Pakistan PM confronts informal money transfers, money laundering, corruption
Pakistan’s new prime minister Imran Khan wants his nation to embrace higher standards for AML Compliance and the prevention of money laundering. Working to stem the outflow of Pakistan’s wealth and boost currency reserves, Khan has identified money laundering as an area in need of much attention.
Khan has backed new legislation to more effectively punish money launderers and others committing financial crimes. The new legislation, expected to go into effect soon, boosts current law related to practices like hawala/hundi, which are non-institutional remittance instruments to transfer money or to borrow money or make exchanges. Because the transactions occur outside of formal financial institutions, no accessible trail of transactions exists for authorities seeking to prevent or investigate financial crime.
Critics of hundi/hawala note that in addition to the movement of money being virtually invisible, “hundi funds result in less productive investments, encourage tax evasion and negatively affect governance and exchange reserves.” On the positive side, these types of informal money-transfer networks have long and successful histories of serving people who cannot easily access formal banking services.
Khan and the Pakistani government have authorized the State Bank of Pakistan, which is also the nation’s financial regulatory authority, to take assertive action against false bank accounts and to identify and remedy obstacles that prevent more and better enforcement of AML Compliance and similar measures to fight financial crime.
Amid Khan’s efforts to stop financial crime and shore up the country’s treasury, the holders of illegal stolen wealth in Pakistan have hustled to move their money out of the country through various money-laundering schemes.
In October, the Hindustan Times reported on “the penniless billionaire,” a rickshaw driver living in poverty. Investigators informed the man that his unused bank account had been used by money launderers to move $22.5 million. Authorities believe that this hijacking of rarely used accounts owned by low-income Pakistanis has resulted in the money laundering of hundreds of millions of dollars—most all of which flows out of the country.
Khan, who built his successful campaign for prime minister on an anti-corruption platform, has focused on stopping that illegal outflow of state funds and recovering stolen and laundered money. Shortly after being elected, he met with British officials to lobby for the pursuit and return of vast fortunes allegedly stolen by corrupt Pakistani government officials over years and years and transferred to the U.K.
Former prime minister Nawaz Sharif and his family were prominent names in the Panama Papers, and Pakistani courts sentenced Sharif to prison for his role in stealing state funds. Britain has pledged to improve its AML Compliance efforts and slow the influx of kleptocrat wealth through measures like requiring the full disclosure of sources of wealth when purchasing luxury property or goods.
RegTech Platform and Global AML Software Ecosystem boost AML Compliance and every eGRC effort
With AML Partners’ platform technology for RegTech, AML and eGRC software solutions are easier, faster, and so much more efficient. Contact us today to learn how platform technology and our end-to-end AML Ecosystem SURETY Eco and the SURETY modules –powered by the RegTech One platform–can transform the efficiency and effectiveness of your unique AML Compliance efforts. SURETY Eco includes fully integrated modules for CDD/KYC on-boarding, behavior/transaction monitoring, and sanctions screening. And AML Partners simplifies your end-to-end fully integrated AML Compliance efforts even further with an optional Subpoena Search module for FinCEN 314a and similar subpoena searches. Contact us today to learn more or schedule a demo of SURETY Eco, the AML Ecosystem powered by the RegTech One platform. With extraordinary configurability and built for API extensibility, the RegTech One platform powers not only an end-to-end AML ecosystem but also CECL workflows, vendor management, cyber risk workflows, FCPA workflows, and so much more.