraud to gather evidence, which could be presented in a court of law. However, there is an increasing use of auditing skills to prevent fraud by identifying and rectifying situations, which could lead to frauds being perpetrated, senior officer explained.

CBR is already making efforts to curb “missing traders fraud”.

Another type of is forensic export of goods. The (exporting) goods declared are those on which Duty Draw Back could be claimed, but actually other cheap exporting items were exported instead of documented goods.

The FTA training of tax officials, and later on of bankers and officials of law enforcement agencies will help in detecting organised financial crimes and under-reporting of taxes.

After the completion of training, a busting plan to gangs involved in the money laundering and terror financing will be launched.

A senior officer said, “Training on anti-money laundering would play a key role in checking transfer of un-explained funds. Tax officials would be clearer about the CBR role in the anti-money laundering. The training would cover anti-money laundering law, legal system and provisions of taxation on un-explained assets, investment, expenditure and “benami” (front man) transactions. It would also elaborate the legal mechanism pertaining to anti-money laundering for combating terrorism.”

http://www.thenews.com.pk/print1.asp?id=43917