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Need to curb illegal transfer of money

Need to curb illegal transfer of money

Rampant incidents of money laundering have come as a serious challenge for the economy these days and even thecentral bank of the country has to clarify its position on this pressing issue. To control the rising incidents of money laundering, the State Bank of Pakistan has decided to establish a high-tech data centerto help the Financial Monitoring Unit in tracking down illegal transfers of money and other money-related crimes, including terror financing. The government has every organ and workforce to establish its writ in any sector of the country. However, it is the question of performance for the government departments some of which under perform at the cost of taxpayers’ money. In current case of data collection, the government is going to establish the department with financial assistance from the United Kingdom Department for International Development and this puts a question mark on the financial secrecy of the country. The center will use a software developed by the United Nations Office on Drugs and Crime, which is another international organization, putting the financial secrecy of the country at stake. The software will be used to alert the authorities to automate the collection and analyze the suspicious financial transactions made through banks, foreign exchange companies and other financial entities in the country.

Reports suggest the proposed system will improve the capability of the Financial Monitoring Unitand it will be able to share information with law enforcement agencies. Experts believe that apart from physical transfer of black money from the country through airports andinternational borders, the data center will be able to detect money laundering through formal banking channels. A recent high profile case, in which a renowned model of the country was involved in the incident, is a tip of the iceberg. Money laundering is going on through prize bonds, benami accounts and many other methods right under the nose of the government departments. But there are lessons for the government officials who are sometime helpless to do anything to stop suspicious transactions due to political pressure. Apart from collection of data and beefing up security on international borders and airports, the government should introduce investment opportunities to keep the white or black money within the country. Earlier, the government efforts to block illegal money transfer could not prove fruitful as the foreign investment destinations were more attractive than local opportunities.

Money laundering is a serious issue, but makeshift steps are not an answer. It is, therefore, necessary to break the barriers of colonial past and adopt new methods to use the black or dirty money for economic development.