Money laundering law can’t apply on pre-2016 offenses

In its detailed judgment in Justice Qazi Faez Isa case, the Supreme Court has declared that the country’s anti-money laundering law could not apply on offences committed prior to 2016.

"Four sections of the ordinance were only inserted in the Schedule to the AMLA [Anti Money Laundering Act 2010] as predicate offences on 20.05.2016 whereas the London properties were purchased by the petitioner’s [Justice Qazi Faez Isa] family in 2011 and 2013.

“Consequently, it is an established fact that before 2016, violations of the ordinance could not form the basis of a money laundering allegation. This proposition is backed by Article 12 of the Constitution," said the detailed judgment authored by Justice Umar Ata Bandial and endorsed by six more judges.

The detailed verdict was unveiled on Friday four months after a 10-judge larger bench quashed a presidential reference that sought Justice Isa’s removal in view of his failure to mention his family members’ London properties in his wealth statement.

The detailed verdict declared that the presidential reference was “tainted with mala fide in law” and also made strong comments against the president, the federal minister for law and the former attorney general for Pakistan (AGP).

The judgment referred to Article 12 which protects against retrospective punishment.

The article says that no law shall authorize the punishment of a person “for an act or omission that was not punishable by law at the time of the act or omission;” The court said the Constitution itself grants protection to individuals from retrospective punishment.

Therefore, it said, reliance by the counsel for the federal government on an amendment made in 2016 to seek removal of Justice Isa for acts committed in 2011 and 2013 appears to be improper.

The court referring to Sections 2 and 3 of the AMLA noted that a necessary element of the offence of money laundering is the commission of a "predicate offence".

"The execution of this offence gives birth to the proceeds of crime, the movement of which attracts the criminal conduct of money laundering. Therefore, without the commission of a predicate offence there can be no offence of money laundering.

“However, not every statutory violation is a predicate offence; the AMLA recognizes this by setting out in its schedule a list of statutory offences that constitute a predicate offence for the purposes of money laundering."

In the present case, the court noted, the main allegation against Justice Isa is that he has failed to declare the London properties owned by his wife and children in his wealth statements.

"The contents of a wealth statement are provided in Section 116(1) of the ordinance. For the moment, ignoring our view that the said provision is vague about a taxpayer’s obligation to disclose the assets of a financially independent spouse, it is clear that in order to attract the offence of money laundering the non-declaration of assets under Section 116 ibid must constitute a predicate offence.”

It said only then may the allegation of money laundering be made against Justice Isa.

In this regard, the judgment noted, the offences incorporated from the ordinance to the Schedule to AMLA have to be examined.

"A perusal of the Schedule reveals that the non-declaration of assets by a taxpayer under the ordinance is not a predicate offence under the AMLA. Therefore, prima facie no case of money laundering can be made out against the petitioner on this count."

The judgment noted that the reference has not alleged the commission of any specific predicate offence under the AMLA by any person.

“Nevertheless, assuming for the sake of argument that the petitioner is under an obligation to list the assets of his wife in his wealth statement, the only predicate offence that appears remotely relevant to the case against him is under Section 192 of the ordinance, which says about prosecution for false statement in verification – where tax sought to be evaded is ten million rupees or more.”

Nonetheless, the judgment noted that even though Section 3 of the AMLA specifies that the commission of the offence of money laundering is not dependent upon the conviction of the petitioner for a predicate offence, it at least requires that a specific predicate offence be alleged.

However, the court said, no predicate offence has been alleged against Justice Isa in the reference.

"Nor has any evidence been placed on record which may prima facie support the allegation of money laundering. In the above factual scenario, an allegation of money laundering against the petitioner is entirely fictional at this stage. The said allegation is therefore without merit," said the judgment.

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