Customs intelligence unearths cases of trade-based money laundering

Customs intelligence unearths cases of trade-based money laundering

Customs intelligence unearths cases of trade-based money laundering

KARACHI: The Customs Intelligence and Investigation (I&I), Karachi has unearthed cases of trade-based money laundering ahead of a review meeting on Pakistan by the Financial Action Task Force (FATF).

The FATF retained Pakistan in the grey list in its last meeting held in October 2021 till the next meeting scheduled for February 2022.

Sources in the Customs intelligence said that some culprits were indulging in dodging the authorities for sending foreign exchange abroad using the medium of banking channels for import payments.

The Customs intelligence, a powerful monitoring unit of the Federal Board of Revenue (FBR), has initially detected Rs8 million in two cases and started legal action.

The fiscal fraud was done by Four Brothers and Hassan Steel, according to official documents made available to BOL News.


The sources said these two importers had obtained a letter of credit from a domestic bank to obtain foreign exchange for their subsequent foreign suppliers. However, to remit the amount and satisfy the requirement of the State Bank of Pakistan (SBP) in meeting the requirement, the importers had arrangements abroad.

Besides, the same LC issued by the bank was misused by another importer by generating fake bill of lading to change the consignee and to avail exemption and concession, the sources added.

The sources also said the unit was interrogating other authorities, including Customs officials for clearance of such consignments.

The SBP in October 2021 made stringent laws related to the trade-related anti-money laundering/combating financing of terrorism (AML/CFT) regime and restrict possible misuse of the banking channel.

The central bank directed the banks to educate their clients about their obligation of ensuring correct declaration of particulars on the prescribed forms, utilisation of foreign exchange for the exact purpose for which it is acquired by them and repatriation of foreign exchange that represents the full export value of the goods.

The FATF put weight on strict control of its member countries over AML and CFT. Pakistan has almost met all the conditions of the FATF after tightening the laws to stop money laundering. The Customs authorities also made sure to stop currency smuggling through passengers going abroad.


Many countries in the world such as Australia, Singapore, Malaysia, the US, Canada, Saudi Arabia and the UAE are giving visas for permanent residency/businesses against the deposit of a specified amount in that country, an official report said.

“Many Pakistanis have availed/or are availing this facility by sending/depositing the specified amount in the country of destination, which issues a specified visa for such travel on the Pakistani passport,” the report showed.

Since transferring foreign currency out of the country or making transfer without logical reasons is not possible; therefore, such culprits are making transfers under the garb of import payments, the sources said.

Pakistan’s import bill massively surged 59 per cent to $46.47 billion during the first seven months of the current fiscal year 2021/22, compared with $29.85 billion in the corresponding period of the last fiscal year.

The authorities need to check loopholes to stop illegal outflows using legal channels.

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