Pakistan’s minister for commerce has commented that he expects the opening of the country’s banks in neighbouring China will help curb under- and over-invoicing in the burgeoning volumes of trade between the two countries.
Khurram Dastgir Khan made the comment on the announcement that Pakistan’s Habib Bank Limited (HBL) will open its first branch in Uramqi, the largest city in China’s Xinjiang province.
First for Pakistan
The minister said that HBL would become the first Pakistani bank to open a branch in China, and he anticipated it opening before the end of this year.
The branch opening is substantially connected to the ambitious US$46 billion China-Pakistan Economic Corridor (CPEC) projects and HBL’s presence is aimed at facilitating business links and improving access to trade finance for firms on both sides of the border.
Up until now, it has been difficult for Pakistan’s banks to establish a presence in China which usually demands financial institutions operating in the country have assets of at least US$20 billion.
Under CPEC arrangements, China has provided a concession by reducing the minimum asset requirement for Pakistan’s banks to US$15 billion.
China and Pakistan are working closely on curbing misinvoicing on the countries’ border and the minister says that having HBL and subsequently other Pakistani banks in China will help in the establishment systems to compare invoices with the real value of goods shipped between the two countries.
Last month, China and Pakistan said they are set to launch an electronic data interchange in their efforts to clampdown on trade-based money laundering (Trade Based Financial Crime, 23 May 2016).
Categories: Trade Based Financial crimes News