Pakistan empowers custom courts to freeze assets in illegal fund transfer trials
ISLAMABAD – The Pakistani government has introduced a major legislative amendment through the Finance Bill, 2026, granting Special Judges the authority to freeze the assets of individuals undergoing trial for illegal fund transfers.
The amendment introduces a new sub-section (6) to Section 185A of the Customs Act, 1969, significantly expanding the judiciary’s enforcement capabilities to curb trade-based money laundering and capital flight.
Under the new law, a Special Judge presiding over a trial can order the immediate freezing of an accused person’s assets if there are “reasonable grounds” to believe the individual is involved in illicit financial flows into or out of Pakistan.
Key Statutory Addition: According to the text of the Finance Bill 2026, the newly added sub-section states:
“(6) Where a Special Judge during trial of an offence punishable under this Act, is satisfied that there is any reasonable grounds for believing that the accused has committed an illegal transfer of funds into or out of Pakistan, he may order the freezing of the assets of the accused, whether in his possession or in the possession of any other person on his behalf.”
Broad Scope of Asset Seizure
The amendment targets not only properties and financial holdings directly held by the accused but also extends to assets kept under benami arrangements or in the possession of third parties acting on the accused individual’s behalf.
Legal experts note that this provisional measure marks a shift in Pakistan’s anti-smuggling and customs prosecution strategy. Previously, asset confiscation typically required a final conviction. The new powers allow for preventative asset freezing mid-trial, preventing suspects from liquidating or transferring wealth before a final verdict is reached.
The measure is part of a broader fiscal and regulatory crackdown in the 2026 budget aimed at strengthening Pakistan’s anti-money laundering (AML) framework and choking off informal hawala and hundi channels.
