Pakistan

New Documents

The Pakistan Ministry of Finance issued the Foreign Currency Accounts Rules, 2020, which prohibit foreign currency accounts from being credited with any foreign exchange purchased from an authorized dealer, exchange company or money changer, except as allowed by the State Bank.

The European Union announced that the 6th round of the European Union – Pakistan Political Dialogue was held by video conference on Oct. 6, 2020, during which leaders discussed actions against money laundering and terrorist financing.

Enforcement Actions

The State Bank of Pakistan’s Offsite Supervision and Enforcement Department issued a Rs12.8 million penalty against the Karachi, Pakistan-based financial institution for procedural violations of customer due diligence and know your customer requirements.

The State Bank of Pakistan imposed a monetary fine on the Karachi, Pakistan-based bank on Oct. 4, 2019 for violating banking regulations.


Important Facts

  • The U.S. State Department labels Pakistan a major money laundering country. Significant predicate money laundering crimes include corruption, tax evasion, fraud, trade in counterfeit goods, contraband smuggling, narcotics trafficking, human smuggling/trafficking, and terrorist financing. The black market, informal financial system, and permissive security environment in Pakistan generates significant amounts of money laundering and results in the transfer of illicit gains to overseas entities. Much of the informal activity giving rise to money laundering occurs along the largely unregulated Pakistan-Afghanistan border given a lack of comprehensive regulatory oversight of the borders. Common money laundering vehicles include fraudulent trade invoicing, use of money services businesses, and bulk cash smuggling. Criminals are also known to exploit import/export firms, front businesses, and the charitable sector. Pakistan’s real estate sector is another common money-laundering vehicle, since real estate transactions tend to be poorly documented and cash-based. Unlicensed hawala/hundi operators are common throughout the broader region. The U.S. has designated the  Pakistan-based Altaf Khanami money laundering organization, as a  transnational organized crime group, responsible for laundering billions in illicit proceeds annually.
-Source: 2020 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i | 2013 Methodology

Technical Effectiveness
Compliant : 2 High : 0
Largely Compliant : 9 Substantial : 0
Partially Compliant : 25 Moderate : 1
Non-Compliant : 4 Low : 10

A "graylisted" country as of Oct. 19, 2018. Pakistan's technical compliance was re-rated in a Sept. 25, 2020 follow-up report

BASEL i

Rank : 23/125
Score : 6.45/10

TRANSPARENCY INTERNATIONAL i

Rank : 120/180
Score : 32/100

Tax Justice Network i

Rank : 100/133
Score : 55/100