Sunday, April 24, 2016

Panama Leaks: Did Musharraf Steal Pakistani People's Money?

A story alleging corruption by former President Pervez Musharraf has appeared recently in Pakistan's Jang Media Group publications  in the aftermath of the Panama Leaks that revealed the names of 220 rich and powerful Pakistanis owning offshore accounts.

Politicians Dominate Off-shore Company Owners in Panama Leaks 
The Panama Papers show that Mir Shakeel ur Rehman, the owner of Jang Media Group, owns offshore accounts, as do the family of the current Prime Minister Mr. Nawaz Sharif and former Pakistani Prime Minister Benazir Bhutto who was assassinated in 2007. Other Pakistanis named in the Panama Papers include prominent businessmen, politicians, judges, bureaucrats, etc. allegedly involved in corruption. The names of former President Pervez Musharraf or his family members are not among the 220 names from Pakistan.

The Jang Media Group story titled "How Mr clean Musharraf became a billionaire" lists accounts held by Mr. Musharraf in Dubai and London with balances adding up to millions of US dollars. Farrukh Durrani, the story writer, demands that the commission of inquiry looking into Panama Papers also investigate the sources of Mr. Musharraf's wealth. Here's an excerpt of the story:

"Despite having such huge chunk of amount in his offshore accounts, neither did any investigative agency nor did the accountability bureau question him how he got billions of rupees in his foreign accounts. However the commission of inquiry appointed by prime minister in the wake of Panama Leaks has a broader scope and powers which can question ex-dictator Pervez Musharraf from where he got billions of rupees which are kept in his offshore accounts."

Knowing what I know about how western leaders like former US President Clinton and his wife Hillary became wealthy after leaving office, let me suggest to Mr. Durrani to do his homework as follows:

1. Learn about the lucrative speaker series business which brings hundreds of thousands of dollars per speech to celebrity speakers in the West, particularly the United States. This is a well-established, well-organized business that promotes lecture series featuring prominent speakers where attendees pay hundreds of dollars per person to attend in large numbers.

2. Do research into how many such lectures President Musharraf delivered after retiring from presidency in 2008? How much did he get paid for each? What does it all add up to? Does it add up to more than the reported account balances in Dubai and London?

Let me give a few pointers to Mr. Durrani if he's honestly trying to understand the sources of Mr. Musharraf's wealth:

1. A Newsweek story quoted David Wheeler, President of Embark LLC,  just one of the international public-relations firms trying to land Musharraf as a highly paid keynote speaker, as saying, "The [speaking] fee for Musharraf would be in the $150,000-200,000 range for a day."

2. The Newsweek story further added that "Public-relations executives say the articulate and brash 44-year army veteran's earning power could approach that of former U.S. President Bill Clinton".

3. Here's how an Oregon newspaper "The Oregonian" reported about Musharraf's planned appearance in Portland in 2010:  "The folks who attract big international names to Portland each year have done it again, landing Pervez Musharraf, Pakistan's former president, to speak here in March. The World Affairs Council of Oregon's 2010 speaker series will also feature Nobel Prize-winning economist Joseph Stiglitz; Jane Lubchenco, National Oceanographic and Atmospheric Administration chief administrator; and -- in a face-off --Howard Dean, former chairman of the Democratic National Committee, and Karl Rove, strategist for President George W. Bush."

4. A brochure announcing the Peninsula Speaker Series in the San Francisco Bay Area that included Musharraf as a featured speaker, along with Condeleeza Rice, Laura Tyson and Paul Krugman, showed the ticket prices ranging from $294 to $403 per person.

After Mr. Durrani has had a chance to do his homework, I believe he will realize, if he's honest, that he is being used by his employer to deflect attention of the world and of any investigative commission members from the sins of Mir Shakeel ur Rahman and his rich and powerful friends in high places, including Prime Minister Nawaz Sharif and his family, who have either stolen Pakistan peoples' money and/or cheated on taxes they owe to the Pakistani treasury. Any investigative commission must not allow itself to be used to pursue vendettas to obscure the truth.

Related Links:

Haq's Musings

Pakistani Leaders in London After Panama Leaks

Culture of Corruption in Pakistan

Zardari Corruption Probe

President Pervez Musharraf's Legacy

We Hang Petty Thieves and Appoint Great Ones to High Offices

Capitalism's Achilles Heel by Raymond Baker


Rumi Rumi said...

Is any of these filthy politicians who are accusing Gen Musharraf for corruption willing to swear on their children's life(as Gen Musharraf did) that they did not steal anything from the people of Pakistan?

Anonymous said...

Musharraf is not a corrupt person, Sheikh Rasheed told two incidents of Musharraf

Riaz Haq said...

Musharraf's wealth explained by Hamza Malik

65 crores. That's the value of assets declared by Pervez Musharraf in his nomination papers submitted to the election commission of Pakistan. He also has not paid any tax in the last 3 years to the government of Pakistan. Several questions have been raised about the source of Musharraf's funds (which he did not mention) and why he did not pay any taxes.

Let's discuss those questions.

How did Musharraf end up making so much money when he was in fact a government subordinate and retired with not much (relatively) money? The answer to that would be that since his self imposed exile, Musharraf has gone on various international lecture series and tours. The average compensation for one lecture is $100,000 (that's almost 1 crore rupees, give or take). Now in the past 4 years if Musharraf has even done 25 lectures, that means he's earned 25 crores. Assuming he is an educated man and is not overly stupid, he must have (and he did indeed) made a lot of investments which have returned handsome profits to him. So where he got his money should be clear for all to see.

Now the second question, why didn't he pay any taxes? Well according to the Pakistan tax rules, residents of Pakistan earning income abroad are not liable to pay taxes on that income within Pakistan. The Pakistani tax rules assume that because Pakistanis send valuable foreign exchange to Pakistan, it is more than enough to not double charge them (unlike the United States of America, where foreign income is tax deductible). Hence, Musharraf did not pay any income taxes for the last three years he was not in Pakistan. The pension he gets already is tax deducted (income tax is deducted at source) and while we do not know why he did not pay any property taxes (maybe the properties are not in his name? Maybe he did pay the taxes through a proxy that don't appear in his name? Maybe he is indeed, a tax defaulter?) we can be reasonably sure that the money he did make is indeed legitimate.

And finally there's the biggest question of them all, one that doesn't even concern Musharraf. What about the other so called "sadiq" and "ameen" (pious and pure) politicians of Pakistan? The one's who are known to be inherently corrupt? For example Nawaz Sharif says he owns only 1.5 crore rupees in assets (maybe he forgot the 600 crore Raiwind estate he lives in is not his own?) while Zardari says he only owns 1.8 crore rupees (of course he also forgot he owns palaces in France, Dubai and God knows where else). And then there's the cherry on top of the cake, Hamza Shahbaz Sharif who says that he doesn't even own a Suzuki Mehran.

Let's take a moment to reflect on this. These gentlemen who claim that they have next to nothing travel in cars that cost around 6 - 7 crore each. They live in palaces that cost hundreds of crores. And they live a lifestyle that is simply not possible on the meager "incomes" that they declare. So my question is this, do you finger pointers not think before you open your mouths to make allegations?

Syed Qasim Abbas said...

@Riaz it's a non issue,Musharaf will be alright

Majumdar said...

Mian Nawaz Sharif has been baizzat buried in the Banama Babers episode. Prof Riazul Haq sb jawaab do!!! Jawaab do!!! Jawaab do!!!


Riaz Haq said...

Majumdar: " "

Please watch this:

Please also read the following:

At age 13, (Husain Nawaz son of Nawaz Sharif) created 4 offshore companies worth 30 million dollars and acquired 4 flats in Mayfair, London. The seed fund for these companies came from the ‘Tooth Fairy’ who was buying his teeth at meagre million dollars a pop. I am safely assuming this as his whole family paid an average tax of 70 dollars per year in the 3 decades before (and one decade after) he founded these companies. His family was more poor than 90% of Pakistani tax payers.

At age 17, he was already a self made billionaire. But then, all their assets were frozen by a military dictator. He went to KSA. Took a loan, built a steel factory, and in just four years, he earned so much money that he completely repaid the loan and bought many businesses all over the world. At age 21, he was a multi billionaire. His father, the Prime MInister of Pakistan, is lucky to have a son like him. The PM does not own anything. He is under debt of millions of dollars that he has to repay to his sons while Hussain is however a multi billionaire. It is just a co incidence that his father is a politician.

I am thinking what did Nawaz Sharif do with all this money. How the hell is he under so much debt. Maybe while his sons were working so hard, he was busy gambling and partying in Montecarlo? Destroying the hard earned fortune?

PS: At age 13, I did not know how to fill a bank form and I did not know what an offshore company was? But then I am not as bright as Hussain. However I am richer than his father so surely I am brighter than his father.

Jon Lacanfora said...

There is much more the world knows about Pakistan than Musharraf.
Many of the country’s largest corporations are also controlled by the military, thanks largely to an opaque network of powerful ‘foundations’ originally set up to look after the pension needs of army personnel. The largest three — the Fauji, Shaheen and Bahria foundations, controlled by the army, air force and navy respectively — control more than 100 separate commercial entities involved in everything from cement to cereal production. Only nine have ever published partial financial accounts, and all are ultimately controlled by the Ministry of Defence, which oversees all of the military’s commercial ventures.

The Fauji foundation, the largest of the lot, is estimated by Siddiqa to be worth several billion pounds. It operates a security force (allowing serving army personnel to double in their spare time as private security agents), an oil terminal and a phosphate joint venture with the Moroccan government. Elsewhere, the Army Welfare Trust — a foundation set up in 1971 to identify potentially profitable ventures for the military — runs one of the country’s largest lenders, Askari Commercial Bank, along with an airline, a travel agency and even a stud farm. Then there is the National Logistic Cell, Pakistan’s largest shipper and freight transporter (and the country’s largest corporation), which builds roads, constructs bridges and stores vast quantities of the country’s wheat reserves.

In short, the military’s presence is all-pervasive. Bread is supplied by military-owned bakeries, fronted by civilians. Army-controlled banks take deposits and disburse loans. Up to one third of all heavy manufacturing and 7 per cent of private assets are reckoned to be in army hands. As for prime real estate, a major-general can expect to receive on retirement a present of 240 acres of prime farmland, worth on average £550,000, as well an urban real estate plot valued at £700,000.

Unsurprisingly, the military is loath to release details of its commercial operations. The average Pakistani citizen earns just £1,500 a year, making his country poorer than all but 50 of the world’s nations. Most of the military’s junior officers and other ranks live in squalid tents pitched by the side of main roads, even in the capital Islamabad. Revealing to them that the top brass in their air-conditioned, top-of-the-range Mercedes are worth £35 million each (a few are believed to be dollar billionaires including, it is quietly suggested, Musharraf) would probably create widespread unrest.

Riaz Haq said...

JL: "a few are believed to be dollar billionaires including, it is quietly suggested, Musharraf"

Even the most ardent critics of Musharraf do not allege this.

As to Pakistani military's participation in the nation's economy, it's not necessarily a bad thing.

Example: Chinese PLA is credited with China's fastest industrialization of any nation in recorded history.

China's PLA began its manufacturing role for the defense sector that picked up steam after the Sino-Soviet tensions during Mao's time. Manufacturing purely military products, such as arms, ammunition, as well as electronics, plastics and metals for military applications, these so-called "third-line" factories were built in remote mountain regions, far away from transportation routes and power sources. The factories bought supplies at subsidized costs from other factories, manufactured the weaponry and related products -- generally low-tech and low-quality -- and then sold them to the military at subsidized prices.

With the change of leadership after Mao's death in 1976, the new government encouraged the military plants to begin exploring civilian uses for their products and to engage in the broader liberalization of the economy. The most nimble managers were free to exploit new markets for their goods. During the early 1980s, the PLA's share of the national budget declined, spurring it to look to other sources for cash, especially hard currency. The higher organizational levels of the PLA created trading companies like China Xinxing, China Poly and China Songhai to take advantage of the opening of China's economy to the international market, according to British analyst Gary Busch.

They formed banks, holding companies and international trading companies like Everbright to market these goods worldwide. Now the PLA runs farms, factories, mines, hotels, paging and telephone companies and airlines, as well as major trading companies.

Busch says the number of military-run businesses exploded during the boom of the late 1980s. The "third line" factories opened branches in the coastal areas, earning increasingly higher profits from the manufacture and export of civilian goods. Even the lowest levels of the PLA set up production units. In fact the PLA had a largely captive audience of Chinese who had never really had the chance to acquire personal goods produced in China before. In addition to their international arms sales, their production of consumer goods for the domestic market soared.

Since the 1980s, many of the PLA companies have now become part of the global economy. According research done by David Welker for Multinational Monitor, in pursuit of hard currency, many of the companies have listed themselves on capital markets in Hong Kong and elsewhere, opened representative offices in overseas markets, solicited foreign companies for joint ventures and partnerships in China and emphasized exports. The so-called red chips, companies listed on the Hong Kong exchange but which are in fact mainland Chinese firms, are the hottest stocks on the market. Hong Kong is the PLA's favored stock exchange because of its loose disclosure guidelines. China Poly Group has two listed companies: Continental Mariner Company Ltd. and Poly Investments Holdings Ltd. Both Continental Mariner and Poly Investments have a large number of subsidiary companies in mainland China, Hong Kong and tax havens like Liberia, the British Virgin Islands and Panama. China Carrie's listed company in Hong Kong is Hongkong Macau Holdings Ltd. China Carrie also owns HMH China Investments Ltd. on the Toronto Stock Exchange and HMH Gold Mining on the Australian Stock Exchange. 999 Enterprise Group, another company controlled by the PLA General Logistics Department, operates Sanjiu Pharmaceuticals Group, the largest pharmaceuticals manufacturer in China. 999 recently listed on the Hong Kong exchange.

Riaz Haq said...

The confessional statement of Senator Ishaq Dar was recorded before a district magistrate in Lahore. He was brought to the court from a jail by Basharat Shahzad, who was then serving as assistant director in the Federal Investigation Agency (FIA).

According to legal experts, the senator's deposition was an 'irrevocable statement' as had been recorded under section 164 of the Criminal Procedure Code (CrPC).

Senator Ishaq Dar has always been regarded as one of the closest aides of the Sharif family, and is now also a relative as his son is married to Nawaz Sharif's younger daughter.

However, the NAB record clearly shows that back in 2000 he had agreed to give a written statement against the Sharifs about their alleged involvement in money laundering.

The top PML-N leaders had hit a rough patch by then as some of their lieutenants were busy developing a new political system for Gen Pervez Musharraf after his Oct 1999 military coup.

In the statement, Ishaq Dar accused Nawaz and Shahbaz Sharif of money laundering in the Hudaibiya Paper Mills case. At one point in the 43-page statement, Mr Dar said that on the instructions of Mian Nawaz Sharif and Shahbaz Sharif, “I opened two foreign currency accounts in the name of Sikandara Masood Qazi and Talat Masood Qazi with the foreign currency funds provided by the Sharif family in the Bank of America by signing as Sikandara Masood Qazi and Talat Masood Qazi”.

He said that all instructions to the bank in the name of these two persons were signed by him under the orders of “original depositors”, namely Mian Nawaz Sharif and Mian Shahbaz Sharif.

“The foreign currency accounts of Nuzhat Gohar and Kashif Masood Qazi were opened in Bank of America by Naeem Mehmood under my instructions (based on instructions of Sharifs) by signing the same as Nuzhat Gohar and Kashif Masood Qazi.”

The document shows Dar stated that besides these foreign currency accounts, a previously opened foreign currency account of Saeed Ahmed, a former director of First Hajvari Modaraba Co and close friend of Dar, and of Mussa Ghani, the nephew of Dar's wife, were also used to deposit huge foreign currency funds provided by “the Sharif family” to offer them as collateral to obtain different direct and indirect credit lines.

Senator Dar had disclosed that the Bank of America, Citibank, Atlas Investment Bank, Al Barka Bank and Al Towfeeq Investment Bank were used under the instructions of the Sharif family.

Interestingly enough, Ishaq Dar also implicated himself by confessing in court that he — along with his friends Kamal Qureshi and Naeem Mehmood — had opened fake foreign currency accounts in different international banks.

Mr Dar said an amount of $3.725 million in Emirates Bank, $ 8.539 million in Al Faysal Bank and $2.622 million were later transferred in the accounts of the accounts Hudaibya Paper Mills.

He said that the entire amount in these banks finally landed in the accounts of the paper mills.

The Hudaibiya Paper Mills case is still pending in the National Accountability Bureau.

If it is opened again, the Sharif brothers may be in for a rude shock a confidant is to blame for the albatross around their necks.

NBRX said...

Pakistan has a very high level of corruption and that is not a secret. Most big businesses pay very little taxes and park their money. I don't understand why there is this big deal about Panama because it is so easy to do it in GCC like Dubai. Jon Lacanfora is probably right, many generals park their money abroad too.

Riaz Haq said...

After getting green signal from US government NAB investigation team would leave for United States to inquire money laundering case against Prime Minister Mian Muhammad Nawaz Sharif.
According to sources National Accountability Bureau is extending circle of investigation on the conceding affidavit submitted by Finance Minister Ishaq Dar regarding money laundering, and contacted Sikandar Masood Qazi, Talat Masood Qazi, Nuzhat Gohar and Kashif Masood Qazi , who are presently residing in America.
Sources said that Ishaq Dar had submitted confessional affidavit on April 25 ,2000 regarding money laundering before the magistrate that Sharif brothers had changed black money into white money through money laundering, which was the funds of Hudaibiya Papers Mills .
According to Finance Minister�s conceding affidavit two foreign currency accounts on the directives of Nawaz Sharif had been opened with the names of Masood Qazi and Talat Masood Qazi and Sharif family�s money had been transferred to USA through these accounts. Sources revealed that the wealth of Sharif family had also been transferred in the accounts of Nuzhat Gohar and Kashif Masood Qazi. Ishaq Dar told the court that a total amount of 14.886 million USD were credited in the accounts of Hudaibiya Paper Mills by Bank of Emirates and Bank of Al-Faisal in due course of time. Sources said that Qazi family would be interrogated about money laundering and new development is likely to be occurred in this regard and in the light of their statement NAB would frame the charge against PM, Finance Minister and some members of the Sharif family, Sources added.
It is worth mentioning here that Hussain Nawaz son of the PM Nawaz Sharif had accepted that he has well furnished houses worth billion of dollars in London

Riaz Haq said...

LAHORE The family of former Pakistani prime minister Nawaz Sharif paid £8.3 million to the Al Tawfeek Company for Investment Funds Limited as an out-of-court settlement against a case involving the family’s default on a loan, reports revealed here on Saturday.

The Sharif family obtained the loan in the name of Hudaibia Paper Mills, whose board of directors included Sharif’s brother and current Punjab Chief Minister Shahbaz, brother Abbas and their father late Mian Muhammad, Daily Times newspaper reported.

The Sharifs had defaulted on the loan, forcing Al Tawfeek to move a British court that gave its verdict on March 16, 1999, ordering Hudaibia Paper Mills and its directors to repay the loan.

The high court’s Queen’s Bench Division ordered Shahbaz to pay $417.7 million to Al Tawfeek, while Mian and Abbas were ordered to pay $414.7 million.

The amount was due by November 5, 1999, but when the Sharifs failed to pay up, Judge Master Trench issued a one-page order, demanding a list of proper ties owned by the Sharifs be provided to the authorities.

The Sharifs’ properties in London that had to be declared were 16, 16A, 17 and 17A Avenfield House, at 117-128 Park Lane, London. The court declared that the plaintiff company had the permission to serve the order on the Sharifs in Pakistan.

However, it was then that the Sharifs struck an out-of-court deal with the petitioner company to save their properties from being put up for auction. The Sharifs signed a ‘consent order’ on Jan. 25, 2000 and the matter was settled within 16 months.

Riaz Haq said...

#Pakistan #corruption: Ban boosts appeal of film #Maalik. #PanamaLeaks #Sindh #PPP @AJENews

Pakistan's government has banned a film about endemic corruption in its judiciary, law enforcement and political class, claiming it could promote violence.

The decision to censor Maalik has led to increased demand for the film in the black market, with many Pakistanis curious to know why it provoked the ire of politicians.

Pakistan is considered one of the most corrupt countries in the world, placing 117th out of 175 countries, according to the 2015 Corruption Perceptions Index put together by Transparency International.

Many Pakistanis told Al Jazeera they looked forward to watching Maalik and suggested the government's made its decision because the film's themes struck too close to home.

"Movies are for entertainment purposes ... they deliver a message to the public," Kashmala Qureshi, a student, said.

"If it is made on the basis of corruption and the government feels threatened by the movie, it means that they are guilty from inside."

One of Maalik's actors, Arif Khan, said the filmmakers had set out to expose the underbelly of corruption that exists within the country.

He said banning the film would only increase its appeal.

Ashir Azeem, who directed Maalik, told Al Jazeera that politicians were concerned with their image internationally and trying to censor anything that cast them in bad light.

"Authorities in Pakistan are very concerned with how they are perceived, especially abroad," Azeem said.

"Whereas this might be considered an overreaction in some countries, it has become the go-to method for the authorities to ban content they deem offensive or controversial."

The controversy surrounding the film comes just weeks after leaked documents revealed that Nawaz Sharif, Pakistan's prime minister, stashed huge sums of money in offshore accounts.

Riaz Haq said...

#Jang Editor Shaheen Sehbai quits in protest over false reporting exonerating #NawazSharif in #PanamaLeaks scandal

Senior journalist Shaheen Sehbai has revealed that he was not shown the report in which the newspaper purported that the International Council for Investigative Journalists (ICIJ) mistakenly included Prime Minister Nawaz Sharif’s name in the Panama Papers, before it was filed.

Speaking to a panel comprising Express News anchors Imran Khan and Gharida Farooqi, and Daily Express Group Editor Ayaz Khan after resigning as the group editor of The News on Saturday, Sehbai said his reports at The News were radically changed without his permission.

According to Sehbai, the CEO and group editor-in-chief of the Jang Group, Mir Shakeelur Rehman, was waging a battle for ‘civilian ascendancy’. He said Jang Group’s ‘Aman Ki Asha’ initiative was considered a bad move among military circles, but “we insisted
that all this was done with full knowledge of the military leadership”.

“We were ashamed of certain decisions taken by my organisation and I now realise that the Jang Group promoted its own perception and angled all news according to its own need,” Sehbai said. He added that the Jang Group was facing a lot of issues for a very long time.

Sehbai said the most recent difference between him and the Jang Group cropped up when the latter ran a story claiming that ICIJ had included Premier Nawaz’s name in the Panama Papers by mistake. “My objection on this issue was that I was neither consulted nor shown the report before publishing it,” the veteran journalist said.

“I was not told about this report at all. Such moves usually took place after midnight and usually orders from the top were accompanied by ‘suggestions’ about which news was to be accommodated where in the newspaper,” he added.

The news report in question, according to Sehbai, was just a ‘one-liner’ correction which was followed by a letter from Daniyal Aziz and was arranged in the shape of a news report.

Things were micromanaged at his previous organisation, he said, adding that orders from the top usually not only included ‘hints’ at placement of even single-column news items, but also which report was to be radically edited too.

“When editors reviewed the newspaper in the morning, they realised just how much of their news reports made it in the paper and how much they were edited out.”

Sehbai said that while Mir Shakeel claimed he was waging a battle for civilian ascendancy, “I was ashamed of the way my previous employer came out in defence of the current government.”

“Owners of the Jang Group have a clear-cut view on what sort of news reports and editorials are to appear in their newspaper. They view everything in accordance with their own perspective and print newspaper in line with their own view point every day. Everything is determined by the group’s owners,” he said.

“Over the past two years, I had been facing a number of issues with the group owners. When the incident involving Hamid Mir occurred, I was with Mir Shakeelur Rehman in Dubai and I advised him not to adopt such an aggressive posture, but he said that a clash between the military and civilians is bound to happen and that I should not interfere,” Sehbai said.

“And everyone witnessed whatever happened afterwards. My differences on policy matters began from that time, I kept telling him not to pursue the course of action he had chosen. The mind of Mir Shakeelur Rehman may contain a host of disparate agendas, but he had some views of his own too,” he added.

“When I joined Jang Group, talks were going on for the ‘Aman Ki Asha’ project and some people from the Times of India visited us. At that time, I explicitly told them that I would not join this effort,” the veteran journalist said.

According to Sehbai, the restriction on Geo transmission during the Musharraf regime and Hamid Mir’s attack haunted Mir Shakeelur Rehman’s mind.

Riaz Haq said...

#Pakistan Anti-Graft Body Seizes Currency, Gold Worth US$6.4 million From #Balochistan Official - ABC News … via @ABC

A spokesman for Pakistan's anti-graft body says its officers have seized currency and gold worth 680 million rupees, or $6.4 million, from the residence of top provincial financial official in southwestern Baluchistan province.

Abdus Shakoor says investigators from the National Accountability Bureau, or NAB, arrested provincial finance secretary Mushtaq Raisani in the provincial capital of Quetta on Friday.

He says the arrest on corruption charges was followed by a quick raid at Raisani's official residence, where investigators found bags stuffed with Pakistani and foreign currency, slabs of gold and financial bonds.

Raisani is accused of embezzling public funds during his three years as finance secretary.

The NAB has stepped up operations after the country's army chief sacked six officers, including two generals, on corruption charges in Baluchistan last month.

Riaz Haq said...

Over 400 more #Pakistanis (politicians, businessmen, media owners) named in #panamapapers #PanamaLeaks #Pakistan …

Imran’s financier, Benazir’s cousin, Zardari’s and Altaf’s close friend, Seth Abid’s son, retired admiral’s son, former MD of Port Qasim Authority and mother of Oscar Award winner Sharmeen Chinoy figure in the list; more names to appear after thorough investigations

ISLAMABAD: As the much-awaited list of Pakistanis owning offshore companies is released today, the close associates of politicians and families of celebrities are set to capture more attention than the businessmen including those who registered companies only to open accounts in Swiss banks.

Identities of some of the high-profile figures suspected to be linked with offshore companies are still being ascertained and will therefore be published after a complete investigation.

The list to be released by The News will be the most comprehensive as painstaking efforts were made to find the last Pakistani buried in the 11.5 million files of the Panama Papers shared by the International Consortium of Investigative Journalists (ICIJ). Nevertheless, it can’t be claimed with confidence that all of them have been fished out.

Right from the family of Zulfi Bokhari, a key financier of Imran Khan, to Irfan Puri, an oil czar equally close to the PPP/MQM leadership and presently in Dubai jail; from Tariq Islam, a cousin of Benazir Bhutto, to the son of former health minister Naseer Khan; from the family of famous Seth Abid to the son of Admiral (retd) Muzaffar Hassan; and from the Port Qasim Authority’s former MD and NRO beneficiary Abdul Sattar Dero to the former president of Karachi chamber of commerce, Shaukat Ahmed, are in the list.

Mother of Oscar award winner, Sharmeen Obaid-Chinoy; a billionaire owner of Sachal studio Izzat Majeed; wife of Ghous Akbar; and fashion designer Zehra Valliani along with her brother, an asset manager, Fawaz Valliani have also been identified as owners of offshore companies.

Wamiq Zuberi of the Business Recorder and his wife, former PPP senator Rukhsana Zuberi, have been identified among those invested in an offshore company, a fact Wamiq acknowledged. He explained that they stopped investing after being defrauded and that the company was owned by somebody else who was murdered in Islamabad.

Although Abdul Aleem Khan of the PTI has been claiming with confidence that he didn’t figure in the Panama Papers and The News story about his offshore company was based on his assets declarations, his name is very much in the record.

As far as Sayed Zulfikar Abbas Bokhari (Zulfi Bokhari) is concerned, he has been identified in connection with the offshore companies he own along with his two sisters. There are six companies owned by Zulfi family: K-Factor Limited, Bradbury Resources Ltd, Bayteck Limited, Bayla Trading Limited, Poreim Trading Limited and Ganstam Trading Limited. They could have gone unnoticed had one of his sisters not given address of Islamabad. Probe indicates the house is owned by Zulfi family. Address in London is of Zulfi’s house. Wajid Bokhari, Zulfi’s father, was caretaker minister in the interim setup installed for holding 2008 elections. One of his uncles is sitting PTI MPA from Attock.

Riaz Haq said...

Pakistani Names in Panama Leaks:

Abdul Kader Jaffer
Ali Naqi Taqi
Ambreen Haroon
Amin Mohammed Lakhani
Amynah Adil Jaffer
Bashir Dawood
Bashir Dawood,Mariyam Dawood&Farah Dawood
Farah Dawood
Fatima Taqi
Imran Riaz
Ismathunissa Mumtaz
KHAN Amir Saleem Anwar
KHAN Nasir Saleem Anwar
KHAN Tahir Saleem Anwar
Maha Abedi Dadabhoy
Mariyam Dawood
Maryam Adil Jaffer
Mohammad Azam Ali
Moonis Elahi
Mr. Adil N. Haji
Mr. Amer N. Haji
Mr. Nazim Fida Hussein Haji
Muhammad Haroon Mahmood
Muhammad Talha Mahmood
Omer Adil Jaffer
Rashda Tariq
Tanveer Sultan Awan
Tariq Salam
Tasneem Tanveer Awan

Riaz Haq said...

After 220 from #Pakistan earlier, 400 more #Pakistanis included in 2nd release of #PanamaPapers via @ePakistanToday

The Panama Papers scandal intensified around the world on Monday when a journalists’ group with access to the digital cache of documents said to put many of them online.

400 Pakistanis are named in the second set of Panama Papers, including close associates of politicians and families of celebrities along with businessmen including those who registered companies only to open accounts in Swiss banks.

Identities of some of the high-profile figures suspected to be linked with offshore companies are still being ascertained and will, therefore, be published after a complete investigation.

Pakistan Tehreek-e-Insaf’s (PTI) chairman Imran Khan’s close friend Zulfi Bukhari and Oscar winner Sharmeen Obaid Chinoy’s mother have been named among 400 Pakistanis in the second release of Panama Papers, local media reported Monday.

Former president of Karachi Chamber of Commerce and Industry Shaukat Ahmed, ex-managing director (MD) Port Qasim Authority Abdul Sattar Dero, family of Sheikh Abid Hussain who is casually known as Seth Abid, son of former federal health minister Naseer Khan and former Prime Minister (PM) late Benazir Bhutto’s cousin, ex-Admiral Muzaffar Hussain’s sons have also been named in Panama leaks.

Ex-MD Abdul Sattar owns two offshore companies while Seth Abid’s family has at least 30 illegal companies.

Known trader, Irfan Iqbal Puri who has good terms with former president Asif Ali Zardari and Muttahida Qaumi Movement (MQM) chief also owns three offshore companies.

The leaked documents belong to law firm, Mossack Fonseca that have been published by Panama Papers. The paper earlier published leaks in April that alleged around 140 leaders of the world of evading taxes and stashing wealth abroad while 200,000 offshore companies were revealed.

Read more: Opposition parties to hold meeting with parliamentary leaders to discuss ToRs today

Prime Minister Nawaz Sharif’s family was accused among other politicians. Iceland’s prime minister was forced to resign when his name was linked to an offshore company while Spanish minister also stepped down. British Prime Minister David Cameron ended up admitting he profited from an offshore firm started by his father.

PM Nawaz and his family faced criticism from opposition parties mainly PTI chief. Imran Khan demanded the Prime Minister to resign until a judicial commission led by Chief Justice of Pakistan (CJP) Anwar Zaheer Jamali inquires into the issue.

Riaz Haq said...

Journalist Kevin Hall talking with NPR Fresh Air host Dave Davies about his research on Panama Leaks:

Well, there are several forms of front companies. In the most basic sense, it's a company that is created to hide assets or to give the appearance of having a functional business. They're also - you can have a foundation, which is a version of that that's a little more secretive. The key to a lot of these companies is the ability to hide true ownership, that you have directors, who aren't the real owners of the company, named. I think that's really the big thing that distinguishes them.


Well, some of the legitimate reasons would run the gamut from real estate transfers - if you're purchasing property, say, in Panama - because it was easier to transfer that property to another. And then there are transfer taxes that you don't have to pay. So there's a financial gain in doing it this way, but it's also ease in property transfer. That would be one aspect. Another might be estate planning. Maybe you don't like the estate tax in the United States. And you keep certain assets overseas, and you try to find ways to pass on inheritance without going through the U.S. tax system. That would be another.


There is a gray area. And as we found in the documents, people go right up to the end as close as they can. And of course, U.S. tax law has been modified so much since the Reagan era that all of these loopholes have been written into it specifically to kind of get around some of these laws.


Well, I think the key thing is the money is still the important part. The law firm isn't necessarily involved in any way with the money. And that's what's been so frustrating because you're looking at what are called company formation documents. This company sets up a shell company in the Seychelles or British Anguilla, places like that. You don't actually, in most cases, see the money. You don't know where that money is. You presume the money is in Liechtenstein or Luxembourg or Switzerland. And with the U.S. crackdown on UBS and HSBC and the Swiss banks, it's driven I think more people into this offshore world if they're looking to camouflage that money they have back in Switzerland.


What's so interesting about this company Mossack Fonseca is the kind of menu of options they provide. They can just simply create a company for you. They can create what's called a private enterprise foundation. They can help you get a Panamanian visa if you either purchase property or invest in Panama. It gets as complex as going into derivatives trading. We've found some evidence that they actually help customers, place them into derivatives trading in real complex securities.

They have an asset management arm. They have a mail forwarding service. They also provide - if you want to have the appearance of being a legitimate brick-and-mortar company, they'll provide you a website, a phone number, an office suite, everything to make it look like you're a legitimate brick-and-mortar company.

Right, those are called shelf companies, as opposed to shell companies. And a shelf company is ready to roll. They're offered in the United States too. And sometimes, a legitimate use of one of these might be you're purchasing - one American company is buying another American company. And they need to do it quick. And they're going to incorporate in Nevada or Wyoming or, you know, pick your state. That would be a legitimate use. It's already ready to go. You don't have to wait seven days. You complete the transaction, and you're ready to roll.

Riaz Haq said...

#Pakistan laws facilitate money laundering, offshore transfers #PanamaLeaks

Contrary to the government claims of clamping down on money launderers and tax evaders, Pakistan’s laws facilitate money laundering and tax evasion in a legal manner, tying the hands of the authorities and preventing any tangible action against the culprits.

Over $9 billion are illegally remitted outside Pakistan, according to an October 2013 statement of the then governor of the State Bank of Pakistan (SBP), Yaseen Anwar. No estimates of the money transferred abroad through foreign currency accounts, opened and protected under the Protection of Economic Reforms Act 1992, are available.

Interestingly, Nawaz Sharif had enacted this law during his first stint as prime minister. After its enactment, industrialists and politicians whitened their illegal money, according to court records and statements of that period.

Sections 5 and 9 of the Protection of Economic Reforms Act, 1992 and Section 111(4) of the Income Tax Ordinance, 2001 guarantee complete immunity.

The Protection of Economic Reforms Act was passed in July 1992 for “creating a liberal environment for savings and investments and to create confidence in the establishment and continuity of liberal economic policies”. Before the passage of this act, the country had a controlled regime of foreign exchange. The government had de-regularised investment, banking, finance, exchange and payment system and holding and transfer of currencies.

“All citizens of Pakistan resident in Pakistan or outside Pakistan and all other persons shall be entitled and free to bring, hold, sell, transfer and takeout foreign exchange within or out of Pakistan in any form and shall not be required to make a foreign currency declaration at any stage nor shall anyone be questioned in regard to the same,” says Section 4 of the act.

PM Nawaz visits Gilani House to garner support on Panama leaks

Clause 5 grants complete immunity to foreign currency accounts holders against any inquiry from the Income Tax Department about the source of financing of foreign currency accounts. The balances in the foreign currency accounts also remain exempted from levy of wealth tax and income tax and compulsory deduction of Zakat at source. It also ensures complete secrecy. Even the central bank cannot impose restrictions on these accounts.

However, in December 1999, then president Muhammad Rafiq Tarar promulgated an ordinance to bring an amendment that withdrew immunity from inquiries to citizens of Pakistan residing in Pakistan in respect of any balance in new foreign currency accounts opened after December 16, 1999.

In 2001, then military dictator Pervez Musharraf promulgated the Foreign Currency Accounts Protection Ordinance, ensuring complete protection to foreign currency accounts holders. Tax officials argue that their hands are tied under the 1992 act and the 2001 Foreign Currency Account Ordinance.

Similarly, Section 111 (4) of the income tax law is facilitating whitening of illegal money through foreign remittances. According to rough estimates, one-fifth of about $19 billion foreign remittances are domestically generated black money that is being whitened under Section 111-4 of the Income Tax Ordinance.

Pakistan cannot prosper without eradicating corruption, says Imran

In the presence of these legal lacunas, no judicial commission can establish anything against any accused named in the Panama leaks, according to tax experts.

Riaz Haq said...

#Pakistan overtakes #India for money stashed in #Swiss bank accounts

This is the first time in the last three years that the funds linked to Pakistan in Swiss banks have exceeded that of Indians.
In case of China, the total funds declined from CHF 8.16 billion to CHF 7.4 billion. A number of other major countries also saw their funds falling in Swiss banks amid a global clampdown against the erstwhile banking secrecy walls in the Alpine nation.
The money of US clients in Swiss banks fell to CHF 195 billion in 2015, from CHF 244 billion a year ago, though the same for the UK clients surprisingly rose from CHF 321 billion to CHF 345 billion.
However, these official figures disclosed by SNB do not include the money that the foreign clients of Swiss banks might have kept in the name of shadow entities or shell companies.
Also, these figures do not indicate towards the quantum of alleged black money, which has been a matter of a major political debate in various countries including India and Pakistan.
As per the SNB data, the total funds linked to Pakistan in Swiss banks stood at a record high level of CHF 3.43 billion in the year 2001, but has come down considerably since then.
By 2013, it fell to as low as CHF 1.23 billion, the lowest since 1996 since when this data is available. However, it has risen by 6 per cent and 16 per cent during the last two years 2014 and 2015, respectively.
In case of India, the quantum of such funds has fallen in the last two years.

Riaz Haq said...

Money in #Swiss banks: With 1.5 billion Swiss Francs, up 16% YoY, #Pakistan overtakes #India - The Economic Times

This included funds amounting to CHF 1,477 million held directly by Pakistani nationals and entities and CHF 36 million through fiduciaries or wealth managers.

This is the second straight year of rise in Pakistan- linked funds in Swiss banks, while the same for India has fallen for the second consecutive year and stood at CHF 1,217 million (Rs 8,392 crore) at the end of 2015 - a decline of 33 per cent.

This is the first time in the last three years that the funds linked ..

As per the SNB data, the total funds linked to Pakistan in Swiss banks stood at a record high level of CHF 3.43 billion in the year 2001, but has come down considerably since then.

By 2013, it fell to as low as CHF 1.23 billion, the lowest since 1996 since when this data is available. However, it has risen by 6 per cent and 16 per cent during the last two years 2014 and 2015, respectively.

In case of India, the quantum of such funds has fallen in the last two years.

Read more at:

Riaz Haq said...

#NawazSharif returns to face bitter fight in #Pakistan. #PTI #ImranKhan #PPP #PMLN

Pakistan’s prime minister Nawaz Sharif, who underwent open heart surgery in the UK nearly five weeks ago, returned home on Saturday night, facing the prospect of a battle for his political life amid a clamour over the overseas wealth amassed by his children.

The premier landed in Lahore, his personal political stronghold, and was received by senior leaders of his ruling Pakistan Muslim League-Nawaz (PML-N) party, as he braced himself for the possibility of mass protests against his administration.

“I have now fully recovered and I am back to serve my country” he told a small group of reporters at Lahore’s Allama Iqbal International Airport, before he flew by helicopter to his palatial private residence just outside the city.

“Agitation will not provide the answer to our problems,” he added, in remarks apparently aimed at the opposition parties. “We have to find ways of solving our problems amicably.”

Mr Sharif is expected to meet his key political advisers on Sunday to discuss the prospect of protests again him led by the cricketer turned politician Imran Khan, and the Pakistan People’s party of former president Asif Ali Zardari.

“The coming weeks may be very important for the prime minister’s political future,” a senior government official in Lahore told the Financial Times.

Before his surgery, Mr Sharif was already coming under pressure to allow an independent investigation into how his three children had amassed considerable offshore wealth, which was revealed by the leaks of the Panama Papers.

According to the documents, Mr Sharif’s offspring own significant assets overseas, including luxury properties overlooking London’s Hyde Park. The prime minister had insisted that his family’s foreign assets were the profits from the sale of its steel business in Saudi Arabia, but few were convinced by his explanations.

During his recent medical absence from Pakistan, members of his party held talks with opposition about creating a high level commission to probe the family’s assets, and the source of the revenues, but they failed to agree on the terms. Since then, the clamour for an independent probe has mounted.

Zaffar Hilaly, a former diplomat and now a prominent commentator, said: “[He] left Pakistan with questions over his physical health. He has now returned with not only questions over his physical health but also his political health.”

The premier was facing a “more united opposition, and questions over Panama leaks from ordinary Pakistanis have refused to go away,” Mr Hilaly added. “In the three years since he [Mr Sharif] became the prime minister, this is his toughest challenge”.

Western diplomats say Pakistan’s normally squabbling opposition parties appear to have reached an unprecedented degree of unity against Mr Sharif, after talks on a commission to probe the family wealth failed.

“The main issue is just one. Opposition leaders want to see full evidence of where the Panama funds came from” one western diplomat said. “So far, Sharif has failed to come up with a convincing answer.”

Nafeesa Shah, a member of the lower house of parliament from Mr Zardari’s PPP, told the FT: “As long as the government continues to be stubborn, the opposition parties will be forced to agitate.”

Riaz Haq said...

Rich #Pakistanis Love #London, #NewYork, And #Dubai More Than #Karachi via @forbes #Pakistan

Pakistan’s rich love London, New York, and Dubai more than Karachi – when it comes to investing and partying with their money, that is.

That’s according to the former director of United Nations Development Programme (UNDP) for Pakistan, Marc-André Franche.

“You cannot have an elite that takes advantage of very cheap and uneducated labour when it comes to making money, and when it is time to party it is found in London, and when it’s time to buy things it is in Dubai, and when it’s time to buy property it invests in Dubai or Europe or New York. The elite needs to decide do they want a country or not,” Franche stated in an interview last month with the Business Recorder.

Franche’s comments come as Pakistan’s equity markets have been rallying, beating neighboring Indian and Chinese equity markets, as discussed in a previous piece here.

To be fair to Pakistan’s elite, investing in a country with such high corruption levels is almost an impossible task. Pakistan is ranked 117 in the Corruption Index, well behind neighboring India–see table.

Still, the attitude of Pakistan’s elite towards their own economy raises serious questions about the sustainability of the recent equity market rally, and the wisdom of foreign capital pouring into Pakistan, either in the form of investment or official assistance, when the money of rich Pakistanis heads in the other direction.

Investors who have been following frontier markets long enough have seen this show before – in Nigeria, Peru, and Colombia, as one commentator in a previous piece I did on Pakistan observes. I would add Argentina, which has been a frontier market several times in the past, to the list – as well as the Philippines, Mexico, and so on.

Riaz Haq said...

Justice Khosa "onus of proof of the money trail of London flats lies on shoulders of #Sharif family" #Panamagate The court on Friday cautioned Prime Minister Sharif and his family that if they were unable to establish the ownership of flats in London, the court would have to "imagine" that the petitioners claim was true. The top court made the remarks during the hearing of the case for the third consecutive day. In the Panama papers leak case hearing, the Pakistan Supreme Court on Friday asked Prime Minister Nawaz Sharif and his siblings to come out clean on the ownership details of the London flats which are not shown in their wealth statement.
Last year in April, the leak of 11 million documents held by the Panama-based law firm Mossack Fonseca revealed nexus between several corrupt politicians and businesses around the world. Among them was the Prime Minister Nawaz Sharif's family too.
The Panama leaks revealed that Sharif's children owned offshore companies and assets not mentioned in his family's wealth statement. The companies, according to the leaked papers, were used to launder illegal wealth and to acquire foreign assets, including some apartments in London's Mayfair area.

Riaz Haq said...

#Aid in reverse: Net flow of $2 trillion from poor to rich nations recorded in 2012. #Trade #Investment #Interest

...for every $1 of aid that developing countries receive, they lose $24 in net outflows. These outflows strip developing countries of an important source of revenue and finance for development. The GFI report finds that increasingly large net outflows have caused economic growth rates in developing countries to decline, and are directly responsible for falling living standards.

In 2012, the last year of recorded data, developing countries received a total of $1.3tn, including all aid, investment, and income from abroad. But that same year some $3.3tn flowed out of them. In other words, developing countries sent $2tn more to the rest of the world than they received. If we look at all years since 1980, these net outflows add up to an eye-popping total of $16.3tn – that’s how much money has been drained out of the global south over the past few decades. To get a sense for the scale of this, $16.3tn is roughly the GDP of the United States

What this means is that the usual development narrative has it backwards. Aid is effectively flowing in reverse. Rich countries aren’t developing poor countries; poor countries are developing rich ones.

What do these large outflows consist of? Well, some of it is payments on debt. Developing countries have forked out over $4.2tn in interest payments alone since 1980 – a direct cash transfer to big banks in New York and London, on a scale that dwarfs the aid that they received during the same period. Another big contributor is the income that foreigners make on their investments in developing countries and then repatriate back home. Think of all the profits that BP extracts from Nigeria’s oil reserves, for example, or that Anglo-American pulls out of South Africa’s gold mines.

But by far the biggest chunk of outflows has to do with unrecorded – and usually illicit – capital flight. GFI calculates that developing countries have lost a total of $13.4tn through unrecorded capital flight since 1980.

Most of these unrecorded outflows take place through the international trade system. Basically, corporations – foreign and domestic alike – report false prices on their trade invoices in order to spirit money out of developing countries directly into tax havens and secrecy jurisdictions, a practice known as “trade misinvoicing”. Usually the goal is to evade taxes, but sometimes this practice is used to launder money or circumvent capital controls. In 2012, developing countries lost $700bn through trade misinvoicing, which outstripped aid receipts that year by a factor of five.

Multinational companies also steal money from developing countries through “same-invoice faking”, shifting profits illegally between their own subsidiaries by mutually faking trade invoice prices on both sides. For example, a subsidiary in Nigeria might dodge local taxes by shifting money to a related subsidiary in the British Virgin Islands, where the tax rate is effectively zero and where stolen funds can’t be traced.

GFI doesn’t include same-invoice faking in its headline figures because it is very difficult to detect, but they estimate that it amounts to another $700bn per year. And these figures only cover theft through trade in goods. If we add theft through trade in services to the mix, it brings total net resource outflows to about $3tn per year.

That’s 24 times more than the aid budget. In other words, for every $1 of aid that developing countries receive, they lose $24 in net outflows. These outflows strip developing countries of an important source of revenue and finance for development. The GFI report finds that increasingly large net outflows have caused economic growth rates in developing countries to decline, and are directly responsible for falling living standards.

Riaz Haq said...

Maryam Nawaz named in Panama Papers, German newspaper reaffirms

A German newspaper has reaffirmed its earlier revelation regarding Prime Minister Nawaz Sharif’s daughter Maryam Nawaz’s involvement in Panama Papers scandal.

“For those in Pakistan who doubt the role of the prime minister’s daughter Mariam Safdar in Panama Papers – some of the documents. Judge yourself,” Süddeutsche Zeitung, the Germany daily, tweeted on Monday.

The newspaper posted some documents which, it said, prove that Maryam Nawaz is the beneficial owner of offshore companies named in Panama Papers.

Süddeutsche Zeitung was the first recipient of documents from Panama Papers’ whistleblower before the scandal came to fore.

Pakistan Tehreek-e-Insaf (PTI) has already submitted these documents in the Supreme Court, where a five-judge larger bench is hearing a slew of petitions against Sharif family over allegations of corruption.

The family of Prime Minister Nawaz Sharif was named in the Panama Papers, one of the biggest leaks in history. The leak, comprising 11.5 million documents from Panama-based law firm Mossack Fonseca, shows how some of the world’s most powerful people have secreted away their money in offshore jurisdictions.

Among those named are three of Sharif’s four children — Maryam, who has been tipped to be his political successor; Hasan and Hussain, with the records showing they owned London real estate through offshore companies administrated by the firm.

ICIJ released evidence proving Maryam Nawaz owner of London flats: Imran

PTI leader Imran Khan on Monday said the International Consortium of Investigative Journalists has once again released evidence proving Maryam Nawaz is the beneficiary of luxury flats in a posh London neighbourhood.

“Now that more evidence has been released, the Qatari letter and trust deed of London flats hold no value,” the PTI chief said while addressing the media in Islamabad.

Sharifs to face legal repercussions if London flats’ money trail not established: SC

“Rather than trying to prove my allegations as false, PML-N should question ICIJ and BBC over their recent revelations,” he said.

Riaz Haq said...

#Pakistan's Khanani group launders billions of dollars: US report. #UAE, #US, #UK, #Canada, #moneylaundering

In its section on Pakistan, the report notes: “The Altaf Khanani money laundering organisation (Khanani MLO) is based in Pakistan. The group, which was designated a transnational organised crime group by the United States in November 2015, facilitates illicit money movement between, among others, Pakistan, the United Arab Emirates (UAE), United States, UK, Canada, and Australia.”

The group “is responsible for laundering billions of dollars in organised crime proceeds annually. The Khanani MLO offers money laundering services to a diverse clientele, including Chinese, Colombian, and Mexican organised crime groups and individuals associated with designated terrorist organisations”, the report adds.

It describes Pakistan as strategically located country at the nexus of south, central and western Asia, with a coastline along the Arabian Sea. The report notes that Pakistan’s porous borders with Afghanistan, Iran and China facilitate the smuggling of narcotics and contraband to overseas markets.

“The country suffers from financial crimes associated with tax evasion, fraud, corruption, trade in counterfeit goods, contraband smuggling, narcotics trafficking, human smuggling/trafficking, terrorism and terrorist financing,” the report points out.

“There is a substantial demand for money laundering and illicit financial services due to the country’s black market economy and challenging security environment.”

The report notes that money laundering in Pakistan affects both the formal and informal financial systems. Pakistan does not have firm control of its borders, which facilitates the flow of illicit goods and monies into and out of Pakistan.

The report, however, acknowledges that most Pakistanis living abroad use legal channels for sending money home. From January to December 2016, the Pakistani diaspora remitted $19.7 billion back to Pakistan via the formal banking sector, up by 2.3 per cent from 2015.

The report notes that while it is illegal to operate a hawala without a licence in Pakistan, the practice remains prevalent because of poor ongoing supervision efforts and a lack of penalties levied against illegally operating businesses. “Unlicensed hawala/hundi operators are also common throughout the broader region and are widely used to transfer and launder illicit money through neighbouring countries,” the report adds.

Common methods for transferring illicit funds include fraudulent trade invoicing, unlicensed hundis and hawalas and bulk cash smuggling.

The report says that criminals exploit import/export firms, front businesses and the charitable sector to carry out their activities. Pakistan’s real estate sector is another common money laundering vehicle, since real estate transactions tend to be poorly documented and cash-based, it adds.

The report notes that in January 2015, Pakistan launched the National Action Plan (NAP), addressing primarily counter-terrorist financing. The government’s implementation of the NAP “has yielded mixed results, which is in part due to the lack of institutional capacity as well as political will,” the report adds.

“Unlicensed hawaladars continue to operate illegally throughout

Pakistan, particularly in Peshawar and Karachi, though under the NAP Pakistan has reportedly been pursuing illegal hawala/hundi dealers and exchange houses.”

The report says that Pakistan’s Federal Investigation Agency, which is responsible for investigating money laundering cases, lacks the capacity to pursue complicated financial investigations.