Saturday, September 26, 2020

FinCEN Files: UK is Global Center For Money Laundering and Pakistan Among its Top 3 Sources

The latest leaks of US FinCEN (Financial Crime Enforcement Network) files show that the United Kingdom (UK) is the biggest global center for money laundering. An earlier report issued by the British Crime Agency put Pakistan among the world's top sources of money laundering in the United Kingdom. The latest FinCEN leaks represent just the tip of an iceberg. The leaked 2,100 FinCEN files covering $2 trillion worth of transactions that ICIJ (International Consortium of Investigative Journalists) and Buzzfeed reporters got their hands on represent just a small sliver of the roughly 12 million SARs FinCEN has received since 2011. Pakistan's Prime Minister Imran Khan has repeatedly raised the issue of the West's inaction in stopping the illicit flows of hard currencies from developing nations to the developed world. Money laundering and other financial crimes affect the economic roots of a nation like Pakistan and slow down its human and socioeconomic development.

FinCEN Leaks Represent Tip of Iceberg

FinCEN Leaks:

Financial Crimes Enforcement Network (FinCEN) is an arm of the U.S. Treasury Department responsible for keeping tabs on and combating money laundering. All banks are required by US Law to file SARS (Suspicious Activity Reports) of transactions involving unclear sources and beneficiaries, or those connected to jurisdictions with a history of financial crime. 

Banks file about 2.2 million such transactions each year. Very few of these are actually reviewed or investigated by the US government. Recently, journalists at Buzzfeed and the International Consortium of Investigative Journalists (ICIJ) have announced they have obtained 2,100 FinCEN files covering $2 trillion worth of transactions that  represent just a small sliver of the roughly 12 million SARs FinCEN has received since 2011. Some of the biggest western banks, including HSBC, JP Morgan, Barclays and Standard Charter Bank are named among the institutions reporting SARS. 

Pakistani Banks:

There are six Pakistani banks named among those filing suspicious activity reports with FinCEN. The banks named are Allied Bank, United Bank (UBL), Habib Metropolitan Bank, Bank Alfalah, Standard Chartered Bank Pakistan, and Habib Bank (HBL). According to the data revealed by ICIJ, 29 such suspicious transactions from and to Pakistan were flagged. Of those, the ‘received’ transactions amounted to $1,942,560, while the ‘sent’ transaction was $452,000. 

FinCEN leaks show suspicious activity of a Dubai-registered company linked to Altaf Khanani of Pakistan through accounts at Danske Bank. “There can only be one reason why money has been moved out of Danske Bank and into his trading companies - and that is money laundering. Because that was the only thing that happened in those companies,” says Richard Grant, the former head of the Australian intelligence service told DR, a Danish news platform. 

Pakistan Among Top 3 Sources:

British National Crime Agency (NCA) has identified Pakistan, Nigeria and Russia as the top source countries for money laundering in the United Kingdom, according to British media reports. The NCA report says the UK is a prime destination for foreign corrupt and politically exposed people (politicians and their families) to launder money. 

In its annual assessment of serious and organized crime, the NCA says: “Investment in UK property, particularly in London, continues to be an attractive mechanism to launder funds....As the UK moves towards exiting the EU in March 2019, UK-based businesses may look to increase the amount of trade they have with non-EU countries....We judge this will increase the likelihood that UK businesses will come into contact with corrupt markets, particularly in the developing world, raising the risk they will be drawn into corrupt practices.”

Here are some of the key excerpts of the UK NCA report titled "National Strategic Assessment of Serious and Organized Crime 2018":

1. "The UK is a prime destination for foreign corrupt PEPs (politically exposed persons, a euphemism for politicians and their family member) to launder the proceeds of corruption. Investment in UK property, particularly in London, continues to be an attractive mechanism to launder funds. The true scale of PEPs investment in the UK is not known, however the source countries that are most commonly seen are Russia, Nigeria and Pakistan".

2. "The overseas jurisdictions that have the most enduring impact on the UK across the majority of the different money laundering threats are: Russia, China, Hong Kong, Pakistan, and the United Arab Emirates (UAE). Some of these jurisdictions have large financial sectors which also make them attractive as destinations or transit points for the proceeds of crime."

Politicians Dominate Panama Papers

Panama Papers Leak:

The NCA report says there are "professional enablers from the banking, accounting and legal world" who  facilitate the legitimization of criminal finances and are perpetuate the problem by refinancing further criminality.

In fact, there is an entire industry made up of lawyers and accountants that offers its services to help hide illicit wealth. Mossack Fonseca, the law firm that made headlines with "Panama Leaks", is just one example of companies in this industry.

Mossack Fonseca's 11.5 million leaked internal files contained information on more than 214,000 offshore entities tied to 12 current or former heads of state, 140 politicians, including Pakistan's now ex Prime Minister Nawaz Sharif's family.  Icelandic Prime Minister resigned voluntarily and Pakistani Prime Minister was forced out by the country's Supreme Court.

The Panama list included showbiz and sports celebrities, lawyers, entrepreneurs,  businessmen, journalists and other occupations but it was heavily dominated by politicians.

Pakistani Names in Panama Leaks:

Pakistani politicians and their supporters use allegations of corruption in Pakistani military to distract attention from their own well-documented corruption. Just a quick look at the names in leaked Panama Papers shows that politicians, not generals, dominate these lists. Pakistani names included in Panama Papers are those of several politicians and business people, but no generals, according to media reports.

 Prime Minister Nawaz Sharif is linked to 9 companies connected to his family name. Those involved are:  Hassan Nawaz, Hussain Nawaz, Maryam Nawaz, Relatives of Punjab Chief Minister and brother of Prime Minister Shahbaz Sharif are linked to 7 companies. They are: Samina Durrani and Ilyas Meraj.

Former Prime Minister Benazir Bhutto was linked to one company. Her relatives and associates are linked to others: Nephew Hassan Ali Jaffery Javed Pasha, Close friend of Asif Ali Zardari (4 companies), PPP Senator Rehman Malik (1 company), PPP Senator Osman Saifullah’s family (34 companies), Anwar Saifullah, Salim Saifullah, Humayun Saifullah, Iqbal Saifullah, Javed Saifullah, Jehangir Saifullah. The Chaudharies of Gujrat have not been linked personally but other relatives have including: Waseem Gulzar Zain Sukhera (co-accused with former Prime Minister Yusuf Raza Gilani’s son in the Hajj scandal).

Pakistani Businessmen in Panama Leaks: Real Estate tycoon Malik Riaz Hussain’s son (Bahria Town) Ahmad Ali Riaz (1 company), Chairman ABM Group of Companies Azam Sultan (5 companies), Pizza Hut owner Aqeel Hussain and family (1 company), Brother Tanwir Hassan Chairman Soorty Enterprise Abdul Rashid Soorty and family, Sultan Ali Allana, Chairman of Habib Bank Limited (1 company), Khawaja Iqbal Hassan, former NIB bank President (1 company), Bashir Ahmed and Javed Shakoor of Buxly Paints (1 company), Mehmood Ahmed of Berger Paints (1 company), Hotel tycoon Sadruddin Hashwani and family (3 companies), Murtaza Haswani Owner of Hilton Pharma, Shehbaz Yasin Malik and family (1 company), The Hussain Dawood family (2 companies), Shahzada Dawood Abdul Samad Dawood Partner Saad Raja, The Abdullah family of Sapphire Textiles (5 companies), Yousuf Abdullah and his wife, Muhammad Abdullah and his wife, Shahid Abdullah and his family, Nadeem Abdullah and family, Amer Abdullah and family, Gul Muhammad Tabba of Lucky Textiles, Shahid Nazir, CEO of Masood Textile Mills (1 company), Partner Naziya Nazir Zulfiqar Ali Lakhani, from Lakson Group and owner of Colgate-Palmolive, Tetley Clover and Clover Pakistan (1 company) and Zulfiqar Paracha and family of Universal Corporation (1 company).

Pakistani Judges in Panama Leaks: Serving Lahore High Court Judge Justice Farrukh Irfan, Retired Judge Malik Qayyum, Pakistani Media personnel in Panama Leaks: Mir Shakil-ur-Rehman of GEO-Jang Media Group (1 company).

FinCEN vs Panama Leaks: 

FinCEN leaks differ from previous bank leaks such as the Panama Papers in a crucial way: They are a snapshot into financial crime that banks are openly reporting to the authorities. 

These files mean, on a basic level, the reporting system is functioning. But the same leaks also show that banks frequently filed a SAR months after the transaction had taken place, and sometimes multiple times on the same client without anyone seemingly taking any action. 

West's Inaction Hurts Poor Nations:

Speaking to the 75th plenary session pf the United Nations General Assembly (UNGS), Pakistan's Prime Minister Imran Khan raised the issue of the West's inaction is stopping the illicit flows of hard currencies from developing nations to the developed world. He said:"Every year billions of dollars leave poor countries & go to rich countries. Billions of dollars siphoned by corrupt politicians to tax havens ,expensive properties bought in western capitals. It is devastating to the developing world".  

Pakistanis see the United Kingdom as the "Money Laundering Capital of the World" where corrupt leaders from developing nations use wealth looted from their people to buy expensive real estate and other assets. Private individuals and businesses from poor nations also park money in the west and other off-shore tax havens to hide their incomes and assets from the tax authorities in their countries of residence.

The multi-trillion dollar massive net outflow of money from the poor to the rich countries has been documented by the US-based Global Financial Integrity (GFI). This flow of capital has been described as "aid in reverse". It has made big headlines in Pakistan and elsewhere since the release of the Panama Papers and the Paradise Leaks which revealed true owners of offshore assets held by anonymous shell companies. Bloomberg has reported that Pakistanis alone own as much as $150 billion worth of undeclared assets offshore.


The latest FinCEM leaks and previous Panama Papers as well as British crime agency reports confirm that the UK has attracted vast sums of illicit wealth from Pakistan and other emerging economies. Speaking to the 75th plenary session of the United Nations General Assembly (UNGS), Pakistan's Prime Minister Imran Khan raised the issue of the West's inaction is stopping the illicit flows of hard currencies from developing nations to the developed world. He said:"Every year billions of dollars leave poor countries & go to rich countries. Billions of dollars siphoned by corrupt politicians to tax havens ,expensive properties bought in western capitals. It is devastating to the developing world".  Money laundering and other financial crimes affect the economic roots of a nation like Pakistan and slow down its human and socioeconomic development.

Related Links:

Haq's Musings

South Asia Investor Review

The West Enables Corruption in Developing Nations

Did Musharraf Steal Pakistani People's Money?

Pakistan Economy Hobbled By Underinvestment

Raymond Baker on Corruption in Pakistan

Nawaz Sharif Disqualified

Culture of Corruption in Pakistan

US Investigating Microsoft Bribery in Pakistan

Zardari's Corruption Probe in Switzerland

Politics of Patronage in Pakistan

Why is PIA Losing Money Amid Pakistan Aviation Boom?

Riaz Haq's Youtube Channel

PakAlumni Social Network


Anonymous said...

That's what floats the British boat-after loss of colonies!
The Spider's Web: Britain's Second Empire

In 2018
The Spider’s Web documentary viewed over one million times on YouTube

But is not enough.

: Britain’s balance of trade averaged minus £1458.28 million from 1955 to 2016. Our trade deficit has become chronic. As Des Cohen, who was in the Treasury’s economics team at the time, wrote for openDemocracy back in November, it was the realisation that the Commonwealth wasn’t a big enough market for exports that lured Britain into join the EU in the first place. But, while leaving the Common Market certainly won’t help, joining it didn’t solve the problem either: our long term trade figures are a disaster. What Fox’s meeting highlights is that the government is being forced by Brexit to reveal its thinking in this area, and show that it really doesn’t have any better ideas than falling back on what the Financial Times’ James Blitz calls ‘delusions‘ and wishing that the last century hadn’t happened.

There’s another way to look at this problem. As the New Economics Foundation’s Laurie Macfarlane told me when I interviewed him last week, “much of the increase in paper wealth… that’s happened in the UK… since world war two, has actually been not a result of producing more stuff: it’s basically the result of increases in house prices: asset price inflation.”

In other words, since the end of world war two – which marked the beginning of the end of the British Empire, the UK hasn’t really figured out how on earth to pay our way in the world. Even during the days of imperialism, our trade successes came at the barrel of a gun and with the advantage of being at the centre of a vast sterling zone: it’s not because of a nose for the market that BP and HSBC had their early success, but because of the gunships sat in the port behind them. As, over the decades, country after country has secured independence and left the Sterling Zone, we’ve resorted to inflating the prices of the assets we built up over a couple of centuries and more of empire, and rapidly flogged them off.

Of course, much of this strategy still relies on our imperial remnants. Our Overseas Territory secrecy areas put London at the centre of the world’s money-laundering nexus. As Donald Toon, head of the National Crime Agency, described to the Financial Times “the London property market has been skewed by laundered money. Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK”.

The right loves to talk about how Britain is a ‘trading nation’. But that, of course, is just another lie. The truth is that we are terrible at trade. We buy much more than we sell, and produce little that anyone wants. We’re so bad at selling things to the rest of the world that the government has started producing patronising adverts trying to coax British businesses into the international market. Even in the days when people did pay for our stuff, it was usually under duress.

Rks said...

How much of the money from Pakistan is from its Generals????

Riaz Haq said...

Rks: "How much of the money from Pakistan is from its Generals????"

You can read all the Pakistani names with offshore accounts in leaked documents.

There are no generals among them....only the top politicians and businesspeople.

samir sardana said...

The Pakistani MOFA and ISI,are missing an Opportunity,in FINCET.The maximum number of banks in Asia,in FINCET, are in India.

People say Y ? dindooohindoo

The NPAs of the Indian Banking system,would be Rs 30,00,000 crores (post COVID),and every year the banking and financial frauds,are Rs 150000 crores

All this stolen money,has to be laundered.Post Demonetisation - there is no safe haven,in real estate,and the Indian state being bankrupt,will soon start seozing idle and surplus lands,and also,demonetising bank deposits,and will also,demonetise the Rs 2000/- currency note.

Hence,this CASH has to EXIT India,and it will be caught by the US/UK and EU Int and Teasury cells (in terms of surveil).

The Chors who defraud the Indian Banking system,are all Banias.If you analyse the Poitical leaders,of the Hindoo Right WIng - they are are ALL Banias.The Ideologues of the Hindoo Right Wing,are Brahmins.The Hindoo Right WIng has CREATED these vermin bania bandits,to loot the banking system - to share a BULK of the Booty,with the Hindoo Right WIng. Thereafter, these vermin bania bandits, are exported to London - by the Hindoo Right Wing. There are many of these vermin bania bandits,ensconced in London.

The VHP,Hindu Mahasabha,Bajrang Dal,Durga Vahini,Sita Vahini,Ram Sena,Bandar Sena .....are all funded by these vermin bania bandits.It is not relevant that Durga was a prostitute who indulged in necrophilia in cadavers,and thus spent most of her time in graveyards.

All these Senas are ALSO headed by Banias (as the cash has to be accounted),but the Food Soldiers are Non-Banias.These Senas and Banias,planned and financed,the destruction of Babri Masjid,and Godhra,and the Muslim Lychings in India.These Senas and Banias,also FUND the juvenile,BUT RABID,anti-Pakistani,and anti-Muslim Propoganda,on the INDIAN Hindi TV media.

These Bania vermin also build temples,which get free land,from the state,and then,use the ill gotten cash,to launder it in tax exemot temple trusts,while also,stealing the offerings of Hindoo devotees,and using the temple premises,to stock arms and ammunitions,and operate illegal printing presses.

The entire banking and legal system,Tax laws,Company Law,RBI rules etc. - are designed to ALLOW,a few to RIP off the Indian People - and share the loot,with the Hindoo Right Wing - as the populace,is completely bewitched,by the fantasy Hindoo land stories,and subsumed,in the hate of Frankensteins created by the media - which plays on the insecurities and complexes,of a nation of heathens and menials.

And that is the link to Right Wing Hindoo terror and the financing of a Nazi Regime in India.

I am sure that if the ISI applies their mind to the above thesis,it will yield miraculous results.

Riaz Haq said...

#TransparencyInternational #UK Head : “Foreign politicians with convictions relating to corruption should not enjoy impunity in Britain. Nor should their unexplained wealth, stashed in luxury London properties, fall out of the reach of law enforcement"

Mr Sharif “has been responsible for pillaging the state and I trust that you will be supportive of our efforts to bring those responsible for corruption to account”, Mr Khan’s adviser, Mirza Shahzad Akbar, wrote to Ms Patel on October 5.

After the Panama Papers revealed hidden assets belonging to Mr Sharif’s family, he resigned as prime minister in 2017. The following year a Pakistan court sentenced him to seven years’ imprisonment for corruption. He has claimed that this and other corruption cases against him are politically motivated.

In November 2019 he flew to London after the Pakistan authorities granted him leave to travel abroad for eight weeks to seek treatment for various conditions. He sought an extension of his temporary release but the Pakistan authorities refused on the grounds that he had offered inadequate medical evidence and ordered Mr Sharif to return home.

According to records submitted to the Pakistan authorities, he has given as his London address the very flat on London’s opulent Park Lane that led to his downfall. His family’s ownership of the flat was exposed by the leak of secret files from the Panama law firm Mossack Fonseca.

The letter to Ms Patel urges her to use her “extensive powers” to deport Mr Sharif, arguing she is “duty bound” to do so. It cites immigration rules that criminals sentenced to four years or more must be refused leave to remain in the UK. A Pakistan court has issued a warrant for Mr Sharif’s arrest, the letter adds.

A Pakistan official said the UK had not yet formally responded. The Home Office declined to comment.

“Foreign politicians with convictions relating to corruption should not enjoy impunity in Britain. Nor should their unexplained wealth, stashed in luxury London properties, fall out of the reach of law enforcement,” said Daniel Bruce, head of Transparency International UK.

“The UK government should work constructively with democratic countries such as Pakistan to uphold the rule of law. Action should also be taken to seize and return illicit assets held here in Britain in order to deliver justice for the victims of corruption. Failure to act on cases such as this, earns the UK an unwelcome reputation as a safe haven for dirty money.”