Policymakers also benefit from foreign remittances

ISLAMABAD: Not only apolitical entrepreneurs are ‘contributing’ to the foreign exchange reserves through receiving remittances from abroad while doing business in Pakistan, persons in the position of power have also been found involved in this practice.
A senior government official with status of minister of state, along with some members of his family, is facing National Accountability Bureau’s inquiry for receiving ‘remittances’ to the tune of Rs700 million. The probe lingers on, as he is reluctant to disclose the source of this hefty remittance, taking refuge behind the Economic Reform Act, 1992.
The Act prohibits questioning the source of remittance and this has opened the floodgates of money laundering as big businesses often send money abroad through hundi channel to get back the amount in dollars the same day through banking channels to evade taxes and avoid documentation.
“I can tell anything NAB wants but they should change the rules,” said the senior government official, when told that NAB officials had accused him of not disclosing his remittance source.
Asked who will change the rules if he can’t, as he is a policy maker who can recommend legislation for arresting the revenue leakage, he said he has just been appointed, forgetting the role he could have played as a lawmaker. He is a former MPA/Senator and son of one of the senior retired generals.
Other than working on the official assignment of devising ways and means of increasing the tax base, he is a director of a policy-related institute founded by his family. Some members of his family also hold positions in the institute.
Members of his family also remained on senior government positions during the regime of Gen Pervez Musharraf.
While talking to The News, he said he didn’t want to be bracketed with other business individuals highlighted in our story published on September 3 about the alleged money laundering.
He, however, feigned ignorance about

the source of his remittances that landed him in trouble. “I will have to check (who sent Rs700 million remittances),” he replied when asked by The News. He is unable to recall the sender of this huge amount, notwithstanding the fact the money was invested in the family’s sugar mill in Punjab and he has been facing accountability officers since 2013.
NAB had received a Suspicious Transaction Report (STR) lodged under Anti Money Laundering Act, 2010 from the State Bank of Pakistan’s Financial Monitoring Unit against the alleged accused persons in 2012.
The STR reported high volume of foreign remittances received in the accounts of the accused that was subsequently transferred to the company account of the sugar mill, a NAB official said.
“We are looking into different possibilities — like money laundering and corrupt practices,” the NAB official said while talking to The News explaining that while FBR can’t question the source of remittances, it can do what is mandated under National Accountability Ordinance 1999.
Besides working in the sugar mill, the said senior official and some members of his family are also directors in a company in Punjab.
Incidentally, he was part of the senate’s standing committee that had approved Anti-Money Laundering Bill 2010, which has been invoked by NAB to conduct inquiry against him.
“I had expressed my reservation even when the bill was being finalized”, he recalled, fearing that STR would be used more against the business community than suspected terrorists but the government had given assurance that it would not be ‘misused’. There is no fiscal offence covered under this law, he claimed, nevertheless NAB has over-stretched this law.
It was not the concerned bank that had alerted NAB upon receiving this extraordinary remittance but the State Bank of Pakistan whose inspector during the course of the audit of the relevant bank had called for an inquiry, said the said senior official who had then approached the top management of the bank as a senator.
The Federal Board of Revenue had also audited our accounts of the years during which remittances were received and found everything according to the rules, he said but did not mention that FBR is bound by the law not to question the source of remittances.