Money laundering and terror financing: issues and challenges in Pakistan

Purpose Pakistan is facing the momentous hazard of money laundering and a substantial risk of terror financing, which are seriously threatening its socioeconomic well-being. The purpose of this paper is to gauge the challenges posed by these threats in contrast with the existing potential and expert...

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Bibliographic Details
Published in:Journal of money laundering control 2022-01, Vol.25 (1), p.181-194
Main Authors: Zia, Munir Ahmad, Abbas, Rana Zamin, Arshed, Noman
Format: Article
Language:English
Subjects:
Banking
Charities
Corruption
Economic reform
Globalization
Law
Money laundering
Regulation of financial institutions
Remittances
September 11 terrorist attacks-2001
Terrorism financing
Transnationalism
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Summary:Purpose Pakistan is facing the momentous hazard of money laundering and a substantial risk of terror financing, which are seriously threatening its socioeconomic well-being. The purpose of this paper is to gauge the challenges posed by these threats in contrast with the existing potential and expertise of legal entities. It also examines legal and procedural measures enforced as a counter-strategy for terror financing and money laundering and the AMLA 2010 and National Action Plan (NAP) for countering terrorism financing. Design/methodology/approach This paper uses an analytical and comparative method using figures and comparative data on the success of the NAP and AMLA 2010 as national counterterrorism strategies. Terror financing and anti-money laundering regimes are confronted with grave legal and procedural odds, noncooperation and performance issues and conflicts of interest on the part of the enforcers/politicians. This paper highlights the issues that seriously jeopardize strategies to stop money laundering and terror financing, such as geography, informal financial transfers and exchange systems, un-regulated charities and real estate sectors, the modest performance of enforcement agencies and lukewarm political support for the NAP. Findings The situation requires the improvement of weak legislation and poor coordination and the adaptation of technological advancements and novel counter-strategies, along with properly trained enforcement personnel. Originality/value This paper will prove to be a valuable reference for exploring the shortcomings and insights. This will provide useful information for legal and financial practitioners, academicians, research scholars, policymakers and journalists.
ISSN:1368-5201
1758-7808
DOI:10.1108/JMLC-11-2020-0126