Pakistan to arrest more dealers illegally transferring dollars

November 13th, 2008 - 4:31 pm ICT by IANS  

Pervez MusharrafIslamabad, Nov 13 (IANS) Pakistan’s top crime fighting body, the Federal Investigation Agency (FIA), will soon arrest more currency dealers involved in illegally sending US dollars out of the country allegedly to the tune of $10 billion which has sent the country’s currency into a tailspin against the dollar, according to a senior FIA official.Last week, Pakistan’s top crime fighting body, FIA arrested seven currency dealers who were allegedly involved in illegally sending out some $10 billion out of the country leading to the Pakistani currency, rupee, falling to 86 to a dollar from 60 to a dollar in March this year.

A new democratically elected government came to power in March this year after former President General Parvez Musharraf held elections in February. Musharraf has since stepped down from the office of President as well.

After the arrests, the rupee has climbed to 79 to a dollar.

According to FIA sources, last week’s arrest of leading currency dealers Khanani and Kalia led to five more arrests and the computers of these dealers having a record of illegal transactions have also been taken into custody.

“Some of the dealers have escaped the country or have gone underground and we are trying to trace them,” a senior FIA official told IANS.

“Some currency dealers were cooperating with the investigators and we’ll soon make some more high profile arrests,” he said.

The official said that some politicians, leading businessmen and bureaucrats are involved in the scam. “We are also tracing some multi-national companies who illegally transferred dollars from Pakistan,” the official said.

“Soon the names of these individuals and companies would be made public,” the official said adding that some of them were misusing the names of top government officials. However, he did not reveal who these top officials were.

Advisor to Prime Minister on Interior Rehman Malik has said that nobody could be allowed to run a parallel banking system and harm the economy.

He said the outflow of dollars had been going on for a long time and a large number of people were involved in it.

The State Bank of Pakistan (SBP) spokesman said that the central bank is also continuously monitoring exchange companies and it has also taken some specific action against companies on account of violations of foreign exchange rules & regulations during the last two years.

He said that with the transformation of Authorised Money Changers (AMCs) into formal exchange companies, a large number of undocumented transactions have come under the fold of formal framework, which require proper documentation, record keeping and adherence to internationally accepted Know Your Customer norms.

It also enabled the SBP to substantially narrow the gap between interbank and kerb market rates, which plays an important role in improving the flow of home remittances.

A senior government official blamed the former military regime of General Pervez Musharraf for authorizing money changers to transfer money.

“Strangely, through an executive order, the previous government in 2003 authorized money dealers to transfer money which caused the mess,” said the official, adding this law was passed secretly and only selected money dealers came to know of it as the order was never posted on the official web sites of the State Bank or government for public information.

Since 2003, the money changers were authorized to change any amount of Pakistani rupee (PKR) into any foreign currency and vice versa without proper documentation. The walk in clients were allowed to change their money and walk out without declaring any personal information and purpose of changing the money.

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