Prime Minister Imran Khan announced to bring the stolen money back from abroad to solve the financial problems of Pakistan and to strengthen the economy. According to estimates this amount is around$350 billion.
Even, if half of this money is retrieved successfully than Pakistan can get rid of its all foreign loans. Imran Khan used this slogan alongside with anti-corruption slogan to gain support in the masses and middle class.
He assured his supporters during the election campaign that his honest leadership will bring this money back. He was used to make such statements in almost every speech while in the opposition. There are many in the country that started to believe to that as soon as Imran khan will take oath as prime minister, the process to retrieve stolen money will start.
The PTI government even established a task force to lay out the plan and strategy to bring the looted money back. The statements of government ministers and advisor on accountability of federal government Shahzad Akbar raised the hopes. Many people still thinks that it is the matter of days or months that all the money stashed in the bank accounts and properties abroad would be brought back.
There is heated debate going on in the media. These discussions are much polarised as different experts have different views on this issue. Nobody can oppose the idea to bring back the stolen, plundered, untaxed assets stashed abroad by Pakistanis.
This money belongs to Pakistani people. But the differences and controversies exist about the conflicting figuresof stolen money and assets and application of various laws, procedures and methods for retrieving funds.
But it is still a myth that this money can be brought back. Lot needs to be done to even start this process. It is so far all about statements, meetings and some MOUs signed. It’s a long way to go. There are many obstacles in the way.
The existing laws are not up-to-date and create hurdles in making practical steps and measures to retrieve the stolen money and assets. The FIA says that Foreign Assets Declaration Regulation, 1972 is a non-declaration and not defined as a predicate offence, and the authority was not authorised to investigate.
Foreign Exchange Regulation ACT, 1947, Income Tax Ordinance 2001, Section 111-(4) protect sources if unexplained income from foreign remittance and Pakistan Economic Reforms ACT, 1992 Section-4 and 5 also protect sources of unexplained income from foreign remittance.
About international laws creating hurdle in investigators’ way, the institutions informed the Supreme Court that United Nations’ Convention against Corruption 2004 did not authorise the FIA to take action against under-questioned individuals. Similar is the case with the United Nations’ Convention against Trans-National Organised Crime 2000.
It was also informed to the Supreme Court that all institutions are facing many challenges for execution of Mutual Legal Assistance (MLA) request and recovery of stolen assets of Pakistani citizens placed in foreign jurisdictions.
Main challenges include: Non–provision of autonomy in operations and financing, lack of any legally binding international instrument, lack of legally binding bilateral/multilateral treaties with different states, consumption of excessive time for technical assistance by the foreign states for drafting of requests for MLA as per their domestic legal framework, non-uniformity of international cooperation laws in foreign jurisdictions, particularly in dual criminality cases and number of channels involved in foreign jurisdictions before the requests of MLA reaches its desired agency or legal office for further evaluation and technical guidance for eventuality.
So far, two figures or rather estimates have come up in the proceedings. Coming to figure of $200 billion in Swiss accounts, this was officially communicated to the Cabinet through a summary signed on August 26, 2013 by Tariq Bajwa, the then chairman FBR and now Governor SBP.
Well known tax expert Shahbar Zaidi informed the Supreme Court that $150 billion wealth have been stashed by Pakistanis in different countries. He said that the UK authorities are helping Pakistan identify these properties. The UK revenue authority has provided details of as many as 225 properties, he added.The combine amount is around $350 billion.
According to Chairman Federal Board of Revenue (FBR) Jehanzeb Khan that 250 persons have been identified who have properties and accounts abroad, adding they have been issued notices. It was informed that in the UAE only, $1.8 billion worth properties of Pakistanis have been identified.
A report prepared by FIAsays that by the close of Amnesty Scheme 2018 on July 31 last, 5,363 individuals/companies had disclosed foreign assets worth Rs1, 003 billion ($8.1 billion) with major share of declared assets located in the UAE. Properties/accounts holders in other tax haven countries benefited only marginally from this scheme.
Top tax havens for Pakistanis are the UAE, the UK, the USA, the EU, Hong Kong, BVI, Bahamas, and the Channel Island. According to Zaidi, around US $100 billion are parked in real estates sectors in the UK, USA and the EU, while in Switzerland there are US $200 billion as per the statement of Swiss Foreign Minister Micheline Calmy-Rey in 2014.
Authorities probing illegal foreign accounts and properties of thousands of Pakistanis made shocking revelations that the volume of these assets hidden in different tax havens abroad reached up to US$350 (Rs43 trillion).
The declared amount of US$8.1 billion is around 2.3% of overall illegal accounts worth US$350 by thousands of Pakistanis who allegedly violated national laws while establishing their assets abroad.
The expert selected by the new government, Barrister Shahzad Akbar who has been working with National Accountability Bureau, has no idea about retrieving funds from abroad under bilateral or multilateral tax treaties signed by Pakistan.
He cannot think beyond the Mutual Legal Assistance (MLA) or the Stolen Asset Recovery (STAR) initiative. The most viable method for retrieving untaxed funds is to seek actionable information using the OECD Multilateral Convention (MLI) signed by Pakistan on September 14, 2016, enabling the FBR to officially receive information about offshore accounts and assets of Pakistanis with effect from September 1, 2018.
The key aspects and steps are still missing from the official discourse on this issue. The government should tell people the truth. False hopes and mere slogans are not going to serve the purpose. Tell people that serious efforts will be made but it will take some time to achieve the desired results.
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25 August, 2019