Pakistan: Chasing Dirty Money


July 18, 2016

Financial crime investigators are facing many challenges in Pakistan. The undocumented economy; the nonexistence of wealth tax, inheritance tax, and gift tax; unchecked foreign remittances; and deposit-oriented commercial banking make it difficult to track dirty money earned by tax evaders and corrupt individuals. Because of this, the role of whistleblowers has become imperative in efforts to eradicate the menace of corruption and tax evasion from the society to make it equitable, just, and fair for all social classes.

The presence of large denominations of financial instruments, including currency notes and prize bonds, help people transact in cash instead of through banking channels. Thus, in most cases, it becomes difficult for financial crime investigators to develop a money trail when a suspect makes hefty investments or incurs huge cash expenses using the dirty money.  A currency note of Rs5,000 and a prize bond of Rs40,000 make it easy for tax evaders and corrupt individuals to carry huge cash amounts. The dirty cash creeps into the economic system along with white money to launder itself, thereby deceiving investigators of the Federal Board of Revenue (FBR), the National Accountability Bureau (NAB), the Federal Investigation Agency (FIA), and other provincial revenue authorities and anti-corruption establishments