Parliament likely to delay BCO, AML approval

KARACHI - Contrary to the expectations of Ministry of Finance, the Parliament is expected to delay the approval of Banking Companies Ordinance (BCO) and Anti-Money Laundering Bill (AML) by January 2010, sources told The Nation on Thursday.
Sources said the national legislature seems reluctant to pass both the bills in its upcoming session, which is tentatively scheduled to be held on December 22, 2009, due to some political reasons. Thus, there are chances that the Ministry of Parliamentary Affairs would submit the law drafts of such legislations next year in the 19th session of the Parliament.
Sources further said that as per the announcement of the finance minister, the law draft of Value Addition Tax (VAT) would also be presented in the Parliament in the month of January next year against the governments commitment with the IMF for submitting this law to the Parliament by December-end 2009.
It is pertinent to mention that the National Assembly Standing Committee had approved the Banking Companies Ordinance and Anti-Money Laundering Bill on November 03 and Competition Ordinance on November 12 this year.
However, the National Assembly in its most recent session failed to introduce the 'Competition Bill in the house with a view to be passed from its members, and now likely to be promulgated by the President before its expire on November 28, 2009.
The economic and financial experts, analysts and the general public of Pakistan are unable to comprehend why the Parliament has not passed the Competition Bill despite the fact that it had been approved unanimously from the National Assembly Standing Committee on Finance on the said date.
It is important to note that the IMF, in its second review, had also pointed out that structural conditionality for June-end 2009 with regard to the preparations of legislative amendments to strengthen the effectiveness of SBP enforcement in the area of banking supervisions was not met by the authorities.
According to IMF, in order to create more breathing room for banks, the SBP has revised downward the targeted increases in minimum capital requirements (to be met gradually), but has maintained unchanged the minimum capital adequacy ratios to ensure the financial strength of banks.
The IMF document further sated that the authorities were supposed to present BOC draft amendments to the parliament by end-August 2009, but the submission of this legislation had been delayed.
BCO (amended) is an important piece of legislation, which deals with enhancing the SBPs enforcement powers in banking supervision and regulatory framework. Moreover, AML ordinance (amended) addresses the issues related to financing terrorism, expansion in the list of predicate offences etc.
It is much astonishing that why the government and its stakeholders are creating hurdles in the timely implementation of such laws, which is in line with the internationally accepted standards and in the best interest of financial sector and general public as well.
According to a brief on status of Anti-Money Landing Ordinance 2007, International Organisations like Financial Action Task Force (FATF) and Asia Pacific Group (APG), which are responsible for monitoring compliance of AML/CFT regime by member countries, expressed serious reservations on certain deficiencies in Pakistans anti money laundering law, and wanted improvement in it.
The proposed amendments in the AML were placed before the Cabinet after approval by National Executive Committee (NEC), established under AMLO, 2007. The Cabinet in its meeting held on April 8, 2009 had approved submission of the Anti-Money Laundering (Amendment) Bill, 2009 to the Parliament.