Washing the money
Over $9 billion has been remitted out of Pakistan according to a report presented by the then SBP governor in 2013
Over $9 billion has been remitted out of Pakistan according to a report presented by the then governor of the State Bank of Pakistan in 2013. PHOTO: FILE
For all the fuss currently being made by politicians on all sides about accountability and financial transparency, it transpires that Pakistan’s legal environment actually facilitates money laundering, and that environment is deliberately constructed — by politicians. As a report in this newspaper narrates, attempts to limit or prosecute the activities of money launderers and tax evaders in the life of this government as well as previous governments have been nullified by the body of law which prevents meaningful action against those that wish to wash their cash, dirty or merely dodgy.
The sums of money laundered are considerable. Over $9 billion has been remitted out of Pakistan according to a report presented by the then governor of the State Bank of Pakistan in 2013. It is impossible to even estimate the amount of money transferred abroad via foreign currency accounts as they operate under the umbrella of the Protection of Economic Reforms Act 1992. And who initiated this gaping fiscal loophole? Why none other than the current prime minister during his first term. Industrialists and politicians promptly loaded their cash into the machine and voila! Clean cash. This is not mere anecdote, this is backed up by statements and court records. The overt purpose of the legislation was to create a liberal savings and investment environment, but it ended up creating a kind of Nirvana for those wealthy enough to have large sums of money that they wished to conceal. Nothing has changed since 1992, the legislation that enables money to be moved out of the country without let or hindrance remains in place. Successive governments have added to the layers of immunity, and any investigation into the movements of money out of the country virtually impossible. Tax experts believe that any judicial commission would be unable to establish anything against any named person in respect of the Panama leaks for the simple reason that they are protected by the country’s laws. We expect no early change to this anomalous state of affairs.
Published in The Express Tribune, May 26th, 2016.
The sums of money laundered are considerable. Over $9 billion has been remitted out of Pakistan according to a report presented by the then governor of the State Bank of Pakistan in 2013. It is impossible to even estimate the amount of money transferred abroad via foreign currency accounts as they operate under the umbrella of the Protection of Economic Reforms Act 1992. And who initiated this gaping fiscal loophole? Why none other than the current prime minister during his first term. Industrialists and politicians promptly loaded their cash into the machine and voila! Clean cash. This is not mere anecdote, this is backed up by statements and court records. The overt purpose of the legislation was to create a liberal savings and investment environment, but it ended up creating a kind of Nirvana for those wealthy enough to have large sums of money that they wished to conceal. Nothing has changed since 1992, the legislation that enables money to be moved out of the country without let or hindrance remains in place. Successive governments have added to the layers of immunity, and any investigation into the movements of money out of the country virtually impossible. Tax experts believe that any judicial commission would be unable to establish anything against any named person in respect of the Panama leaks for the simple reason that they are protected by the country’s laws. We expect no early change to this anomalous state of affairs.
Published in The Express Tribune, May 26th, 2016.