• REPORT: MUHAMMAD UMAIR ZEB
  • The court says the Act doesn’t apply if no evidence proves money or properties made through criminal means.

ISLAMABAD: The Islamabad High Court (IHC) held that to attract an offence of money laundering, there has to be a nexus of the proceeds of crime with one of the predicate offences described under the schedule of the Anti-Money Laundering Act, 2010.

A leading tax expert, Muhammad Umair Zeb, told to The Khyber Mail on Sunday that IHC Chief Justice Athar Minallah, in a five-page judgment, declared the Money-Laundering Act would not apply if there was no evidence to prove the assets were made with the money gained through criminal means. The court ruled the FBR could not prove money-laundering in the case against a Rawalpindi businessman, Altaf Ahmad Gondal. A FIR was registered against the businessman, alleging he concealed his assets. “Making a criminal case of money-laundering against the petitioner is illegal,” the court ruled. It was a money concealment case, not money-laundering which can be processed under a different law .

Advocate Adnan Haider Randhawa on behalf of the petitioner has assailed the proceedings initiated by the respondents which subsequently led to the registration of FIR no 04/2021, dated 29.06.2021, under sections 3, 4, 8 and clause XIIA of the Schedule1 of the Anti-Money Laundering Act, 2010.

The impugned FIR was registered by the office of the Director-General, Intelligence and Investigation (Inland Revenue), which has been established under Section 230A of the Income Tax Ordinance, 2001.

Umair Zeb, Member Tax Bar Peshawar elaborate that the federal government, pursuant to powers conferred under clause (j) of section 2 of the Act of 2010 has notified the Director-General, (Intelligence and investigation, Inland Revenue) as one of the investigating and prosecuting agencies for the purposes. The Act of 2010 was promulgated in order to provide for the prevention of money laundering, combating the 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. Section 2 has defined various expressions, while Section 3 has described the offence of money laundering. The offence of money laundering has been made punishable under section 4 of the Act of 2010.

The chief justice noted that the Supreme Court in the cases titled, “National Accountability Bureau (NAB) v M/s Hudaibya Paper Mills Limited” and “Justice Qazi Faez Isa v The President of Pakistan” has held that in order to attract the offence of money-laundering, there has to be a nexus of the proceeds of crime with one of the predicate offences described under the schedule of the Act of 2010.

The judgment said that the shows cause notices, dated 05.07.2021 and 24.12.2021 and the FIR, dated 29.06.2021 unambiguously show that the allegation against the petitioner was regarding non-declaration or concealment of assets.

The court noted that the respondents have failed to show any material whatsoever to, prima-facie, establish the existence of the ingredients of the offence of money laundering described under the Act of 2010.

The proceedings initiated by the respondents that had led to the registration of a criminal case relating to money laundering under the Act of 2010 were bereft of jurisdiction, illegal and void.The FIR no 04/2021, dated 29.06.2021, and the proceedings relating thereto are declared as illegal, without lawful authority and jurisdiction. The proceedings are; therefore, set aside and the impugned FIR no 04/2021, dated 29.06.2021, stands quashed.

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