Parliamentary Research Digest
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PAKISTAN INSTITUTE FOR PARLIAMENTARY SERVICES DEDICATED TO PARLIAMENTARY EXCELLENCE ISSN # 2414-8040 Parliamentary Research Digest VOLUME 5,ISSUE 10 OCTOBER,2018 INSIDE THIS ISSUE: Editorial The International Democracy Day is celebrated on September 15 every year; PIPS held its 4th OPINION annual Seminar to commemorate the event with this year’s Inter Parliamentary Union (IPU) Pakistan under Grey List of Theme – What if Parliamentary Oversight did not Exist along with Inter University Quiz competition Financial Action Task Force on Know Your Parliament, pro-actively participated by 115 faculty and students lead by parliamen- (FATF) tary panel comprising Senator Faisal Javed and MNA Ms Shahida Akhter Ali. The Institute held Page 01 three orientation programmes and a budget round table in September for Members of the Parlia- ment. Honourable Chairman Senate of Pakistan Senate Sadiq Sanjrani took charge as the new President Board of Governors. This October 2018 Issue of PIPS Parliamentary Research Digest includes invaluable articles on ANALYSIS Pakistan and the FATF grey list; Turkey-US Relations at cross roads and an analysis of the Fi- Supplementary Finance Bill 2018: nance (Supplementary) Bill 2018-19 recently presented in the National Parliament. Like the last Summary and Salient Features couple of issue, we also present a run-down of History of Provincial Assembly of Punjab. Page 07 PIPS team continues to serve over 1254 individual MPs and committees at the Senate of Paki- stan, National Assembly, four provincial assemblies as well as legislative assemblies of Azad Jam- mu and Kashmir and Gilgit Baltistan with legislative, research, capacity building and outreach services. ANALYSIS Please feel free to contact PIPS for any research or briefing papers at [email protected]. Turkey US Relations at Cross- roads Muhammad Rashid Mafzool Zaka Page 13 D.G (Research and Legislation) PARLIAMENTARY HISTORY History of Provincial Assembly of Punjab Page 20 Editorial Board Editor: Muhammad Rashid Mafzool Zaka Sub Editor: Tehseen Khalid Members: Fakiha Mahmoo PIPS organizes New Members Orientation for the newly elected Members of National Assembly of Pakistan, September 26-28, 2018 Muhammad Rizwan Manzoor Provincial Assembly of Punjab (Pakistan) Pakistan Institute for Parliamentary Services 2018 OPINION Pakistan under Grey List of Financial Action Task Force (FATF) Maria Irfan PIPS Associate The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions. It was formed at G 7 summit meeting in Paris. The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. 1 FATF issues series of recommendations that, when followed, may help curb terror financing through money laundering. The FATF monitors financial transactions of countries worldwide, reviewing if they have taken the required steps against curtailing the flow of funds to blacklisted organizations i.e. mafias, terrorist outfits, banned groups who face economic sanctions from UN-member countries. Based on these facts, FATF releases a list of countries after its review and sorts them according to their performance against activities they have deemed illegal.2 The FATF’s decision making body, the FATF plenary body, meets three times a year. History of Financial Action Task Force (FATF) Recognizing the threat posed to the banking system and to financial institutions in Paris (1989), the G-7 Heads of State or Government and President of the European Commission convened the Task Force from the G-7 member States, the European Commission and eight other countries. 3 The FATF currently comprises 35 member jurisdictions and 2 regional organizations including China, India, United States, United Kingdom, and Japan.4 The FATF grey list is a short description of the Financial Action Task Force list of Non-Cooperative Countries and Territories (NCCTs).5 This blacklist has been issued by Financial Action Task Force FATF since 2000 and it lists countries which it finds to be non-cooperative in the global fight against money laundering and terrorist financing, calling them non- cooperative countries or territories. FATF and other organizations take an indirect route to evaluate the sensitivity of a country to terror financing by tracking and evaluating their laws and their implementations. Some countries included in this list are; Ethiopia, Iraq, Yemen, Serbia, Syria, Srilanka, Trinidad and Tobago, Tunisia and Vanuatu.6 Pakistan is placed again in this list on 27 June, 2018. 1 http://www.fatf-gafi.org/countries/#FATF browsed Sept 25, 2018 2 Aitzaz,Hassan. “What is FATF and What Does Pakistan’s Inclusion in Its Grey List Mean.” ProPakistani. Accessed July23,2018 https://propakistani.pk/2018/02/26/fatf-pakistans-inclusion-grey-list-list-mean/ 3 “History of the FATF”. Fatf-gafi. Accessed July24,2018 http://www.fatf-gafi.org/about/historyofthefatf/ 4“FATF Members and Observers”. Fatf-gafi. Accessed July23,2018 http://www.fatf- gafi.org/about/membersandobservers/ 5 “About FATF”. Faf-gafi Accessed July24,2018 http://www.fatf-gafi.org/about/ 6 Usman, Hayat. “Pakistan on FATF’s Grey List-What, Why and Why Now”. Dawn Accessed July24, 2018 https://www.dawn.com/news/1418143 PIPS Parliamentary Research Digest- Volume: 5, Issue: 10 Page 1 Pakistan Institute for Parliamentary Services 2018 Pakistan as Member of Asia/Pacific Group on Money Laundering (APG) The purpose of the Asia/Pacific Group on Money Laundering (APG) is to ensure the adoption, implementation and enforcement of internationally accepted anti-money laundering and counter-terrorist financing standards as set out in the FATF Forty Recommendations and FATF Eight Special Recommendations. 7The effort includes assisting countries and territories of the region in enacting laws to deal with the proceeds of crime, mutual legal assistance, confiscation, forfeiture and extradition; providing guidance in setting up systems for reporting and investigating suspicious transactions and helping in the establishment of financial intelligence units. The APG also enables regional factors to be taken into account in the implementation of anti-money laundering measures. Origins of the APG go back to "awareness raising" activities by the FATF in early 1990s as part of its strategy to encourage adoption of money laundering counter-measures throughout the world. In order to achieve more concrete results, Australia agreed to set up a Secretariat for the purpose of obtaining regional commitment and establishing a regional FATF-style body with practical objectives. Subsequently, an agreement was reached in Bangkok in 1997 which created the APG. The first meeting was held in Tokyo in 1998 and then annually thereafter. Following the events of 11 September 2001, the APG expanded its scope to include the countering of terrorist financing. The APG conducts mutual evaluations of its members and holds a periodic workshop on money laundering methods and trends. The APG is supported by a Secretariat, which serves as the focal point for its activities. The APG became an Associate Member of the FATF in 2006. Pakistan is one of the over 41 member countries and 8 observer nations in the APG. Pakistan and FATF Grey List, the History: Pakistan was on grey list previously in 2008 and for three years between 2012 and 2015 but due to its continuous efforts the Task Force removed Pakistan from the list in 2015 after the country agreed to take actions against Hafiz Saeed’s Jamaat-ud-Dawa (JuD), Falah-e- Insaniyat Foundation (FIF) and Lashkare Tayyba.8 Earlier in February 2018, some member countries including USA, UK joined by France and Germany nominated Pakistan to be placed in FATF Grey list during the International Country Risk Guide (ICRG) session which was held a day before the FATF plenary.9 Upon this the advisor to the then Prime Minister, Dr Miftah Ismail offered that Pakistan was ready to submit a report on their concerns and FATF should take their decision based on that. At that time Japan supported Pakistan. ICRG also agreed to that proposal that FATF should take decision based on those measures. China also advised Pakistan that it should sign an agreement with FATF based on its measures to be taken in upcoming three months. The pre plenary meeting ended positively and this resulted in the tweet from the then Defence Minister of Pakistan, Khawaja Asif in which he announced that FATF postponed the decision. However to the surprise of Pakistani authorities FATF decided to place Pakistan on 7 http://www.fatf-gafi.org/pages/members/asiapacificgrouponmoneylaunderingapg.html 8 Shahbaz,Rana. “Pakistan to Go on FATF Terror Financing List in June”. The Express Tribune. Accessed July27,2018 https://tribune.com.pk/story/1643185/1-pakistan-go-fatf-terror-financing-list-june/ 9 Ibid. PIPS Parliamentary Research Digest- Volume: 5, Issue: 10 Page 2 Pakistan Institute for Parliamentary Services 2018 the Grey list due to continuous pressure from USA and on June, 27 Pakistan was placed in this list due to “strategic deficiencies” in anti-money laundering and terrorism financing. 10 This decision was due to US allegations that Pakistan has not taken any actions against Hafiz Saeed, the mastermind behind Mumbai attacks and Pakistan’s lack of action against terrorist organizations likes Jamaat-ud-daawa, Jaish-e-Muhammad and other sectarian groups. The decision highlighted a weakness that Pakistani courts during conviction were not awarding penalties on charge of terrorism-financing also that Pakistan was unable to control cross border smuggling of cash. After the decision of placing Pakistan on the grey list in the first plenary meeting in February, Pakistan represented a 26 point action plan to FATF prepared by ICRG. After this negotiation Pakistan was formally placed on the grey list in June 2018. If failed to implement this plan, Pakistan would be placed on the “Blacklist.” This ranking in grey list is making the position of Pakistan worse in other indexes.