Law to control illegal laundering of money inadequate in PakistanDecember 6th, 2008 - 4:57 pm ICT by ANI
Islamabad, Dec.5 (ANI): Experts here have termed the anti-money laundering law in Pakistan inadequate, saying that it indirectly sanctions money laundering.
Speaking at a Seminar on Money laundering and Pakistan organised by the Pakistan Institute for Legislative Development and Transparency experts opined that it is for the government and not service providers, operating in the open market to determine that the money required to be transmitted is legal or ill-gotten. President of the Research Society for International Law, Ahmer Bilal Soofi, said that the law only covered a certain areas of formal sector and banking transactions and there was a great scope for improving it.
The regulatory authorities, including the State Bank and Securities and Exchange Commission of Pakistan, should take effective steps to curb hawala and hundi and terror financing,Soofi said.
Transactions done ordinary people were not money laundering unless the money transferred was linked to certain category of crimes called predicate offence, he added.
According to International Monetary Fund the estimated money laundering flow exceeded one trillion dollars every year.
The aggregate size of money laundering in the world is expected to be between two and five per cent of the world GDP.
Meanwhile, Raheel Rana, an anti-money laundering expert, defined money laundering as insertion of illegally obtained funds into the financial system.
Money laundering involves transactions intended to disguise the true source of funds and their ultimate disposition, evade income tax and eliminate an audit trail and make it appear as though the funds came through legitimate sources, he said.
Money laundering has a negative effect on the economy, Government and social wellbeing.
It distorts business decisions, increases the risk of bank failures, takes control of economic policy away from the government, harms countrys reputation and exposes people to drug-trafficking, smuggling and other criminal activities, Rana said.(ANI)
Tags: aggregate size, bank failures, business decisions, drug trafficking, economy government, formal sector, hawala, hundi, international monetary fund, legislative development, legitimate sources, money laundering law, pakistan institute, pakistan islamabad, regulatory authorities, securities and exchange commission, securities and exchange commission of pakistan, social wellbeing, soofi, world gdp