Directorate General, Intelligence & Investigation-Inland Revenue (IR) is investigating around 200 suspicious transaction reports (STRs) received from Financial Monitoring Unit (FMU) of State Bank of Pakistan (SBP), covering high risk areas of money laundering. Sources told Business Recorder here on Friday that the agency has received these STRs from FMU which are under investigation. As soon as cases are finalized, FMU shall invariably be informed about the outcome of the same, sources said.

The agency highlighted that the proceeds of crime can easily be invested in the stock market for purpose of money laundering as no compliance with AML is required. Suspicious transactions are not reported to FMU. There is no effective mechanism to check sources of proceeds of an institutional investor.

Major risk areas in money laundering revealed that Pakistan promulgated its first money laundering law in the form of the Anti-Money Laundering Ordinance in 2007 which was reframed as theAnti Money Laundering Act, 2010. According to the AML Act, 2010, offence of money laundering includes that a person shall be guilty of offence of money laundering, if he acquires, converts, possesses, uses or transfers a property knowing or having reason to believe that such property is proceed of crime or a person conceals or disguises the true nature, original location, disposition, movement or ownership of a property, knowing or, having reason to believe, that such property is proceed of crime. Money laundering is the process of disguising the proceeds of crime and moving value through the use of any medium like trade, investment in real estate, etc, in an attempt to legitimize their illegal origins.

Proceeds of crime are invested in those sectors where there is least documentation and it becomes easy to give legal cover to ill-gotten money. The serious threat posed by this menace to the very existence of the state and social fabric is paramount. The AML Act criminalized the offence of money laundering and added a wide range of predicate offences. Sectoral vulnerabilities to the acts of money laundering in Pakistan manifest great variety. Some sectors of economy have very effective frameworks and procedures in place to check money laundering while other sectors lack fundamental regulatory mechanism. In order to counter the acts of money laundering, it is imperative to have knowledge of the national economic structure as well as vulnerabilities of different business sectors in relation to their contribution to money laundering threat. Major risk areas for money laundering in Pakistan include real estate dealers, precious metals and stones dealers, and financial sector.

Copyright Business Recorder, 2017