ISLAMABAD – Federal Minister for Industries and Production Hammad Azhar on Friday informed the Senate that the present government had taken various steps for the elimination of Hawala or Hundi system for having transparent financial transactions in the country.
Replying to a question in upper house of the parliament, Hammad Azhar said the government was taking the matter of money-laundering seriously, and asked the opposition to stop making defensive posture on the matter.
In a written reply, the minister said that some measures against Hundi system through amendments in FERA, 1947 by the present government in February 2020 including enhancing simple imprisonment of two years to rigorous imprisonment of five years.
Other measures were the requirement of written complaints from State Bank of Pakistan (SBP), for tribunals to take cognizance of offences, has been abolished for unauthorized and illegal foreign exchange operators like Hundi and Hawala operators while the time to conclude trial has been fixed for tribunal like session court is now bound to decide the case within six months, he added.
He said that these FERA amendments on operations against hundi have enabled Federal Investigation Agency (FIA) to expedite identification and registration of hawala and hundi cases as well as the process of conducting raids, seizing relevant evidences and arresting the offenders.
He said that in July 2020, the existing MOU between FIA and SBP for mutual operation was revised aimed at establishing a more robust mechanism in the form of a core coordination committee to further enhance the on-going cooperation between both the agencies for the identification, registration and investigation of cases against hawala and hundi.
The house was informed that the FIA and SBP, in close collaboration launched a robust public awareness campaign across the country with a view to discourage the public from using hawala or hundi to encourage the public to identify and report illegal hawala or hundi cases to FIA and also to deter hawala or hundi operators from continuing their activities.
He said that the on-going exchange of information and inter-agency cooperation among the competent, under an existing multilateral MoU, was further strengthened through more frequent, regular and structured meetings and follow-ups by the Joint Working Group.
SBP and Pakistan Remittance Initiative (PRI) have intensified their promotional policy and supervisory efforts to facilitate remittances or payments through channels provided by licensed financial institutions like banks and exchange companies, given the risk of ML/TF arising from the illegal hawala or hundi.
Sharing the impact and outcome of SBP-PRI efforts, he said that in contrast to the World Bank’s projection of a decline of 23% in remittances to Pakistan during 2020 due to the global COVID-19 pandemic, remittances registered an increase of 7.8% during the peak of lockdowns in major sending corridors like in March-June 2020.
He said that the country witnessed a record high remittance of USD 23.1 billion during FY 2019-20 (July-June) with a 6.4% year on year growth.
He said that Pakistan introduced its first standalone Anti-Money Laundering law in September 2007 through promulgation of Anti-Money Laundering Ordinance, 2007 (AMLO) followed by Anti-Money Laundering Ordinance-2009 and Anti-Money Laundering Act, 2010.