The Islamabad High Court (IHC) held that to attract an offence of money laundering, there has to be a nexus of the proceeds of crime with one of the predicate offences described under the schedule of the Anti-Money Laundering Act, 2010.

Chief Justice Athar Minallah on Saturday announced the judgment on the petition of Altaf Ahmed Gondal against the Intelligence and Investigation (Inland Revenue). He said in case the proceeds of crime are not relatable to the predicate offences described in the schedule, then offences under the Act of 2010 would not be attracted.

“It was a case of alleged concealment of assets and did not attract the offence of money laundering under the Act of 2010,” added the judgment.

Advocate Adnan Haider Randhawa on behalf of the petitioner has assailed the proceedings initiated by the respondents which subsequently led to the registration of FIR no 04/2021, dated 29.06.2021, under sections 3, 4, 8 and clause XIIA of the Schedule1 of the Anti-Money Laundering Act, 2010.

The impugned FIR was registered by the office of the Director-General, Intelligence and Investigation (Inland Revenue), which has been established under Section 230A of the Income Tax Ordinance, 2001.

The federal government, pursuant to powers conferred under clause (j) of section 2 of the Act of 2010 has notified the Director-General, (Intelligence and investigation, Inland Revenue) as one of the investigating and prosecuting agencies for the purposes. The Act of 2010 was promulgated in order to provide for the prevention of money laundering, combating the financing of terrorism and forfeiture of property derived from, or involved in, money laundering or financing of terrorism and for matters connected therewith or incidental thereto.

Section 2 has defined various expressions, while Section 3 has described the offence of money laundering. The offence of money laundering has been made punishable under section 4 of the Act of 2010.

The chief justice noted that the Supreme Court in the cases titled, “National Accountability Bureau (NAB) v M/s Hudaibya Paper Mills Limited” and “Justice Qazi Faez Isa v The President of Pakistan” has held that in order to attract the offence of money-laundering, there has to be a nexus of the proceeds of crime with one of the predicate offences described under the schedule of the Act of 2010.

The judgment said that the shows cause notices, dated 05.07.2021 and 24.12.2021 and the FIR, dated 29.06.2021 unambiguously show that the allegation against the petitioner was regarding non-declaration or concealment of assets.

The court noted that the respondents have failed to show any material whatsoever to, prima-facie, establish the existence of the ingredients of the offence of money laundering described under the Act of 2010.

The proceedings initiated by the respondents that had led to the registration of a criminal case relating to money laundering under the Act of 2010 were bereft of jurisdiction, illegal and void.

The FIR no 04/2021, dated 29.06.2021, and the proceedings relating thereto are declared as illegal, without lawful authority and jurisdiction. The proceedings are; therefore, set aside and the impugned FIR no 04/2021, dated 29.06.2021, stands quashed. However, the respondent Department would be at liberty to proceed under the Ordinance of 2001, if it is satisfied that a case of concealment of assets is made out.

The story was originally published in Business Recorder on April 17, 2022.