The arrest of a Pakistani national in London on money laundering charges, launch of an initiative between Pakistan and the United Kingdom (UK) to repatriate looted wealth and tax recoveries from the Panama case accused have renewed hopes for accountability of corrupt people in Pakistan. The way the Supreme Court of Pakistan and the new government are moving forward, October could be a tough month for the accused.
The government is also expected to obtain data of Pakistani accounts from Swiss banks in a few months and money laundering cases would be lodged against the accused. National institutions have already detected some 2,700 properties of Pakistanis abroad and cases of money laundering and tax evasion will be registered against shortly. The Supreme Court of Pakistan is taking keen interest in the case and it is monitoring the performance of graft-busting institutions with a view to bringing back corrupt money. After the initiative between Pakistan and the UK, more properties of the Sharif family in London are expected to be identified and it could pave the way for the repatriation of two sons of former Prime Minister Nawaz Sharif, who are wanted in Pakistan for corruption and money laundering.
The London arrest of Farhan Junejo, a former close aide to the late PPP leader Makhdoom Amin Faheem, is a threat to Pakistanis, who own properties in the UK or elsewhere. According to the National Crime Agency (NCA) of Britain, it had briefly arrested a Pakistani “politically exposed person” and his wife over alleged money laundering. Farhan Junejo, 40, was a co-accused of Amin Faheem in the Trade Development Authority of Pakistan (TDAP) corruption scandal. Besides, he was also accused of causing a loss of billions of rupees to the national exchequer. Junejo was director to former Minister for Industries and Trade Amin Faheem in the last PPP government and allegedly transferred Rs250 million of corrupt money through illegal means of hawala and hundi.
The Federal Investigation Agency (FIA) had found evidence of billions of rupees being transferred to accounts abroad, accusing the Trade Development Authority of Pakistan (TDAP) officials for the laundered money in 2013. The NCA says the probe was supported by Pakistan’s National Accountability Bureau and the Federal Investigation Agency. The couple was arrested for failure to prove a legitimate source of income of £8 million assets. It is alleged that Farhan Junejo was a front man of the then Minister Amin Faheem. He was a grade-18 officer but appointed on deputation in the federal ministry of industries and trade, where he worked as director to the minister from 2009 to 2012. The arrest was made on the day when the UK and Pakistan reached an agreement to work towards curbing money laundering and repatriating assets stashed by Pakistanis in the UK. Pakistan Law Minister Dr. Farogh Naseem and British Home Secretary Sajid Javid jointly announced the justice and accountability initiative between the UK and Pakistan aimed at repatriating the looted wealth of the country.
British High Commissioner in Pakistan Thomas Drew also hinted at extradition of proclaimed offenders of the Sharif family to Pakistan, saying that the British government would consider any request of the Pakistani government. When asked by the media about the strategy of the British government for the repatriation of the accused Pakistanis in money laundering cases, including former Finance Minister Ishaq Dar and former Prime Minister Nawaz Sharif’s sons Hassan and Hussain Nawaz, he replied, “I can’t comment on individual cases, however, we will consider any request made by the Pakistan government on merit.” He said his country had offered Pakistan’s new government its technical assistance to address the issue of money laundering to get itself out of the Financial Action Task Force (FATF) grey list.
The Supreme Court of Pakistan has also ordered the FIA to complete its probe into 2,700 properties acquired by Pakistanis abroad. The court has taken suo motu notice of fake bank transactions worth billions of rupees. Former President Asif Ali Zardari, his sister Faryal Talpur and others are being investigated by the FIA for using fake accounts and their alleged involvement in fraudulent bank transactions to the tune of Rs35 billion.
Meanwhile, the Swiss government has announced sending data on offshore bank accounts to foreign tax agencies. It is hoped that Pakistan will also receive data of its nationals holding Swiss accounts and action would be taken against them. According to a Bloomberg report, when Switzerland pushes the button to send data on offshore bank accounts to foreign tax agencies this fall, it will be doing what was once virtually unthinkable: abandoning the absolute secrecy once afforded to anyone parking their cash in Zurich or Geneva. The automatic exchange of account information due to take place with other European countries is the last chapter in a saga that began with the arrest of former UBS Group AG banker Bradley Birkenfeld in 2008, cost Swiss banks more than $6 billion in fines, and prompted criminal probes and travel bans for bankers. The crackdown started in 2008. Led by the U.S. and soon vigorously pursued by Germany, France, Italy and others, it put the spotlight on how the rich hid money from the tax man with the help of Swiss banks.
In another rare development, Pakistan tax authorities have reported their first recoveries under investigations into assets held by individuals named in the Panama and Paradise papers. Data from the Federal Board of Revenue (FBR) shows that Karachi and Islamabad tax units have made the first recovery of tax since the start of the exercise. The FBR has recovered Rs6.2 billion and the recovery of Rs4.64b remains under process. In September 2016, the FBR Intelligence Directorate had issued 444 notices to owners of the offshore companies mentioned in the Panama Papers. Notices could not be issued to 151 individuals, who remained “untraceable.” In the Paradise Leaks, 38 individuals were identified, who had purchased properties abroad. The FBR has issued notices to only two individuals, who were traceable. However, no recovery has been made so far. The Bahamas Leaks had named 150 Pakistanis. However, the whereabouts and identities were established only in 108 cases. But the FBR has not issued a single notice in the case.
The government has set up a task force and announced new legislation to fulfil its promise of retrieving ill-gotten wealth of Pakistanis in foreign countries. The task force comprises officials of the Federal Investigation Agency, National Accountability Bureau and intelligence agencies. The government has also decided to enforce an anti-corruption rule which offers informers 20 per cent of the looted wealth. Initially, the government plans to target 100 big fish to retrieve ill-gotten wealth stashed in foreign countries. The Supreme Court of Pakistan has also summoned at least top 15-20 persons, who own offshore properties. It is hoped the accountability process will pick up pace in October.