The chief justice of Pakistan (CJP) on Thursday formed a three-member committee to prepare terms of reference (TORs) that can help the government recover money smuggled out of the country and stored in foreign accounts.

The committee will be headed by State Bank of Pakistan (SBP) Governor Tariq Bajwa and comprises Federal Board of Revenue (FBR) Chairman Mohammad Irshad and Federal Finance Secretary Arif Ahmed Khan.

CJP Mian Saqib Nisar formed the committee after the FBR claimed there were no legal guidelines available for the tax authority to retrieve money stored in banks abroad.

Justice Nisar had taken a suo motu notice of foreign bank accounts held by Pakistani citizens on February 1. The three-member SC bench headed by Justice Nisar and comprising Justice Umar Ata Bandial and Justice Ijaz-ul-Ahsan, had asked the FBR to share in a report submitted in court what steps it had taken regarding the matter of offshore companies after the release of the Panama Papers and Paradise Papers, which revealed details of wealth stored abroad by Pakistani citizens.

The court directed the FBR, SBP, Securities and Exchange Commission of Pakistan and Finance Ministry to submit a detailed report on the matter in court.

The CJP said that the Foreign Ministry and SBP should share details of Memorandums of Understanding and agreements to be inked with various countries for the return of looted money to the country.

Additionally, the CJP directed FBR Chairman Mr Tariq Mahmood Pasha ─ a close aide of former finance minister Ishaq Dar ─ to tell the court how many Pakistanis hold accounts in Swiss banks, and banks in other countries.

The report that was submitted today highlighted the legal difficulties being faced by the FBR. According to the report even though the FBR was investigating Pakistanis that were named in the Panama Papers, there was no legal framework available for the provision of information regarding foreign assets and accounts. However, an amendment can enable authorities to gain details of the money and assets stored abroad.

The CJP said that while there were citizens who had used legal means to transfer money abroad, a majority of people smuggled the money into foreign countries.

The officials were told by teh bench to investigate the amount of money that had been transferred from Pakistan to foreign accounts.

Justice Bandial told the committee to investigate how much money was transferred illegally and at the same time warned that the investigation must not exceed legal boundaries.

"First you need to identify the people who transferred their money abroad without paying tax [on it]," Justice Bandial said.

"This is a matter of tax payment and public welfare," he added.

The chief justice expressed his confidence in the committee officials and said that the nation will hail them as "heroes" if they succeeded in paving a legal channel for bringing back the money stored abroad.

"It is said that all our debts would be paid if the money stored abroad is brought back to the country," the CJP said.

Justice Bandial, however, said that the investigation should not "create any panic" in the country.