Failure in money laundering control and institutional weaknesses exposed in Pakistan

Islamabad: The International Monetary Fund (IMF) has revealed in its latest report that Pakistan has failed to effectively prevent money laundering schemes, while there are significant weaknesses in the use of beneficial owner data and cooperation between institutions.

According to sources, the IMF’s Governance and Corruption Diagnostic Assessment report is due to be released this month and its draft has been sent to the Pakistani government for detailed review of the recommendations. The report says that the beneficial ownership framework is of fundamental importance for Pakistan, but gaps in legislation and lack of inter-institutional access are hindering its effective implementation.

The IMF says that data sharing in financial investigations between key institutions including the SECP, State Bank and FBR is negligible, while lack of communication between commercial banks and investigative agencies is also a serious problem.  This decline has made it difficult to prevent fake companies from getting government contracts.

To improve institutional cooperation, the IMF has proposed the establishment of a working group to ensure transparency and effectively prevent financial crimes.