An Islamabad-based Pakistani political scientist, economist and financial analyst has written an article critical of Pakistan’s approach to trade-based money laundering (TBML).

Dr Farrukh Saleem cites external data suggesting TBML costs Pakistan US$10 billion a year while the country has recently had to raise much less than that – but still billions of US dollars – from the International Monetary Fund (IMF). “We need to shut off the money laundering pipeline,” he says.

In March 2017, the US state department said TBML costs Pakistan more than US$10 billion a year but in 2013 the country agreed an IMF loan of US$6.6 billion disbursed over 36 months and in 2008 Pakistan accepted an IMF package worth $7.6 billion.

Saleem’s point is that the IMF support of US$14.2 billion in the last decade may not have been needed if the $100 billion of TBML losses over the same period had been stemmed.

Weak enforcement

In Pakistan, the Federal Investigation Agency is responsible for investigating money-laundering cases according to Saleem, who suggests that the agency has a conviction rate of under seven per cent. Only one of 256 filed key cases of money laundering was decided by the courts in the last three years he adds.

Saleem says that the modus operandi of Pakistan’s money-launderers is reasonably clear, with funds funnelled through Dubai from fake bank accounts in Pakistan before bing disbursed to various countries, including the UK, US, Switzerland and Spain.

Dr Farrukh Saleem’s full article simply entitled $10 billion a year can be found here.

Categories: Trade Based Financial crimes News