Terror financing_ incapable of following money trail, govt grasping at straws - pakistan - dawn.com what is laundering money

Terror financing_ incapable of following money trail, govt grasping at straws – pakistan – dawn.com what is laundering money

ISLAMABAD: despite the government’s claims that it is going to choke terrorists’ financial networks and streamline the way that religious seminaries are financed, experts are still skeptical over the outcome of these efforts, which do not seem to be rooted in ground realities.

“it is clear from the two recent meetings chaired by the prime minister, that things are not moving in any direction,” said senior journalist and security analyst zahid hussain told dawn.

In both meetings that looked at ways to crack down on the sources of terrorists’ funding, the prime minister was briefed by chaudhry nisar ali khan and his team from the interior ministry. Since no official of the finance ministry was present in both meetings, it is unlikely that any technical input was availed over the various possible modes of financing and funding that madressahs and militant groups use.What is laundering money

In the second meeting, held on jan 14, the PM announced that the national tax collection agency – the federal board of revenue (FBR) has been asked to cut off funding for proscribed organisations.

“this is strange, because madressahs are not registered tax payers or evaders. They have nothing to do with the FBR. They are tax collectors and can’t do anything about legal or illegal channels of funding for seminaries at the local or international level,” mr hussain said.

In an earlier briefing, on jan 13, the PM was told about foreign sources of funding for madressahs, but interior ministry officials failed to highlight that such inflows from abroad include both legal and illegal transactions.

On jan 14, the interior minister met saudi envoy jassem al-khaledi and to discuss ways to cut funding for proscribed organizations.

Most experts that dawn spoke to believed that with so many modes of informal money transfer available to them, including hundi/hawala and human carriers bringing money into the country, hardly any group uses normal banking channels to send or receive funds from foreign donors.What is laundering money

Govt efforts to crack down on terror financing, foreign funding for madressahs not very well thought-out

Officials confirm that none of the agencies have been able to track down the sources of the foreign funding sent to madressahs and proscribed organisations.

“there are very few people in our security agencies who have the capability of tracking down the sources of their financial support,“ lamented an official of the special branch. “but it is primarily the responsibility of the federal investigation agency (FIA) to trace improper transactions,” he said.

Even though the FIA comes under chaudhry nisar’s ministry, the agency has yet to receive any specific directives to gear up its efforts to trace suspicious transactions.

Officials speaking off-the-record told dawn that the financial crimes circle of the FIA was keeping a close eye on people suspected of being involved in the hundi/hawala business.What is laundering money but they admitted that the volume of such transactions was so large that it would be difficult to pin down individual transactions without a lot of digging.

“as far as human carriers are concerned, they are the responsibility of the customs department, who are charged with checking the baggage of international travellers and ensuring that they are not taking out or bringing in money beyond the authorised limit,” the official said.

Pakistan has cash carrying limit of $10,000 per person, both for travellers going abroad or coming into the country.

Local sources of funding

Nearly everyone dawn spoke to indicated that there was another major source of income for seminaries and banned groups that had been hitherto ignored by all concerned; local businessmen and traders.

Various international bodies have highlighted that pakistanis donate wholeheartedly to their local mosques and seminaries.What is laundering money the charities aid foundation – a UK-based charity – estimates that pakistan ranks 34th among the 153 most charitable countries of the world.

Even officials acknowledge that most of the money coming to madressahs come from donations given to religious organizations by local businessmen.

“we have noted that the business community usually tries to evade taxes, but they pay hefty amounts to mosques and madressahs without even the slightest consideration for the kind of activities they are involved in,” securities and exchange commission of pakistan chairman zafar hijazi told dawn, adding, “there have to be coordinated efforts amongst several agencies in this regard.”

The difficulties associated with streamlining madressah affairs are reflected in the fact that no department in the country has the authority to carry out regular financial and operational inspections or audits of seminaries operating in the country.What is laundering money

Published in dawn january 19th , 2015

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