NAB investigating on investing $8b in Dubai curtailing money laundering case

NAB investigating on investing $8b in Dubai curtailing money laundering case


ISLAMABAD: A parliamentary body decided on Tuesday to involve the National Accountability Bureau (NAB) in seeking information from the UAE about hundreds of Pakistanis who invested $8 billion in Dubai during the last four years.

The sub-committee of the National Assembly’s Standing Committee on Finance and Revenue took the decision in its first meeting held in Islamabad. The committee decided to write to the NAB chairman, seeking help from the anti-corruption watchdog in convincing authorities in the UAE to share the information.

The special parliamentary panel also decided to seek the assistance of Emaar Properties PJSC, and its subsidiary in Pakistan, about those individuals who have invested in the UAE.

The NAB can seek information from foreign jurisdictions either under section 21 of the National Accountability Ordinance (NAO) of 1999 or invoke the Anti-Money Laundering Act of 2010, said Faheem Khan, head of the International Cooperation wing at NAB.

The committee left the decision of invoking either NAO or AML Act on NAB authorities.

To a question, Faheem said that NAB had obtained information from the UAE in the Panama court case by exercising the right available under section 21 of the NAB Ordinance. He, however, expressed concerns that some attempts have been made to withdraw these powers by amending the NAB Ordinance.

PML-N’s Shezra Mansab Ali is heading the three-member panel with MNAs Isphanyar Bhandara and Asad Umar as its members. The special panel is looking into how the outflow of $8 billion occurred; whether the money can be brought back and how can future overseas investments by individuals be stopped.

A former governor of the State Bank of Pakistan (SBP) has already informed the parliament that the money flew abroad either through illegal channels – Hawala and Hundi – or through foreign currency accounts that enjoy secrecy under an Act of the parliament called the Pakistan Economic Reforms Protection Act of 1992.

Federal Board of Revenue (FBR) Chairman Tariq Pasha again expressed his department’s inability to get information from Dubai under the existing bilateral avoidance of double taxation treaty.

“The scope of the existing treaty is limited and the FBR has already taken the federal cabinet’s permission to renegotiate the treaty on lines of the new treaty model developed by the Organization of Economic Cooperation and Development,” Pasha said.

The FBR chairman said that his department has been writing to UAE authorities since 2011 but never received a response. He said that the last letter was written early this month.

PTI’s Asad Umar did not agree with FBR’s stance. He said that Article 27 of the existing treaty still provides some scope for seeking information and the FBR should move beyond just writing letters.

To a question, Pasha said that the FBR did not have any leverage over the UAE authorities and could not do much except writing letters.

The committee directed the FBR to raise the level of interaction with the UAE authorities and also explore the options of taking direct actions if they did not honour its commitments agreed to under the bilateral treaty.

The special panel also directed all the concerned government departments to review their existing laws and identify loopholes that allowed the people to remit money abroad without fulfilling legal obligations.

At present, Pakistan Economic Reforms Protection Act of 1992 and Income Tax Ordinance 2001 facilitate money laundering, according to independent legal and tax experts.

“Nobody considers foreign investment as a crime due to non-enforcement of laws against white-collar crimes in Pakistan,” said Asad Umer, who has been raising the issue of illegal investment in Dubai for a year.

State Bank of Pakistan Executive Director Syed Irfan Ali informed the committee that the central bank never gave permission to anybody to invest in real estate sector anywhere in the world. He said the central bank has the authority to allow up to $5 million investment abroad. The Economic Coordination Committee of the Cabinet (ECC) gives permission to invest more than $5 million overseas, Ali said.

A list that NAB submitted in an Accountability Court on Monday revealed that Finance Minister Ishaq Dar owns a flat at Emirates Hill Dubai and an apartment at Palm Jumeirah Dubai.

Published in The Express Tribune, October 25th, 2017.


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