Doing the laundry

Money laundering as a term that many are familiar with but few understand what it means. It is a criminal act, the process of transforming the profits of crime and corruption into ostensibly “legitimate” assets. For Pakistan this means that it once again finds itself on a list of international miscreants as we rank 46^th on a table of 146 countries that face significant money laundering and terrorism financing risks. The Basel Institute on Governance released a report in August but it only surfaced in the South Asian media on Friday 8^th September. Two of our close neighbours, Iran and Afghanistan, are in the top ten of money-laundering countries. There are five African countries also in the top ranking. Nepal and Sri Lanka are ranked 14^th and 25^th in the index. Surprisingly India has fared much better than its neighbours in South Asia, ranking 88^th on the list. Bangladesh and three other states, including Sudan and Israel, showed vast improvement in their ranking.

The listing, the only one of its kind, sees money laundering as trending upwards since 2012. Between 2012 and 2017 Iran and Afghanistan have alternately shared the top spot. In fact, a majority of the countries in the high-risk category demonstrated only minor fluctuations in their scores. Some key factors responsible for poor ranking include high rates of perceived corruption, a lack of judicial strength, paucity of resources to control the financial system, and a lack of public and financial transparency. The Basel Institute of Governance has pointed out that it does not actually assess the actual amount of illicit financial funds or transactions but is designed to indicate a country’s vulnerability to money laundering and terrorism financing. For a country to improve its record, it must build its capacity to reduce the anti-money laundering and countering financing of terrorism risks as a whole. 

Published in The Express Tribune, September 10^th, 2017.

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