FBR briefing: Rs70bn laundered in solar panels import, Senate committee told

ISLAMABAD: Showing annoyance over the absence of caretaker Minister for Finance from the scheduled meeting, a Senate panel was informed by the FBR about the detection of Rs70 billion trade-based money laundering of imported solar panels with alleged connivance of banks in the shape of over-invoicing.

The solar panels were imported at a total cost of Rs72.8 billion but sold at the price of Rs45.6 billion in the local market, leading to identification of over-invoicing in 6,232 goods of declarations of 63 importers. The total amount of over-invoicing was detected to the precise amount of Rs69.5 billion.

The importers belonging to Peshawar were discovered to be located in the same building. Now the State Bank of Pakistan (SBP) has also been investigating that despite raising a red flag, why the huge cash amount of Rs45 billion was deposited without ascertaining the KYC (Know Your Customer) requirements of compliance. The senators, irrespective of political divide, asked the FBR and SBP to come up with facts as how the duty-free import of solar panels was used for money laundering.

The FBR said that the solar panels were imported from China but import remittances were transferred to third countries such as the UAE and Singapore. The FBR chairman said that as a result of the audit, two FIRs had recently been lodged against M/S Bright Star Business Solution (Pvt) Ltd and M/S Moonlight Trader (SMC) Pvt Ltd, the two importers involved in over-invoicing, obstruction of audit and using illicit funds for imports in violation of Customs Act, 1969.

The committee sought details of all the banks involved and vowed to pursue the matter with the State Bank of Pakistan and all relevant authorities for swift resolution.

The Senate Standing Committee on Finance and Revenues held its meeting under the chairmanship of Senator Saleem Mandviwala at the Parliament House in which the senators belonging to all political parties showed their annoyance over the absence of caretaker Minister for Finance Dr Shamshad Akhtar from the meeting. The chairman of the panel termed it “miscommunication” between the offices of Senate Secretariat and Ministry of Finance staff.

However, the chairman of Senate panel constituted a sub-committee, led by Senator Saadia Abbasi, for resolving all the outstanding financial issues confronted by the Azad Jammu and Kashmir (AJK), which was raised by the premier of AJK in the last meeting.

Secretary Finance Imdad Bosal stated in the meeting that Finance Ministry could not hold a meeting with AJK government despite crystal clear instructions of the Senate panel. He said he had talked to chief secretary on Wednesday morning and they decided to meet on the coming Monday or Tuesday for resolving all the financial issues of AJK.

The secretary finance went on to say that the financial constraints did not allow the Centre for any additional budgetary assistance. However, Prime Minister AJK stated categorically in the Senate committee that he was asking for funds released under the Federal Divisible Pool (FDP) of the NFC Award, which had nothing to do with the IMF.