ISLAMABAD: The Supreme Court on Monday sought details of at least 100 persons who had been issued notices by the Federal Board of Revenue (FBR) for not disclosing their assets and properties abroad, after the court was informed that the Pakistanis owned properties worth $150 billion in the United Arab Emirates (UAE) alone.

A three-judge bench, headed by Chief Justice of Pakistan Mian Saqib Nisar, asked FBR chairman Mohammad Jahanzeb Khan that the information be provided to the SC registrar directly at his office in a sealed envelope. In case of any leak, the CJP cautioned the SC registrar and the FBR chairman that they would be held responsible. He added that the court did not want to malign or stigmatise any individual.

The observation came when the FBR chairman apprised the SC that it had issued notices to individuals possessing 225 properties in the UK and Shabbar Zaidi of A.F. Ferguson said properties worth $150 billion in the UAE were owned by Pakistanis.

The court had initiated suo motu action on reports about illegal money transfer from Pakistan to other countries when it came to its notice that a large number of citizens were maintaining accounts in other countries without paying tax on the money or disclosing it to the relevant authorities.

FBR chief informs apex court notices have been issued to individuals possessing 225 properties in UK

A report furnished before the court also highlighted top tax havens with estimated $100 billion stashed in the UK, the US and European Union in addition to the money parked in real estate there, besides $200 billion kept in Switzerland (as per the statement of Swiss Foreign Minister Micheline Calmy-Rey) as well as Hong Kong, BVI, Bahamas, Channel Island, Seychelles etc.

Appreciating Mr Zaidi’s efforts, the court asked him to render assistance to the court for bringing the capital back to Pakistan. The court observed that foreign currency accounts and illegal means of Hawala were mostly used for the transfer of money abroad.

During the hearing, Justice Umar Ata Bandial explained that the persons being discussed were the ones who had amassed wealth in Pakistan and transferred it to other countries through illegal means. The judge also deplored that the terms of reference (ToR) proposed for bringing back the stolen money from abroad were too mild for those who should have been penalised.

Referring to the Foreign Assets (Declaration and Repatriation) Ordinance 2018, Justice Bandial said a similar scheme was launched in Indonesia where 15 per cent tax was imposed but the government could collect a mere $8.1 billion, which was nothing, despite offering two per cent tax incentive.

Strong recommendations should have been made in the ToR, Justice Bandial observed, adding he expected the proposals to contain proper legislation for forfeiture of the properties and the assets of those guilty.

The CJP said these were not ordinary times, as considerable earnings without payment of tax had been transferred abroad. He said the court was not being taken into confidence despite the fact that the matter had been initiated seven to eight months ago.

State Bank Governor Tariq Bajwa assured the bench that monthly reports would be furnished in the apex court after those who amassed assets abroad were issued the notices. He also informed the court that Prime Minister Imran Khan had also been briefed on Hundi and Hawala on Monday, as the government was trying to find a way forward. The court then asked for record to see outcome of the meeting.

The newly appointed Attorney General Anwar Mansoor Khan told the court that the new government had constituted a task force on Aug 27 in which representatives of the State Bank of Pakistan, the National Accountability Bureau (NAB), Security and Exchange Commission of Pakistan (SECP) were also included. The purpose of the task force is to develop proper legislation to suggest ways how to go after such individuals to recover the money.

Keeping in view the interest of the apex court as well as the people of Pakistan, the AG explained, the new government was very serious about the issue and would go in its own direction. However, he suggested the court to continue to seek reports from the departments concerned to discourage them from showing slackness in this regard.

Top money laundering source countries

In a set of recommendations on the scope and ToR, a report explained that the British government through a National Crime Agency Report for 2018 had listed Pakistan among the top three money laundering source countries after Nigeria and Russia.

Therefore, it is imperative to make out an assessment of the total Pakistani money stashed in the foreign assets and accounts.

The report said the Federal Investigation Agency (FIA) till date had taken cognizance of 2,750 undisclosed properties of Pakistani nationals held in the UAE in different names and inquiries were under way. If each property was valued at an estimate of Rs40 million, the value of assets in the UAE under inquiry with the FIA would be worth Rs100 billion, which was 2.5 per cent of Rs4,240 billion — the value of officially known assets of Pakistanis in the UAE.

It said FIA’s anti-corruption wing instituted 54 criminal inquiries under the Foreign Assets Declarations Regulations 1972 against 662 of 3,549 property holders.

Published in Dawn, September 4th, 2018