What is cybercrime?

Cybercrime is criminal activity that either targets or uses a computer, a computer

network or a networked device.

Most, but not all, cybercrime is committed by cybercriminals or hackers who want to
make money. Cybercrime is carried out by individuals or organizations.

Some cybercriminals are organized, use advanced techniques and are highly
technically skilled. Others are novice hackers.

Rarely, cybercrime aims to damage computers for reasons other than profit. These
could be political or personal.

Cybercrime that stops users using a machine or network, or prevents a business

providing a software service to its customers, is called a Denial-of-Service (DoS) attack.

Cybercrime that uses computers to commit other crimes may involve using computers

or networks to spread malware, illegal information or illegal images.

Sometimes cybercriminals conduct both categories of cybercrime at once. They may

target computers with viruses first. Then, use them to spread malware to other
machines or throughout a network.

Cybercriminals may also carry out what is known as a Distributed-Denial-of-Service

(DDos) attack. This is similar to a DoS attack but cybercriminals use numerous
compromised computers to carry it out.

The US Department of Justice recognizes a third category of cybercrime which is where

a computer is used as an accessory to crime. An example of this is using a computer to
store stolen data.

cybercrime   

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Cybercrime is any criminal activity that involves a computer, networked device

or a network. While most cybercrimes are carried out in order to generate
profit for the cybercriminals, some cybercrimes are carried out against
computers or devices directly to damage or disable them, while others use
computers or networks to spread malware, illegal information, images or other
materials. Some cybercrimes do both -- i.e., target computers to infect them
with a computer virus, which is then spread to other machines and,
sometimes, entire networks.

A primary effect of cybercrime is financial; cybercrime can include many

different types of profit-driven criminal activity, including ransomware attacks,
email and internet fraud, and identity fraud, as well as attempts to steal
financial account, credit card or other payment card information.
Cybercriminals may also target an individual's private information, as well as
corporate data for theft and resale.

Defining cybercrime
The U.S. Department of Justice (DOJ) divides cybercrime into three
categories:

1. crimes in which the computing device is the target -- for example, to

gain network access;

2. crimes in which the computer is used as a weapon -- for example, to

launch a denial-of-service (DoS) attack; and

3. crimes in which the computer is used as an accessory to a crime -- for

example, using a computer to store illegally obtained data.

The Council of Europe Convention on Cybercrime, to which the United States

is a signatory, defines cybercrime as a wide range of malicious activities,
including the illegal interception of data, system interferences that
compromise network integrity and availability, and copyrightinfringements.

How cybercrime works

Cybercrime attacks can begin wherever there is digital data, opportunity and
motive. Cybercriminals include everyone from the lone user engaged in
cyberbullying to state-sponsored actors, like China's intelligence services.
Cybercrimes generally do not occur in a vacuum; they are, in many ways,
distributed in nature. That is, cybercriminals typically rely on other actors to
complete the crime, whether it's the creator of malware using the dark webto
sell code, the distributor of illegal pharmaceuticals
using cryptocurrency brokers to hold virtual money in escrow or state threat
actors relying on technology subcontractors to steal intellectual property (IP).

Cybercriminals use various attack vectors to carry out their cyberattacks and
are constantly seeking new methods and techniques for achieving their goals,
while avoiding detection and arrest.

Cybercriminals often carry out their activities using malware and other types of
software, but social engineering is often an important component for executing
most types of cybercrime. Phishing emails are another important component
to many types of cybercrime but especially so for targeted attacks, like
business email compromise (BEC), in which the attacker attempts to
impersonate, via email, a business owner in order to convince employees to
pay out bogus invoices.

Common examples of
cybercrime
Malware
Computer viruses are the granddaddy of cybercrime; probably the first kind of
it you became aware of. Viruses infect computer systems, destroying files,
messing with the overall functionality, and self-replicating to jump to other
devices and systems. Viruses are actually a form of malware, which
encompasses all kinds of malicious software: any code or programs written
and distributed to do damage, steal data, make money for their owner, and
generally ruin your day. This includes ransomware, which can lock up your
files until you pay a ransom to decrypt them, and adware, which spams you
with ads.
Identity theft and other fraud
While identity theft is not exclusively a cybercrime, these days it’s much more
likely to happen through technology. In fact, identity fraud happens every two
seconds in America today. If a hacker wants to commit identity theft or credit
card fraud, they first need to access enough of their victim’s personal data to
fuel the crime. Here are several ways they can get that access:
 Phishing: Cybercrooks use “bait” in the form of fraudulent messages to
lure victims to fake sites where they unwittingly enter personal
information like usernames, passwords, or bank details.
 Pharming: Taking it one step deeper than phishing, pharming uses
malware to reroute unsuspecting internet surfers to fake versions of
websites, where they unknowingly enter their personal details.
 Keylogging: This type of malware (or to be more specific, spyware)
secretly logs everything you type, capturing your account information and
other personal details.
 Sniffing: If you’re connected to an unsecured, unencrypted public Wi-Fi
network, hackers can steal your data by “sniffing” your internet traffic with
special tools (unless you have a VPN, of course).
While hackers have many ways to steal personal data, there are also some
good ways you can prevent identity theft. Avoid accessing your personal
accounts (especially online banking) on public Wi-Fi, and consider setting up
a monitoring service to make sure your online accounts haven’t been
breached.
Cyberbullying
Cyberbullying refers to all kinds of online harassment, including stalking,
sexual harassment, doxxing (exposing someone’s personal information, like
their physical address, online without their consent), and fraping(breaking into
someone’s social media and making fake posts on their behalf).
Cryptojacking
Cryptojacking is when hackers break into your device and use it to mine
cryptocurrency without your knowledge or consent. Cryptominers do this by
using JavaScript to infect your device after you visit an infected website. This
can cause performance issues and high electric bills for you — and earn big
profits for the cryptojackers. 
Cyberextortion
Cyberextortion is just what it sounds like — a digital version of the nightmare
that is extortion. One of the most common forms is ransomware, when
hackers infect your computer with malware that encrypts all your files until you
pay them a ransom to unlock them. Cyberextortion can also refer to
blackmailing victims using their personal info, photos, and video; or
threatening businesses using methods like botnet-driven DDoS attacks. 
Cyberespionage
As mentioned, many cybercriminals these days are actually state-sponsored
groups. Whether it’s the North Koreans, the Iranians, or even the US’s own
NSA-affiliated Equation Group, world powers use hacker groups as one
weapon in the complicated matrix of global politics. Stealing classified
intelligence and using malware to attack nuclear plants are just two ways in
which state-sponsored groups can do some frightening things on the world
stage.
No matter the type of cybercrime, you can help protect yourself by installing a
strong antivirus program like Avast Free Antivirus. Avast will block malicious
links, suspicious websites, harmful downloads, and various other threats.
Cybercriminals don’t like to work too hard — if they can’t access your machine
or personal data, they’re likely to move on to the next (easier) victim. So give
yourself a strong layer of defense and fight back against cybercrooks.

How to protect yourself against cybercrime

Anyone using the internet should exercise some basic precautions. Here are 11 tips you
can use to help protect yourself against the range of cybercrimes out there.
1. Use a full-service internet security suite
For instance, Norton Security provides real-time protection against existing and
emerging malware including ransomware and viruses, and helps protect your private
and financial information when you go online.
2. Use strong passwords
Don’t repeat your passwords on different sites, and change your passwords regularly.
Make them complex. That means using a combination of at least 10 letters, numbers,
and symbols. A password management application can help you to keep your
passwords locked down.
3. Keep your software updated
This is especially important with your operating systems and internet security software.
Cybercriminals frequently use known exploits, or flaws, in your software to gain access
to your system. Patching those exploits and flaws can make it less likely that you’ll
become a cybercrime target.
4. Manage your social media settings
Keep your personal and private information locked down. Social
engineering cybercriminals can often get your personal information with just a few data
points, so the less you share publicly, the better. For instance, if you post your pet’s
name or reveal your mother’s maiden name, you might expose the answers to two
common security questions.
5. Strengthen your home network
It’s a good idea to start with a strong encryption password as well as a virtual private
network. A VPN will encrypt all traffic leaving your devices until it arrives at its
destination. If cybercriminals do manage to hack your communication line, they won’t
intercept anything but encrypted data. It’s a good idea to use a VPN whenever you a
public Wi-Fi network, whether it’s in a library, café, hotel, or airport.
6. Talk to your children about the internet
You can teach your kids about acceptable use of the internet without shutting down
communication channels. Make sure they know that they can come to you if they’re
experiencing any kind of online harassment, stalking, or bullying.
7. Keep up to date on major security breaches
If you do business with a merchant or have an account on a website that’s been
impacted by a security breach, find out what information the hackers accessed and
change your password immediately.
8. Take measures to help protect yourself against identity theft
Identity theft occurs when someone wrongfully obtains your personal data in a way that
involves fraud or deception, typically for economic gain. How? You might be tricked into
giving personal information over the internet, for instance, or a thief might steal your
mail to access account information. That’s why it’s important to guard your personal
data. A VPN — short for virtual private network — can also help to protect the data you
send and receive online, especially when accessing the internet on public Wi-Fi.
9. Know that identity theft can happen anywhere
It’s smart to know how to protect your identity even when traveling. There are a lot of
things you can do to help keep criminals from getting your private information on the
road. These include keeping your travel plans off social media and being using a VPN
when accessing the internet over your hotel’s Wi-Fi network.
10. Keep an eye on the kids
Just like you’ll want to talk to your kids about the internet, you’ll also want to help protect
them against identity theft. Identity thieves often target children because their Social
Security number and credit histories frequently represent a clean slate. You can help
guard against identity theft by being careful when sharing your child’s personal
information. It’s also smart to know what to look for that might suggest your child’s
identity has been compromised.
11. Know what to do if you become a victim
If you believe that you’ve become a victim of a cybercrime, you need to alert the local
police and, in some cases, the FBI and the Federal Trade Commission. This is
important even if the crime seems minor. Your report may assist authorities in their
investigations or may help to thwart criminals from taking advantage of other people in
the future. If you think cybercriminals have stolen your identity. These are among the
steps you should consider.

 Contact the companies and banks where you know fraud occurred.
 Place fraud alerts and get your credit reports.
 Report identity theft to the FTC.

With that in mind, here is our Top 10 list of steps you can take to avoid becoming a victim of cybercrime.

1) Education - Hackers aren’t the only ones who can gain power from information. By educating

yourself about the types of scams that exist on the Internet and how to avert them, you are putting

yourself one step ahead of the cybercriminals.

Since phishing is prevalent, read up on the latest phishing scams and learn how to recognize a

phishing attempt. Remember, phishing is when hackers attempt to lure you into revealing personal

information by pretending to be a legitimate organization or person. These scams often play off major

new stories, so keep informed on the latest news-related scams.

2) Use a firewall - Firewalls monitor traffic between your computer or network and the Internet and

serve as a great first line of defense when it comes to keeping intruders out. Make sure to use the

firewall that comes with your security software. And if you have a home wireless network, enable the

firewall that comes with your router.

3) Click with caution - When you’re checking your email or chatting over instant messenger (IM), be

careful not to click on any links in messages from people you don’t know. The link could take you to a

fake website that asks for your private information, such as user names and passwords, or it could

download malware onto your computer. Even if the message is from someone you know, be cautious.
Some viruses replicate and spread through email, so look for information that indicates that the

message is legitimate.

4) Practice safe surfing - When navigating the web, you need to take precautions to avoid phony

websites that ask for your personal information and pages that contain malware. Use a search engine

to help you navigate to the correct web address since it will correct misspellings. That way, you won’t

wind up on a fake page at a commonly misspelled address. (Creating a phony site at an address

similar to the real site is called “typosquatting,” and it is a fairly common scam.)

You may also want to use a product like McAfee®

SiteAdvisor®

software to help you navigate.

SiteAdvisor software is a free browser tool that tells you if a site is safe or not right in your search

results, so you are warned before you click.

5) Practice safe shopping - In addition to practicing safe surfing, you also need to be careful where

you shop online. Be cautious when shopping at a site that you’ve never visited before and do a little

investigation before you enter your payment information. Look for a trustmark, such as McAfee

SECURE™, to tell you if a site is safe.

And when you’re on a payment page, look for the lock symbol in your browser, indicating that the site

uses encryption, or scrambling, to keep your information safe. Click on the icon to make sure that the

security certificate pertains to the site you are on.

You also want to look at the address bar to see if the site starts with “https://” instead of “http://”

because this is another way to see if the site uses encryption.

When it comes time to pay, use a credit card instead of a debit card. If the site turns out to be

fraudulent your credit card issuer may reimburse you for the charges, but with a debit card your

money is gone.

Finally, evaluate the site’s security and privacy policies in regards to your personal data.
6) Use comprehensive security software and keep your system updated - Because hackers have a

wide variety of ways to access your system and information, you need comprehensive security

software that can protect you from all angles. Software like McAfee® SecurityCenter, available
preloaded

on Dell™ PCs, can help protect you from malware, phishing, spyware, and other common and

emerging threats.

Just make sure that you keep your security software up to date by selecting the automatic update

function on your security control panel. And don’t forget to perform regular scans.

You also want to update your operating system (OS) and browser with the latest security patches. If

you are a Microsoft Windows user, you can enable automatic updates to keep your OS safe.

7) Secure your wireless network - Hackers can access data while it’s in transit on an unsecured

wireless network. You can keep the hackers out by enabling the firewall on your router and changing

the router’s administrator password. Cybercriminals often know the default passwords and they can

use them to hack into your network.

You may also want to set up your router so it only allows access to people with passwords that are

encrypted. Check your owner’s manual for instructions on setting up encryption.

8) Use strong passwords - Although it may be easier for you to remember short passwords that

reference your birthday, middle name, or pet’s name, these kinds of passwords also make it easy for

hackers. Strong passwords can go a long way in helping secure your information, so choose a

password that is at least 10 characters long and consists of a combination of letters, numbers and

special characters. Also consider changing your password periodically to reduce the likelihood of it

being compromised.

9) Use common sense - Despite the warnings, cybercrime is increasing, fueled by common mistakes

people make such as responding to spam and downloading attachments from people they don’t

know. So, use common sense whenever you’re on the Internet. Never post personal information

online or share sensitive information such as your social security number and credit card number.
Exercise caution when clicking on any links or downloading any programs.

10) Be suspicious - Even if you consider yourself cyber savvy, you still need to keep your guard up for

any new tricks and be proactive about your safety. Backup your data regularly in case anything goes

wrong, and monitor your accounts and credit reports to make sure that a hacker has not stolen your

information or identity.

What is Money Laundering?

Money laundering is the illegal process of making large amounts of money
generated by a criminal activity, such as drug trafficking or terrorist funding,
appear to have come from a legitimate source. The money from the criminal
activity is considered dirty, and the process "launders" it to make it look clean.

Money laundering is a serious financial crime that is employed by white collar

and street-level criminals alike.1 Most financial companies have anti-money-
laundering (AML) policies in place to detect and prevent this activity.

Introduction to money-laundering
Money is the prime reason for engaging in almost any type of criminal activity.
Money-laundering is the method by which criminals disguise the illegal origins of
their wealth and protect their asset bases, so as to avoid the suspicion of law
enforcement agencies and prevent leaving a trail of incriminating evidence.
Terrorists and terrorist organizations also rely on money to sustain themselves
and to carry out terrorist acts. Money for terrorists is derived from a wide variety
of sources. While terrorists are not greatly concerned with disguising the origin of
money, they are concerned with concealing its destination and the purpose for
which it has been collected. Terrorists and terrorist organizations therefore
employ techniques similar to those used by money launderers to hide their
money.
The ability to prevent and detect money-laundering is a highly effective means of
identifying criminals and terrorists and the underlying activity from which money
is derived. The application of intelligence and investigative techniques can be
one way of detecting and disrupting the activities of terrorists and terrorist
organizations.
Because they deal with other people's money, financial institutions rely on a
reputation for probity and integrity. A financial institution found to have assisted in
laundering money will be shunned by legitimate enterprises. An international
financial centre that is used for money-laundering can become an ideal financial
haven. Developing countries that attract "dirty money" as a short-term engine of
growth can find it difficult, as a consequence, to attract the kind of solid long-term
foreign direct investment that is based on stable conditions and good
governance, and that can help them sustain development and promote long-term
growth. Money-laundering can erode a nation's economy by changing the
demand for cash, making interest and exchange rates more volatile, and by
causing high inflation in countries where criminals are doing business.
Most disturbing of all, money-laundering fuels corruption and organized crime.
Corrupt public officials need to be able to launder bribes, kick-backs, public funds
and, on occasion, even development loans from international financial
institutions. Organized criminal groups need to be able to launder the proceeds
of drug trafficking and commodity smuggling. Terrorist groups use money-
laundering channels to get cash to buy arms. The social consequences of
allowing these groups to launder money can be disastrous. Taking the proceeds
of crimes from corrupt public officials, traffickers and organized crime groups is
one of the best ways to stop criminals in their tracks.
In recent years, the international community has become more aware of the
dangers that money-laundering poses in all these areas and many Governments
and jurisdictions have committed themselves to taking action. The United Nations
and other international organizations are committed to helping them in any way
they can.
Criminals are now taking advantage of the globalization of the world economy by
transferring funds quickly across international borders.
INTRODUCTION
Money laundering is a fast-growing crime in the modern world and also a mammoth threat
to the economics of the developing countries. In simple terms, money laundering can be defined
as such a method whereby illegal funds are transferred from one place to another, in order to
cover its tracks.  The Financial Action Task Force (‘FATF’)  identifies it as the processing of
criminal proceeds to disguise their illegal origin.  Money laundering is stated to cause severe
harm to a country’s economy, along with impacting individuals from around the world.  It is
further reported that the total amount of money being laundered in the entire world is between
US$500 billion and US$1 trillion.  There are three steps involved in this illegal process –
placement, layering, and integration. Firstly, the illegitimate funds are secretly introduced into
the legitimate financial system. Then, the money is moved around to create confusion,
sometimes by wiring or transferring through numerous fake accounts. Finally, it is integrated
into the financial system through additional transactions, until the laundered money appears
clean.
Globally, the drive against money laundering started in the 1970s, when the Bank Secrecy
Act 1970 was passed in the United States. In the case of Pakistan, the situation is different and
the anti-money laundering measures were introduced in the 2000s. Several steps have been made
in an attempt to control money laundering. Nevertheless, money laundering is rampant in the
country and this can be attributed to the weak enforcement of laws and loopholes in the current
regime.
In June 2018, Pakistan was included in the ‘grey list’ issued by the FATF, which can have a
detrimental impact on the Pakistani market. Currency dealers are of the opinion that banks would
be the first to suffer by this.  Although, there are no penalties that are included by being in the
‘grey list’, it is stated that as a result of this, financial institutions would be reluctant to conduct
business with the Pakistani institutions.  This, in turn, would impact trade and further increase
Pakistan’s current account deficit.  Businesses are also severely affected by money laundering as
it deters investors. Furthermore, it is also stated that international banks can pull their business
out of Pakistan as a result of the inclusion in the ‘grey list’.

What is money laundering?

Money laundering is the process of illegal movement of money to hide its original
source. Black money gained through illicit activities (drug selling, human trafficking,
terrorism, etc.) is transferred in a certain pattern to manipulate the authorities and to
hide the money trail. Money laundering is also called a whitecollar crime as often
high-rank officials and PEPs (Politically Exposed People) are involved in it. The
Motive of money laundering is to wash black money in a seamless manner gradually
mixing it with white money. 

Banks, financial institutions, fintech companies, stock exchanges, gaming platforms,

real-estate, etc. are used to launder money, but it is only possible if the businesses in
these industries are lacking on anti-money laundering screening and their AML
compliance programs are not updated with evolving money laundering risks. 

Money laundering is conducted through hundreds of means and methods, but

generally three stages are involved in a money-laundering activity. Three layers of
money laundering are placement, layering, and integration. Placement is the initial
step where black money is placed in banks. In layering several financial transactions
are made through the sale and purchase of financial and non-financial assets to
manipulate the original place of money. Lastly, illegal money is integrated into white
money through legal channels, which shows it either as the profit of a shell company
or gain from the sale of assets.

INTERNATIONAL RANKING OF PAKISTAN

There are various reports of different international bodies with regards to the rampant
increase in money laundering. Almost all the reports and indexes mentioned by the international
organizations rank Pakistan as one of the worst countries which has a poor Anti-Money
Laundering/Combating Financing of Terrorism (AML/CFT) strategy. Furthermore, the reports
also state that Pakistan has an inadequate implementation of relevant rules and regulations
governing the system for fighting money laundering.
The main worldwide body dealing with AML/CFT is the FATF. The apex body of this
organization namely FATF Plenary ranked the lists of jurisdictions by the level of AML/CFT
risk. There are two main lists maintained by FATF commonly known as a ‘black list’ and a ‘grey
list’. The term ‘grey list’ is used for the jurisdiction with strategic AML/CFT deficiency by
virtue of which the countries framed an action plan with the FATF. The term ‘black list’ is used
for the jurisdictions with strategic AML/CFT deficiencies to which a call for action applies.
Pakistan was included in the ‘grey list’ of the FATF in 2012 and after three years of its inclusion
was removed in 2015. It has now again been included in the ‘grey list’ of FATF since June
2018.  
A Swiss Group, Basel Institute on Governance issues Anti-Money Laundering Index, since
2012. This index remains the only index issued by an independent, non-profit organization. As
per its report of 2017, Pakistan ranked worst 46th country among 146 countries on money
laundering.  
The Global Financial Integrity is a United States think-tank, which is a research and
advisory organization in nature, and provides worldwide analysis of illicit financial flows.
According to its report, hundreds of billions of United States Dollars (US$) are misplaced
worldwide on an annual basis due to money laundering. These international reports not only rank
Pakistan as one of the worst countries with respect to money laundering but also highlight the
main flaws of the system which inter alia include the faulty laws, heavy flaws in whole formal
and informal economic system, parallel informal economy, poor implementation of the laws,
weak enforcement, and lack of proper planning and formulation of timely strategies.
NATIONAL CONTEXT
In Pakistan, money laundering was first discussed as an offence under the Anti-Terrorism
Act 1997 (‘ATA’).  This Act is concerned with combating terrorism and terrorist financing
through freezing, seizure, and forfeiture of such assets that are derived from these activities.
Similarly, certain anti-money laundering measures were also introduced in the Control of
Narcotics Substances Act 1997. These included freezing and forfeiture of acquired and possessed
assets derived from narcotic drugs and psychotropic substances.
In order to curb money laundering, the regulatory authorities of Pakistan also introduced
anti-money laundering measures in the shape of regulations. In 2003, the State Bank of Pakistan
(‘SBP’) which is the regulator of monetary and credit system in Pakistan, issued its Prudential
Regulations M1 to M5 to safeguard the banks/financial institutions from the threat of money
laundering. These regulations were updated in 2016.  In 2002, the regulator of the corporate
sector and capital market, the Securities and Exchange Commission of Pakistan (‘SECP’) also
issued various anti-money laundering measures to all non-bank financial institutions, in order to
combat the money laundering practices in the corporate sector.
Being a member of the Asia/Pacific Group on Money Laundering (‘APG’) since May 2000,
it was mandatory for Pakistan to frame an anti-money laundering legislation based on
international standards.  The first specific law in this regard was the Anti-Money Laundering
Ordinance (‘AMLO’) promulgated in 2007, which suffered from various flaws. The scope of the
AMLO was limited to account transactions and suspicious transaction reports (‘STRs’) were
restricted to only banking accounts. The offence of money laundering was made non-cognizable
and a small number of predicate offences were included in the schedule of the AMLO. 
The AMLO was reframed via the Anti-Money Laundering Act 2010 (‘AMLA’) and various
changes were incorporated in it, including a well-built preamble and a thorough definition of
money laundering.  The feature of combating terrorist financing is also included in the preamble.
In addition to this, details have been provided for the attachment and forfeiture of properties,
either obtained from proceeds of crime or involved in money laundering.  The Act also provides
a definition, albeit a broad one, as to what constitutes as a financing institution.  Despite these
several changes in the AMLA, the Act is laced with several loopholes and errors that need to be
addressed.
One problem which supplicates money laundering in the country is the existence of hundi
and hawala businesses. Due to the operation of such businesses, it is still relatively easy to
transfer illegal money out of the country. In addition to this, fake accounts throughout the
country increase the crime of money laundering. Due to several loopholes in the current regime,
these illegal businesses still continue to exist. 
On the other hand, one of the main problems identified by the FATF was the proper
identification of terrorist financing and application of stringent sanctions in the identified cases. 
In addition to this, Pakistan has to show that its agencies are successfully prosecuting
organizations which have been identified in connection to terrorist financing. A time of six
months has been given to Pakistan to demonstrate its implementation of the 27 point action plan
given by the FATF.
INVESTIGATING AND PROSECUTING AGENCIES
 Initially, three agencies, the National Accountability Bureau (‘NAB’), the Federal
Investigation Agency (‘FIA’), and the Anti-Narcotics Force (‘ANF’) were empowered to
investigate and prosecute revenant parties under section 2 (j) of the AMLA. Afterwards, the
Directorate General (Intelligence and Investigation Inland Revenue) Federal Board of Revenue
(‘FBR’) was also included as one well via a notification by Ministry of Finance and Revenue
dated 24 August 2010. 
The National Accountability Bureau, set up under the NAO, exercises jurisdiction all over
Pakistan, both at the federal and provincial level.  However, one blatant flaw is that the Bureau
has no power to investigate and prosecute cases concerning terrorist financing and this is because
the schedule of the Ordinance fails to include it as an offence.
There are three main aims of the AMLA, provided in the introduction – prevention of
money laundering, fighting terrorist financing, and forfeiture of the assets derived from such
activities. The offences enlisted in the schedule of the AMLA also include offences enlisted
under the ATA. However, NAB being an investigating and prosecuting agency has no authority
to investigate and prosecute terrorist financing.
The second agency declared as investigating and prosecuting agency under the AMLA is the
FIA. As per the preamble of the FIA Act 1974, the scope of the FIA is only limited to the
investigation of various crimes committed in connection with the matters related to the Federal
Government. Thus, the FIA cannot operate at the provincial level and cannot deal with the
offences committed solely by private persons. This is problematic as it hinders cooperation
between the investigating agencies due to conflicting jurisdictions.
The ATA is available in the schedule of the FIA Act 1974, but the federal agency can only
deal with those terrorist financing cases which have an inter-provincial scope or are assigned by
the Federal Government. This results in another impediment simply because the FIA has not
been empowered enough to take necessary action. Such a contradiction should have been
addressed before the FIA was made an investigating and prosecuting agency.
The ANF is another investigating and prosecuting agency for enforcement of the AMLA.
However, the preamble of the Control of Narcotics Substances Act 1997, is confined to
controlling narcotic drugs, psychotropic items, and their allied matters, therefore its entire role is
regarding the control of narcotics. Its inclusion as an investigation agency is, therefore, pointless.
Another enforcement agency that is responsible for dealing with money laundering is
Directorate General (Intelligence & Investigation Inland Revenue) FBR. This agency has the
power to investigate and prosecute the cases under the AMLA wherever earnings of crimes are
accumulated under the offences committed under the Customs Act 1969.
One of the main issues that is affecting the practical implementation of the AMLA is the
absence of a Joint Task Force. It further raises concerns regarding the approach the legislature
has adopted in dealing with money laundering. The main problem is that all of the four agencies
are working in their own sphere resulting in a complete lack of cooperation. This leads to a
failure in curbing the offences of money laundering and terrorist financing. It is, therefore,
recommended that, one specialized agency instead of four separate ones may serve better or a
Joint Task Force of these agencies can also produce improved results.
FATF has formulated a wide range of recommendations for fighting the money laundering
and terrorist financing. The guidelines of FATF are considered binding upon its member
countries. Recommendation 27 urges member countries to empower and facilitate investigating
authorities in combating money laundering as well as terrorist financing. 
In contrast to the situation in Pakistan, in other countries, especially in the regional ones,
there is only one specialized investigating and prosecuting agency empowered to conduct an
investigation in matters of money laundering. In India, there is one specialized financial
investigation agency named as the Directorate of Enforcement under the Department of
Revenue, Ministry of Finance, Government of India. This agency is mandated for the application
of two laws: Foreign Exchange Management Act 1999 and the Prevention of Money Laundering
Act 2002 (‘PMLA’). Moreover, the Financial Intelligence Unit (‘FIU’) in India is also working
under the Department of Revenue, Ministry of Finance. In the United Kingdom, the National
Crime Agency, as an initiative to tackle money laundering crime, established the Joint Money
Laundering Intelligence Taskforce, with help of the financial sector.  This task force developed a
partnership with different stakeholders including Government, British Bankers Association, Law
Enforcement Agencies, and major banks of the U.K. In its operations, all the relevant
stakeholders are included, e.g., NCA, Her Majesty’s Revenue and Customs, concerned local
police, and financial institutions.
Although the four designated investigating and prosecuting agencies are working in their
respective ambit under the AMLA, each agency is confined within a narrow scope of
jurisdiction. By following the international standards set by other countries, it can be stated that
the formation of a Joint Task Force or one specialized agency is indeed required in order to
tackle these offences more effectively. This task force should consist of different stakeholders
and regulatory authorities i.e., customs, FIU, investigating agency, or police is also helpful for
fighting these crimes, as all are intrinsically linked to each other.
PREDICATE OFFENCES
As per its section 2 (s) the offences enlisted in the schedule of the AMLA are called
predicate offences. At present, there are 98 sections of Pakistan Penal Code 1860 (‘PPC’) and 19
special laws that are considered as predicate offences under the AMLA. These offences,
however, fall short of covering all the necessary offences. An example can be taken from the
categories enlisted by the FATF under which a range of predicate offences can be covered.  As
per the first recommendation of the FATF, it is advised that the member countries should include
a comprehensive list of predicate offences in their anti-money laundering statutes.  Some FATF
approved predicate offences, i.e., piracy and sexual exploitation, including sexual exploitation of
children, are not covered in the schedule of the AMLA.
India, on the other hand, covers a wider range of predicate offences as compared to
Pakistan; there are 27 special laws in the schedule of the PMLA. Under the schedule of the
PMLA, only 60 sections of Indian Penal Code 1860 (‘IPC’) are mandated.
The comparison of money laundering laws of Pakistan and India depicts many notable
concerns. India has far better domestic laws in many areas than Pakistan. These include sexual
exploitation, including those of children, environmental offences, and piracy laws. Moreover,
these laws in India were passed long before those enacted in Pakistan. The predicate offences
specified in the schedule of the AMLA are less in number as compared to India, have a limited
scope, and are not up to the international standards set by the FATF.
OFFENCE OF MONEY LAUNDERING
Section 4 of the AMLA provides punishment for money laundering offence as a rigorous
imprisonment from one to ten years. Moreover, section 21 (a) of the AMLA states that each
crime punished under it shall be non-cognizable. In a cognizable offence, the police or the
designated officer of the investigating agency has the authority to arrest the accused without
having obtained a warrant or permission of the court. Cognizable offences are serious and
heinous in nature and have minimum punishment of three years. Non-cognizable offences, on the
other hand, are not serious and heinous in nature as compared to cognizable offences and have
maximum punishment up to less than three years.
This drawback of the AMLA has serious consequences. It renders the alleged offence of
money laundering as a lenient one and the accused is given a benefit in this case. The
investigating officer cannot arrest a culprit without the permission of the court. In Pakistan, the
minimum punishment for the offence of money laundering is one year. However, in India, as per
section 4 of the PMLA, the penalty for money laundering entails a rigorous imprisonment for a
term not less than three years and up to seven years. In Bangladesh, the punishment provided for
money laundering crime in section 4 of the Money Laundering Prevention Act 2012 (‘MLPA
2012’) is a sentence of four to twelve years of rigorous imprisonment. In Sri Lanka, the
punishment of money laundering is a rigorous imprisonment from five to twenty years, as
established under section 3 (1) (b) of the Prevention of Money Laundering Act 2006 (‘PMLA
2006’).
The global standards set by the international community concerning the curbing of money
laundering are also converse to the AMLA. The first two recommendations by the FATF deal
with the extent of money laundering crime. These suggestions urge member countries to
criminalize money laundering crime according to the international guidelines discussed in the
various instruments of the United Nations.
 If the aim is to achieve international standards, it may be safe to state that the nature and
punishment of money laundering provided in the AMLA is not at par with the required global
standards. Worldwide, the offences of money laundering and its underlying offences i.e.,
predicate offences, are considered as serious offences. However, in Pakistan, the predicate
offence under the AMLA have stricter punishments than that of the offence of money
laundering. In this sense, this crime is not considered as a serious offence as its punishment is not
as severe as other offences. The threshold of punishment provided for serious and cognizable
offences in Pakistan does not even match with the serious offence of money laundering under the
AMLA.
There is also another way of analyzing the entire situation. Financial, corporate, and fiscal
offences in Pakistan include fraud, embezzlement, counterfeiting currency, illegal forex
businesses, etc. These offences are dealt with by the relevant provisions of Pakistan Penal Code
1860. The punishments of above offences provided in these criminal instruments are although
different yet quite similar in magnitude. The punishment of imprisonment of the money
laundering offence under the AMLA is relatively lesser than the punishments provided for the
serious financial, corporate, and fiscal offences under the relevant special laws of Pakistan. Most
of these offences are cognizable in nature, which shows that their prevention is considered more
gravely by increasing the magnitude and length of rigorous imprisonment for such offences.
However, this has not been done in case of the AMLA, which not only halted the prevention of
money laundering crime but also jeopardized enforcing this enactment as there are no powers of
the investigating officers to arrest due to the offence being a non-cognizable one. Due to this
defect, the feature of the AMLA that an offender can be punished in two offences, i.e., in money
laundering as well as in predicate offence, bears minimal effect.   
MANAGEMENT OF FORFEITED PROPERTIES
As per the AMLA, the Federal Government is responsible for appointing an administrator
for receiving and managing the confiscated property. According to section 11 of the AMLA, the
administrator also ensures the disposal of such property. Although some procedure is provided in
section 11 of the AMLA for managing the forfeited properties but in practical terms, there is no
central authority designated for the same. Due to this, the investigating and prosecuting agencies
working under their respective jurisdiction have to deal and manage the forfeited properties in
accordance with the law. This lacuna not only creates ambiguity but also raises a question with
regards to the enforcement of the AMLA. The relevant recommendation of the FATF urges the
establishment of a central authority to initiate speedy action with response to the joint legal
requests of the other countries.
In India, section 10 of the PMLA relates to managing the properties confiscated in money
laundering offence. It provides for the appointment of a designated administrator for receiving,
managing, and disposing of the confiscated property. Specific rules are also framed under the
authority of the PMLA. In these rules, a mechanism is provided for maintaining the confiscated
property. The administrator is designated for arranging and maintaining the property including
cash as well as other items. There is also implementation of these provisions in India and the
administrators are appointed accordingly.
In view of international standards as well as in comparison to India, the functioning of the
investigating and prosecuting agencies in Pakistan is deeply impacted in the absence of a central
authority for management of properties confiscated under the AMLA. Such a flaw also portrays
the lack of implementation of the enacted law and framed rules.  
LACK OF JURISDICTION OF BANKING COURT
There are many banking offences enlisted as predicate offences in the schedule of the
AMLA. However, money laundering itself is not declared a scheduled offence in the schedule of
Offences in respect of Banks (Special Courts) Ordinance 1984. Due to this reason, special
banking courts cannot take cognizance of anti-money laundering cases. This serious impediment
prevents the AMLA from achieving its basic purpose. Section 20 of the AMLA provides for the
jurisdiction of the court and declares the Sessions Court as the competent court to have the
authority with regards to cases under the AMLA. However, the scope of other court in which
banking predicate offences are to be tried, is ousted.
The Offences in Respect of Banks (Special Courts) Ordinance 1984 provides for the
establishment of special courts dealing with banking offences. In respect of scheduled offences
to be tried by the special banking court, the Offences in Respect of Banks (Special Courts)
Ordinance 1984 provide that the scheduled offences must exclusively be tried through a special
court. Section 2 (d) of the Offences in Respect of Banks (Special Courts) Ordinance 1984 defines
the scheduled offence as specified in its first schedule. However, the AMLA is not specified as a
scheduled offence in the first schedule of the Offences of the Respect of Banks (Special Courts)
Ordinance 1984, therefore, banking courts have no jurisdiction in the AMLA cases.
On the other hand, under the PMLA in India, the special courts are constituted for
prosecuting a money laundering offence. Section 43 of the PMLA constitutes courts of sessions
as special courts for this offence.
The comparison shows that under the AMLA even though the designated sessions court
exercises jurisdiction over money laundering crime as well as predicate offences thereto, but the
banking court constituted under the Offences in Respect of Banks (Special Courts) Ordinance
1984 has no jurisdiction. This imperfection and legal lacuna so created has, nevertheless, badly
affected the anti-money laundering drive in Pakistan.
AGREEMENTS WITH FOREIGN COUNTRIES
There are various ways for gathering of information in criminal investigations. The Interpol,
world’s largest international police organization, is a source of informal cooperation between the
police of one country with the police of another country primarily to follow the suspect. Formal
mechanisms of cooperation include the Mutual Legal Assistance Treaty (MLAT). These treaties
are beneficial for the exchange of information between two or more countries pertaining to
criminal investigations.  Another formal system of cooperation is extradition, which again
requires a reciprocal agreement between the two countries. The objective once again is to follow
and apprehend the suspect or the accused.
Although a framework for international cooperation is provided within the AMLA, the
ground realities portray quite a deplorable condition. Various sections of the AMLA deal with
international cooperation, such as agreements on a mutual basis, asking for help from a
contracting state, mutual shifting of accused persons, and other forms of cooperation. However,
in reality, there is no separate domestic legislation relating to Mutual Legal Assistance in
Pakistan and no MLAT with regards to anti-money laundering provisions with any country of the
world till date. In such a scenario, cases are likely to suffer as no evidence in the shape of
proceeds of crime or stolen assets can be collected or recovered from foreign jurisdictions. This
drawback has serious consequences on the investigation of the cases, as it often requires
collection of evidence from foreign countries.
Moreover, the offence of money laundering is not included in the schedule of the
Extradition Act 1972, which means that no accused individual can be surrendered from abroad to
Pakistan under this Act. The schedule attached to the Extradition Act 1972 provides placement
of twenty-four serious and heinous offences with the exception of the offence of money
laundering, an offence which is recognized as serious and heinous offence worldwide. 
The Financial Monitoring Unit (FMU) of the State Bank of Pakistan does not have
membership in the Egmont Group of Financial Intelligence Units (FIUs).  This group is an
informal network of the FIUs of member countries. The intelligence information in shape of
STRs or unusual financial activity gathered by these FIUs is shared with the member countries
whenever required by them. Globally and regionally as well, the FIUs of almost all important
countries are the members of this group, including, India, Bangladesh, Sri Lanka, Nepal, and
even the ongoing war-effected country Afghanistan. Due to lack of sharing of financial
intelligence of STRs among members, FIUs in Egmont Group, proceeds of crime, financial trail,
and uncovered assets in money laundering cannot be traced out by the investigating and
prosecuting agencies of Pakistan.
Pakistan is also not a member of the Harare Scheme concerning the Mutual Legal
Assistance relating to Criminal Matters among Commonwealth countries. This scheme provides
a productive as well as practical approach to joint collaboration in Commonwealth states to the
widest possible extent. This drawback adds further obscurity to the anti-money laundering drive
of Pakistan.  
International standards set to fight money laundering mainly focus on cooperation between
countries through MLTAs. The relevant recommendations of the forty recommendations of the
FATF exclusively deal with the need for international cooperation to combat the offence of
money laundering.
In the absence of international cooperation in practical terms, both formal and informal,
Pakistan’s role in fighting the money laundering menace is seriously hindered. Lack of MLTA’s
with other countries and the absence of a domestic law on mutual legal assistance negatively
affects Pakistan’s standing in the international community when it comes to curbing money
laundering.
CONFLICT WITH OTHER LAWS
The AMLA is a special Act which has an overriding effect over any conflicting law.  Even
though this Act has an overruling effect, it is also inconsistent with many other special laws,
which also happen to have a superseding effect. These special laws are not repealed and are still
intact.
The Protection of Economic Reforms Act 1992 (‘PERA’) is creating a hefty impediment for
the AMLA. The objective of the AMLA to prevent money laundering is clearly defeated with the
existing provisions of the PERA contained in sections 4, 5, and 9 of the PERA. Section 4 of this
Act authorizes the citizens of Pakistan with regards to the free flow of foreign currency. Hence,
this section left it free for all Pakistani citizens and non-nationals to move and pull out foreign
exchange inside or outside Pakistan in whatever form, without making a foreign currency
declaration. Section 5 provides immunities in shape of exemption from any inquiry, levy of
taxes, restrictions to foreign currency accounts to foreign currency accounts holders besides a
guarantee for its complete secrecy. Section 9 of the PERA ensures the secrecy of banking
transactions which is a legal obstruction for controlling money laundering.
The Foreign Currency Accounts (Protection) Ordinance 2001 also safeguards the foreign
currency accounts holders in shape of transferring foreign currency freely in or outside Pakistan,
thereby opening a clear channel for money laundering. Section 3 of this Ordinance specifies the
protection of foreign currency accounts and a safeguard is provided to the foreign currency
accounts holders to pull out the foreign currency inside or outside the country, thereby promoting
money laundering. This Ordinance is opening a channel which is quite a smooth one for money
laundering crimes. It has also made it clear in its section 5 that the protection given to the foreign
money account owners is in addition to that provided under the PERA.
Another law working against the AMLA is the Income Tax Ordinance 2001 (‘ITO’).
Section 111 (4) of ITO allows the inward flow of any suspicious money to the country. This
provision of the ITO paves the way for money launderers to bring any amount of their
unexplained assets or income, in shape of foreign exchange forwarded from an outside country
via the usual banking channels.          
These protective laws, i.e., the PERA, the Foreign Currency Accounts (Protection)
Ordinance 2001 and the ITO are promoting money laundering in the country. In the presence of
these protective laws, the AMLA actually becomes ineffective. Not only these laws stand on
equal footings with the AMLA, but they also seriously jeopardize the scope and extent of the
Act. These hefty impeding laws are consequently serving for the promotion, support, and
manifold increase of money laundering in the country. The measures provided under these
ambiguous laws were actually meant to boost the economy but in practical terms, they provided
an open back door channel for money laundering. 
PREAMBLE: COMBATING TERRORIST FINANCING
Nine special recommendations of the FATF deal with the measures prescribed for
combating terrorist financing. Recommendation II deals with criminalizing the terrorist financing
and associated money laundering and holds that the member countries should criminalize the
offences concerned with terrorism, such as terrorist financing, terrorist acts, as well as terrorist
organizations.  
Pakistan has criminalized terrorist financing, radical activities, as well as terrorist
organizations under the ATA, nevertheless, the AMLA simultaneously also aims to combat
terrorist financing. The AMLA has three main objects, which includes, fighting financing of
terrorism. However, this core purpose is defeated when the ATA is applied by investigating and
prosecuting agencies. This is because it is still the main law specifically dealing with terrorism.
Though the investigating and prosecuting agency (only FIA according to its jurisdiction) can use
both of these enactments for investigating money laundering and terrorist financing cases, this
aspect illustrates that in practical terms, the AMLA has no concern with fighting the terrorist
financing. The measures provided in the AMLA to fight the terrorist financing are covered in
sections 5, 6, and 7.
Comparably, the money laundering statutes of other countries only provide for the
prevention of money laundering and there is no mention of the feature of curbing terrorist
financing. For example, the PMLA in India is only concerned with the prevention of money
laundering in the country. This purpose-oriented approach leads to this Act being exclusive one
dealing with the prevention of money laundering. Furthermore, in Bangladesh the preamble of
the MLPA 2012 stresses on the prevention of money laundering and the same is mentioned
under the PMLA 2006 of Sri Lanka.
Through measures are provided in the AMLA to fight the terrorist financing but it has no
role in investigating and prosecuting the offence. Therefore, although the feature of combating
the terrorist financing of the AMLA enriched in its preamble, some of its sections bear no fruit in
terms of its enforcement.
Based on the analysis and findings in this legislative review, there are some
recommendations for improvement. It is proposed that the law has to be amended in such a way
that renders it effective in preventing money laundering, and this includes implementation of the
measures recommended by the FATF. The predicate offences in the schedule of the AMLA
should be brought at par with the international standards. The punishment of money laundering
in the AMLA should be increased to a minimum of three years long with making the offence
cognizable.
For the effective enforcement of the AMLA, the investigating and prosecuting agencies
should be given a complete mandate or for complete smooth running, there should be one
specialized financial investigation agency. The MLATs should be made with other countries, in
addition to seeking membership of FMU of SBP in Egmont Group of FIUs. Furthermore,
domestic law on the MLA should be framed and the laws which are in conflict with the AMLA
should be repealed/amended.
Lastly, the procedural flaws in the AMLA that exist to the extent of lack of jurisdiction of
banking courts and the operation of the AMLA to combat terrorist financing should be rectified
immediately and a central authority should be established for the management of the forfeited
properties under the AMLA.
The State Bank of Pakistan (SBP) has in the past issued detailed AML/CFT regulations,
as well as guidelines on a risk-based approach in 2012. The SBP is the regulator for
AML controls for banking and related services while the Securities and Exchange
Commission (SECP) is the regulator for all other entities. Other regulatory authorities
include the National Accountability Bureau (NAB), the Anti Narcotics Force (ANF), the
Federal Investigative Agency (FIA), and the Customs Authorities oversee Pakistan’s
AML law enforcement efforts.

The major laws in these areas include:

 The Anti-Terrorism Act of 2002, which defines the crimes of terrorist finance and
money laundering and establishes jurisdictions and punishments (amended in
October 2004 to increase maximum punishments).
 The National Accountability Ordinance of 1999, which requires financial
institutions to report suspicious transactions to the NAB and establishes
accountability courts.
 The Control of Narcotic Substances Act of 1997, which also requires the
reporting of suspicious transactions to the ANF, contains provisions for the freezing
and seizing of assets associated with narcotics trafficking, and establishes special
courts for offenses (including financing) involving illegal narcotics.
All these laws include provisions to allow investigators to access financial records and
conduct financial investigations.

In 2007, Pakistan enacted the AML Ordinance, establishing regulations for AML and
combating the financing of terrorism and criminalizing money laundering. Under the
Ordinance, the Financial Monitoring Unit (FMU) is created. The FMU serves as Pakistan's
FIU and is in charge of handling Suspicious Transaction Reports (STRs). In 2010, the
SBP passed the Anti-Money Laundering Act, replacing the 2007 AML Ordinance.
The FMU works with several Pakistani law enforcement agencies that are responsible for
enforcing financial crime laws, including the National Accountability Bureau (NAB), the
Anti-Narcotics Force (ANF), the Directorate of Customs Intelligence and Investigations
(CII), and the Federal Investigative Agency (FIA).

The FIA deals with crimes relating to money laundering, terrorism, human smuggling
and trafficking, and cybercrime, among others.

The State Bank of Pakistan (SBP) and the Securities and Exchange Commission of
Pakistan (SECP) are the primary financial regulators. Notwithstanding the absence of
standalone AML legislation, the SBP and SECP have independently established AML
units to enhance their oversight of the financial sector. The SBP has introduced
regulations intended to be consistent with the Financial Action Task Force’s (FATF)
recommendations in the areas of a Know Your Customer (KYC) policy, record retention,
due diligence of correspondent banks, and the reporting of suspicious transactions.

stages of Money Laundering: Money laundering can easily be understand through its three main stages
i.e. placement, layering and integration, description of which are here as under.

1. Placement: in this stage the illegitimate money generated from some illegal source i.e. drug
trafficking, illegal activities, human trafficking etc, the money launderer then break this illegal funds into
small cash and then enter into the financial intermediaries, trade economy or Physical smuggling by
means of depositing money in the bank through opening fake accounts, investment in term certificates,
money order, checks or other monetary instruments. The main purpose is to conceal the original
identity of the money from where it is being generated.

2. Layering: The 2nd stage comes after the placement stage; when money launderer succeeded in
placing the illegitimate money into the financial sector then money launderer create the layer after layer
over these funds by means of moving this money from one channel to another through transferring
from one account to another or one financial intermediary to another. The subject funds are also
channelized to purchase and sale of government securities or for the payments of goods and services.

3. Integrating: The third stage after successfully completion of the 2nd stage, money launderer used
these funds to re-enter into the economy in any legitimate source either to invest in public development
projects, luxury assets, or any business ventures. It may also involve in the following activities.  Lend
the proceeds back to the launderer as a loan  Repay the proceeds back to the launderer as payments
for goods supplied or services rendered.  Place funds as collection with bankers in different countries
and then obtaining loans.  Over / under invoices foreign trade transactions

RECOMMENDATIONS On the basis of our previous discussion relating to the Pakistani banking and
financial sector including the non bank financial sector and development financial institutes, few of

recommendations are here as under relating to the anti money laundering and terrorist financing. Also
some recommendations for the government to made his effort to remove the name of Pakistan from
the black listed countries which is being included by world governing body FATF (Financial action task
force) in the month of February 2010 due to non compliance.  Monitoring of Free Trade Zones 
Developing one account opening form for customer to stock broker  Centralized reporting system from
all Banks  One regulatory authority for all Banks, Non Banks & DFI’s  Monitoring of auditors, lawyers &
legal advisors  Mandatory anti money laundering training for banks employees including international
training and seminars.  Decision making should be decentralized instead of one man show in financial
institutions.  Employees and officers of the financial institution should be legally protected.

Monitoring of Free Trade Zones:

Currently in Pakistan four free trade zones are in operations (i.e. Karachi, Risalpur, Sialkot and Saindak),
the main purpose of these free trade zones is to promote more exports with tax benefits and less
stringent policies of the government over these export zones. All the bank’s branches are working in
these zones and they allowed huge amount of financing to the customers operating and also accepting
the deposits but the SBP prudential regulations in these free trade zones are still not implemented and
no proper guidelines being provided to the banking channels who are working in these trade zones,
banks are showing their assets or liabilities from these zones in offshore banking. Money launderer used
these sorts of places for the purpose of whitening their money previously generated from the
illegitimate sources due to weak policies and no special transaction monitoring from the state bank of
Pakistan and banks itself. Banks and especially state bank should regulate the free trade zones to
strengthen the policies and strict monitoring and implementations of the policies against money
laundering and terrorist financing, these sorts of early measures will help the government and
regulatory authorities to remove the name of Pakistan from the black listed countries list or to take
precautionary measures for the banking sector from any future losses.

Developing one account opening form: Currently the brokerage houses and stock exchanges all

over the country were monitored by the SECP (security and exchange commission of Pakistan)

and the two local governing bodies i.e. (SECP and SBP) are in touch and they keep exchanging

their views and regulations pertaining to the money laundering and terrorist financing.

A comprehensive one account opening from is required for all brokers of stock exchanges,

modarba companies, exchange companies, customer’s who opened an account for deposit

purpose at any bank and all other non bank financial corporations.

The main idea behind the one comprehensive account form is to better focused on the KYC

“Know Your Customer” and also better monitoring from the side of the two regulatory

authorities, because it is easy to understand the one format with comprehensive details which

save the time and also its easy to gather the information in one format for all. If the same

customer is open the account at any bank for the purpose of depositing the money and the same
is pursuing for opening the account at CDC (Central depository company) the two organization

is being monitored by the two different regulatory authorities it is easier or better for the both to

verify the credential of the same customer at both end due to the same unique account opening

form, which will help to minimize the chances of money laundering and properly reported to the

higher authorities if any found guilty with this crime.

Centralized reporting system from all Financial Institutions: Currently all banks are liable to

report their exposures both funded and non funded as well as the reporting to those customers

they defaulted in payment of any facility amount granted to them by the banks, it will help the

other institutions to asses the financial history of the company before granting them further.

The main theme for this recommendation is to gather all the information from all the financial

institutions including (Modarba Companies, Insurance companies, NBFI’s, banks, DFI’s) at one

place to monitor the each and every activity of the person or any company for better monitoring

of the financial transactions and gathering of record at one place.

If the transactions or all the financial activities being monitored at one place it is difficult to the

person or the company to get involved in any money laundering activity or any terrorist

financing activity, it will also help the regulatory authority to closed monitor the suspicious

transactions found if any.

One regulatory authority for all Banks, Non Banks & DFI’s: Currently State Bank of

Pakistan is monitoring the banks and DFI’s and SECP monitors the non banking financial sectors

including the stock exchanges. The regulations in both the areas were different from each other

and less closely monitored.

All the financial institution or the non bank financial sector should be regulated under one

umbrella so the one regulation is applied to the all and effective monitoring for all the sectors, it

is also helpful for the regulators to gather the information pertaining to the money laundering and

terrorist financing if conducted by any person or company.

Monitoring of accountants & legal advisors: There should be a regulatory authority in order

to regulate the lawyers, consultants & accountants (individual / firm) who can impose penalties

as well as ban of services, it is in general practice that lawyers suggest different ways of money

laundering to their clients like fake property documents, fake property dealings, tax evasion etc.

On the other hand accountants also take part to strengthen the money laundering by means of

making the fake financials (balance sheets. Profit loss account, cash flow accounts & change of

equity) for the purpose of using the same to avail the credit facilities from the different financial

intermediaries to convert their black money generated through illegitimate sources into the white

money. If these services is monitored it will help to reduce the chances of money laundering /

terrorist financing in the financial sector.

Mandatory anti money laundering training from banks: Training is a tool which enhanced

the capabilities of the individual to monitor & highlight the main stream issues like money

laundering & terrorist financing. State Bank of Pakistan and SECP should regulate and penalize

the financial institutions as well as Non Bank Financial institutions incase of non compliance, in

addition to this SBP & SECP should also take initiatives to arrange the international trainings

and seminars for the designated compliance head / officers for better understanding of the rules

and regulations implemented and monitored globally.

Decision making should be decentralized instead of one man show in financial institutions.

In Pakistan another problem faced by financial institutions is some of the banks are not completely
decentralized in decision making. Powers given to different committees for decision making is like a
window dressing and committees are not functioning as per requirement and influence by the owner of
the bank. On the other hand departments like compliance, audit and internal control are functional just
for fulfilling the requirement of SBP and fully dominant by centralized decision making. Such committees
and departments are not working in true letter and spirit. The aim of such institutions is just is to earn
profits by either way. Regulatory authorities should focus on this issue and should take necessary steps
in order to avoid such practices and encourage the completely management based institution with the
power to take decisions and should follow the policies and regulation instead of one man show
institution.

Employees should be legally protected:

Regulatory bodies like SBP or SECP should frame a law approved by relevant authorities protecting
employees and officers of FI’s and NBFI’s. This step will encourage the employees to report, highlight
and stop the unlawful transactions without any hurdle which should automatically reduces the risk of
money laundering and terrorist financing.

White-Collar Crime
What Is White-Collar Crime?
White-collar crime is a nonviolent crime committed for financial gain. According to
the FBI, a key agency that investigates these offenses, "these crimes are
characterized by deceit, concealment, or violation of trust." The motivation for
these crimes is to obtain or avoid losing money, property, or services, or to
secure a personal or business advantage.

Examples of white-collar crimes include securities fraud, embezzlement,

corporate fraud, and money laundering. In addition to the FBI, entities that
investigate white-collar crime include the Securities and Exchange Commission
(SEC), the National Association of Securities Dealers (NASD), and state
authorities.

“Reportedly coined in 1939, the term white-collar crime is now synonymous with
the full range of frauds committed by business and government professionals.
These crimes are characterized by deceit, concealment, or violation of trust and
are not dependent on the application or threat of physical force or violence. The
motivation behind these crimes is financial—to obtain or avoid losing money,
property, or services or to secure a personal or business advantage.”
In criminology, white collar offenses differ from blue collar crimes in that blue-collar crime is
any crime committed by an individual from a lower social class. White-collar crime, on the
other hand, is associated with crime committed by someone of a higher-level social class.
Blue collar crimes are often considered more obvious and easily detected by law
enforcement.

Types of White Collar Crimes

White collar crimes also tend to involve sophisticated methods to accomplish the crimes.
White collar crimes may involve counterfeit currency, complex accounting practices that are
implemented to cause embezzlement, identity theft based on phishing and other crimes that
require the use of technology, expertise or inside information. There are a wide variety of
white collar crimes, including the following: 
Fraud
Sometimes, not-so-virtuous business people fraud their clients by misrepresenting facts through
words and actions for financial gain. The deceit is intentional and meant to cause the victim to take
action upon the facts. The action usually results in a financial injury.
There are certain elements that must be present in a fraud case:

 A false statement of material fact occurred

 The defendant was aware that the statements made were false
 The defendant meant to make the false statements
 The victim relied on the statements to be true
 The victim lost something as a result of the false statements

It is important to understand that not every false statement of fact can be considered a fraudulent
act. The statement must be considered a material fact, or a statement that is of such significance
that the fact or facts alone were used by the victim to make an important decision.

Fraud
Fraud is one of the most common types of white collar crimes. Fraud cases often involve
the perpetrator imitating someone else in order to take funds out of the real owner’s bank
account. Fraud may help a perpetrator commit identity theft.

Bribery
Another common form of a white collar crime is bribery. In bribery cases, the perpetrator
pays someone in a power position in order to make arrangements that financially benefit the
perpetrator or others. For example, a perpetrator may pay a government official. It is often
hard for federal regulators to prove and prosecute. 

Insider Trading
Another common white collar crime is that of insider trading. Insider trading involves people
using connections that they have on the inside to buy or sell stock before the relevant
information is made public. For example, someone who knows that a company may be
facing a lawsuit or a layoff may decide to sell stock before the information is released in
order to sell at a higher rate. Conversely, a person may wait to buy until the bad news hits in
order to purchase at a lower price. In contrast to some other white collar crimes, regulators
have become increasingly savvy ate detecting certain trades that seemed to be based on
tipped off information. It may be difficult for a person to hold onto stock knowing that this
may ultimately mean losing money when they have confidential information. 

Cyber Crime
Due to the internet, an increasing cause of white collar crimes is due to cyber crime. This
type of crime involves collecting credit card numbers and personal identifying information
through the use of computers. Some nations even use sophisticated attacks in order to
discover classified information that other countries are attempting to hide. Some individuals
or nations may make viruses that infect vulnerable computers and send spam or perform
other tasks that may help generate funds. 

Embezzlement
Embezzlement is the misappropriation of the property of another by a person
who has lawful possession of the property. One of the most common forms of
embezzlement is employee theft. To establish a case for embezzlement, the
prosecution must typically show that there was a fiduciary relationship
between the defendant and the party who lost the property; the property came
into the defendant’s possession through that fiduciary relationship; the
defendant fraudulently assumed ownership of the property; and the defendant
intentionally misappropriated the property. The penalty for embezzlement is
generally determined by the value of the property that is misappropriated.
Tax evasion
Tax evasion (26 U.S.C. § 7201. Attempt to evade or defeat tax) is one of the
more common types of tax crimes. Essentially, tax evasion is the intentional
and illegal avoidance of paying mandatory taxes to the government.
There are several different types of tax evasion. First, individuals can evade
income taxes by failing to file a tax return or making false statements, such as
fake deductions or not reporting income on a return or writing off personal
expenses as business expenses so that they do not have to pay taxes on
them. Another form of tax evasion is an abusive trust scheme, which is a
scheme in which one purports to transfer money into another’s possession,
but actually does not do so. The “transfer” cancels the taxes on the
individual’s income. A third type of tax evasion is when businesses misstate
income or expenses. This can be done in several ways. First, with respect to
payroll, employers may keep tax withholdings for themselves and pay
employees in cash or file false payroll tax returns. Next, it is possible for retail
stores to find ways to avoid sales tax, such as failing to report sales tax
reimbursement collected from customers.
Money laundering
MINIMIZING RADICALIZATION

Promoting a rule of law and human rights-based approach to PVE

There is a need to respond to the imminent threat that violent extremism poses and to reassure fearful
populations. The heightened terrorist alerts many countries currently operate under are a reaction to
these security challenges. It is likely that the future in many societies will be one of more robust security
systems to prevent possible terrorist attacks. But the manner in which security institutions respond to
potential threats could lead to the stigmatization of certain groups and could thus become a driver in
the radicalization process. UNDP’s global initiative will therefore include as one of its pillars for
preventing violent extremism, measures to increase the capacity of the justice and security sectors, not
only to detect and prevent violent activities, but also to ensure that the proper judicial process and the
legal and human rights of those being prosecuted are followed and respected. This also includes
ensuring well-capacitated staff to run prison facilities and to offer rehabilitation and re-integration
support for inmates in general, and in particular the ones convicted of violent extremism. These
initiatives will ensure that prisons become centers for deradicalization rather than a source of
recruitment for violent extremists. This also means working with national human rights institutions to
ensure that the delivery of justice, security and surveillance is done with respect for human rights and
the rule of law.

Enhancing the fight against corruption

An increased focus on fighting corruption helps to enhance the legitimacy of state institutions and
directly contributes to reducing perceptions of injustice and inequality. Countries or local communities
that make a solid effort to reduce the petty and grand corruption that fuel people’s perceptions of
injustice provide a visible sign that the causes of inequality and unequal opportunities are being
addressed. UNDP has long experience in building capacities of anti-corruption institutions, fostering
capacities of civil society to monitor transparency and accountability in government and in assessing
corruption risks in specific sectors and at the local community level.

Creating effective socio-economic alternatives to violence for groups at risk

UNDP’s initiative will focus on improving the livelihoods of groups at risk (youth in particular), meaning
improving their skills and education levels and ensuring better access to jobs and upward mobility. The
combination of these is important as supply-side vocational training projects that are not linked to
meaningful employment in the marketplace risk raising expectations that cannot be satisfied, hence
possibly aggravating perceptions of unfairness and discrimination. Special attention will need to be paid
to adolescent girls to reduce their vulnerability to trafficking and gender-based violence.

Enhancing participatory decision-making and increasing civic space

Economic empowerment through the creation of jobs and livelihoods is not sufficient. It is equally
important to ensure that disenfranchised men and women - young people in particular - are provided
with the space and platforms for civic engagement and participation in decision-making. UNDP’s
integrated approach to support inclusive political processes works with women and men of all ages to
strengthen civil society capacities and expand and protect spaces for citizen participation in public life,
with a special focus on groups experiencing discrimination and marginalization. Regular engagement
with political leaders and decisionmakers in particular at the local level can yield important peace- and
social-cohesion dividends. Creating opportunities for men and women to organize, culturally, politically,
or for sports, also helps in managing frustrations. Genuine participation in, or access to, decision-making
generates a strong sense of inclusion and tolerance, and hence decreases alienation. Legislatures can
support the adoption of laws that protect fundamental freedoms, and that entrench and strengthen
human-rights protections, minority-rights guarantees and gender equality. They can exercise caution in
the passage of anti-terrorism legislation that could violate human rights and freedoms. Both legislation
and budget allocations can help to address the problem of exclusion. Legislators can also champion
national consensus-building around common values. Parliamentary oversight of the executive’s use of
power can enhance public confidence in the integrity of the executive’s activities and make the public
more willing to accept the legitimacy of decisions taken to address violent extremism. UNDP’s global
initiative will therefore include measures to increase the capacity of legislatures and political actors to
prevent violent activities.

Strengthening local government capacities for service delivery and security

Limited state capacity particularly manifests itself at the subnational level where people have the most
direct contact with state institutions, and where the lack of services and security becomes most
apparent. Improving the quality of services and of engagement between authorities and people
enhances public trust and state legitimacy that are at the root of just and peaceful societies. UNDP
support focuses on strengthening the capacities of local institutions, local economic actors, and
communities to develop and pursue the realization of local development outcomes that are relevant to
local needs and aspirations. By grounding development choices in the needs of the people – particularly
the poor, marginalized and traditionally excluded groups - and fostering transparency, accountability,
participation and ownership, local governments become forefront players in combating exclusion and
reverse long-held perceptions of economic and social injustice.

Supporting credible intermediaries to promote dialogue and re-integration

The more a society provides opportunities for dialogue, and for different groups to develop mutual
understanding with one another, the greater the chance that trust, tolerance and respect for diversity
will flourish. But many authorities today, in particular in urban communities, claim they no longer feel
the pulse of their communities and lack the capacity for outreach and communication with those
inclined to join the ranks of violent extremists. Conversely, many disaffected and alienated persons
complain that they are no longer understood, respected, or accepted by their families, community, or
state authority structures. This is partly due to the profound gaps in intergenerational communication
generated by modern technology and culture. Approaches centered on an active listening of their
concerns, on inclusive dialogue, and on fostering active and open participation in public processes, can
have a transformative impact. But critical changes in political and social attitudes and behaviors cannot
be manipulated from the outside. They have to emerge from the organic conditions of a society. This
requires trusted and credible “insider mediators” able to engage relevant political, social, and civic
leaderships, build dialogue across lines of tension, and convene and facilitate critical conversations.
These mediators – traditional or religious leaders (women or men), civic activists, artists, teachers,
media anchors etc. with legitimacy to mediate – can play an important early warning role, identifying
potential signs of radicalization or recruitment by extremists. The spread of ideologies that preach
intolerance for divergent opinions or lifestyles as well as increased gender-based violence are key
precursors of extremism spreading into the mainstream. Building on a recently released Guidance Note
on support for “insider mediation,” prepared jointly with the European Union, UNDP will work with
partners to develop in-depth guidance on identifying and working with credible intermediaries in
situations characterized by the risk of violent extremism.

Promoting gender equality and women’s empowerment

The systematic discrimination and abuse of women is a strategic and deliberate tactic of a number of
violent extremist groups. As the Special Representative of the UN Secretary-General on Sexual Violence
in Conflict has written, “extremist groups like ISIL and Boko Haram view female bodies as vessels for
producing a new generation that can be raised in their own image, according to their radical
ideology.”42 Even before violent extremism has taken root, key indicators of the spread of extremist
ideologies include increased discrimination against women and girls. That is why advocating for and
reinforcing the equal rights of women and girls and ensuring that gender equality laws and policies are
put in place and enforced, are important building blocks of an action plan to prevent violent extremism.
In many parts of sub-Saharan Africa, South East Asia and the Middle East, women have been at the
forefront of efforts to counter the political, social and cultural factors that enable violent extremism.
Women are among the most powerful voices of prevention – in their homes, schools and communities -
and women’s organizations and movements have played a significant role in advocating for inclusion
and tolerance. Women’s organizations also provide alternative social, educational and economic
activities for at-risk young women and men. Hence they can uniquely help build the social cohesion
needed to resist the appeal of a violent extremist group. Most of the current counter-violent extremist
programs however focus only on men. Women are also absent from the decision-making processes on
how to address violent extremism.43 A closer understanding of the roles women play in relation to
violence and conflict is critical to the development of tailored strategies to strengthen resilience against
violent extremism and to support victims and survivors. This not only requires reaching out to natural
allies such as human-rights organizations, educational institutions and policy-makers already engaged in
preventing violent extremism, but also calls for engaging with religious leaders, the media, community
leaders, women’s organizations, security forces and the private sector to promote values in compliance
with international human rights standards and norms. Investing in women’s economic autonomy is also
critical in preventing violent extremism as women’s economic status builds their own resilience, as well
as that of their families, against joining extremist groups.

Engaging youth in building social cohesion

 More than half of the world’s population is under the age of 30, and while most youth are peaceful,
they nevertheless form the backbone of the world’s paramilitary and terrorist groups.44 Violent
extremism is thus disproportionally impacting young people, as they more easily get lured into radical
thinking. The vulnerability of youth seems to be increasing as families lose control over the education
and lifestyle of their children, in particular because young people increasingly move to urban areas in
search of jobs. When societies fail to integrate youth in meaningful ways, young people are more likely
to engage in political violence. Young people however do play an important positive role. Youth are
already transforming their communities, countering violence and building peace. Yet their efforts remain
largely invisible due to lack of adequate mechanisms for participation, and lack of opportunities to
partner with decision-making bodies. UNDP’s work on youth therefore supports young men and women
and their organizations as leaders and peacebuilders, as promoters of social cohesion in their
communities and as actors for early warning and re-integration.

Working with the media to promote human rights and tolerance

To counter the narrative of radical groups to convince people to join their ranks, a communications
strategy needs to be proactive, not only reactive to the seductive language used by extremists.47 UNDP
will work with select partners to develop an online interactive platform for those advocating creative
approaches to enhance inclusion, promotion of human rights, social cohesion and tolerance, gender
equality and women’s empowerment; and to reach out to and engage in dialogue with disaffected
groups and individuals. The voices of women, youth, and religious leaders as well as victims, survivors
and returnees are important in this approach. A communications tool-kit, including a guide for the use
of social media, will be developed for use by development partners, governments, media and civic
organizations in reaching out to and engaging with those susceptible to violent extremism. UNDP will
partner with global and regional media to create messages of tolerance and respect for diversity and
gender equality that can be launched on national and local TV, in schools, universities, sports clubs, and
religious and community centers to discourage people from joining radical groups or to encourage them
to disengage from these groups. The usefulness of “social marketing” approaches and “strategic
communications” will also be examined to see how peaceful activism and mobilization might be
promoted as a viable alternative leading to individual and collective empowerment.

2019 Terrorist Incidents:  Pakistan experienced numerous terrorist attacks in 2019.  The

following examples include some of the more destructive and high-profile attacks and
demonstrate a variety of methods, targets, and perpetrators:

 On May 8, a suicide bomber killed at least 10 (including police officers and security guards)
and wounded at least 24 others in an attack at Lahore’s Data Darbar Sufi shrine. Hizbul Ahrar, a
faction of TTP, claimed responsibility for the attack, specifying that the target was law enforcement
officers and not civilians.
 On May 11, three militants killed five (including a Pakistani Navy officer) and injured six in
an attack on the Pearl Continental Hotel in Gwadar. The Balochistan Liberation Army claimed
responsibility for the attack, stating the targets were Chinese and other foreign investors.
CONTROLLING TERRORISM

Legislation, Law Enforcement, and Border Security:  The Pakistani government continued to

implement the Antiterrorism Act of 1997, the National Counterterrorism Authority (NACTA)
Act, the 2014 Investigation for Fair Trial Act, and 2014 amendments to the Antiterrorism Act
(ATA), all of which give law enforcement, prosecutors, and courts enhanced powers in
terrorism cases.

Military, paramilitary, and civilian security forces conducted CT operations throughout

Pakistan against anti-state militants.  Pakistani law allows for preventive detention, permits
the death penalty for terrorism offenses, and authorizes special Anti-Terrorism Courts to try
terrorism cases.  Military courts established in 2015 under the National Action Plan to try
civilians accused of terrorism ceased operation March 31.

Pakistan collects biometric information at land crossings through its International Border
Management Security System.  Authorities had limited ability to detect smuggling by air
travel.  The Customs Service attempted to enforce anti-money laundering laws and foreign
exchange regulations at all major airports, in coordination with other agencies.  Customs
managed the entry of dual-use chemicals for legitimate purposes through end-use
verification, while also attempting to prevent their diversion for use in IEDs.  Consistent with
UNSCR 2178, returning FTFs may be prosecuted under Pakistani law.  NACTA is
responsible for compiling and verifying data on these individuals.

Countering the Financing of Terrorism:  Pakistan is a member of the APG.  Since June

2018, FATF has identified Pakistan as a jurisdiction with strategic deficiencies in its CFT
system.  In 2019, Pakistan made some progress toward meeting the action plan
requirements for the FATF, allowing it to avoid being blacklisted, but did not complete all
action plan items.  In early 2019, Pakistan issued, inter alia, a statutory regulatory
ordinance directing immediate implementation of sanctions against individuals and entities
designated under UNSCR 1267.  In October 2019, APG published a Mutual Evaluation
Report that reviewed Pakistan’s compliance with FATF standards and the effectiveness of
Pakistan’s AML/CFT system.
Countering Violent Extremism:  The government operated five de-radicalization camps
offering “corrective religious education,” vocational training, counseling, and therapy.  A
Pakistani NGO administered the juvenile-focused Sabaoon Rehabilitation Center in Swat
Valley, which it founded in partnership with the Pakistani military.

Some madrassas reportedly continued to teach “extremist” doctrine.  The National Action
Plan directs increased government supervision of madrassas, and there was evidence of
continued government efforts to increase regulation.  Security analysts and madrassa
reform proponents observed, however, that many madrassas failed to register with the
government or provide documentation of their sources of funding or to limit their
acceptance of foreign students to those with valid visas, a background check, and the
consent of their governments, as required by law.

The Pakistani cities of Nowshera, Peshawar, and Quetta are members of the SCN.

International and Regional Cooperation:  Pakistan participated in several multilateral fora

where CT cooperation was discussed, including the GCTF, the Heart of Asia-Istanbul
Process, and the ASEAN Regional Forum.  Pakistan has been slated to host the next
summit of the South Asian Association for Regional Cooperation (SAARC) and the first
since 2016, when all other SAARC member states boycotted the planned Islamabad
summit following terrorist attacks on Indian security personnel committed by Pakistani
groups.
Improved Police-Public Relations Improving the police station’s effectiveness in countering terrorism
depends on improving police-community relations at the local level. New SOPs and training programs
must replace the current authoritarian ethos of policing in Pakistan with an approach that engages the
police and the community in a common effort to control terrorist and criminal violence. This approach is
consistent with the one taken by police forces in the United States and westernEurope that emphasizes
basic law enforcement and community outreach. It should be based on SOPs and training programs to
ensure that the police are responsive and treat community members with respect. Improved police-
public relations results in greater public willingness to provide information on illegal activities and
potential security threats. Programs to improve police-public relations start with improving public access
to police stations, including special access for women. Such efforts involve engaging the community in
police work through programs like community watches and creating peace committees to mediate local
disputes and to review and evaluate police performance. Improved public access, special treatment for
women using female police officers, and community outreach programs are features of a few newly
established model police stations in major cities. Many of these stations were modified based on
technical advice and financial assistance from international (including U.S.) donors. The creation of these
stations indicates a willingness on the part of provincial authorities to experiment with reforms. Absent
a determination to invest provincial funding to replicate these innovations across the entire force,
however, these model stations will remain isolated examples of future possibilities.

Intelligence Collection

Despite the increased demand for police services, station house reporting procedures— which are
largely done by hand in large, leather-bound ledgers—have remained unchanged for decades.
Computerized record-keeping and Internet communication between stations and headquarters remain
limited to a handful of model stations in urban centers. Although peace committees that involve
community members in resolving local disputes can be a mechanism for reporting suspicious activity to
the police, only limited efforts have been made to sensitize police at the station house level to look for
indications that terrorist groups might be present and preparing for local operations. There is also no
effective means for higher police authorities to routinely provide terrorist-related information to police
stations in a timely manner, let alone as actionable intelligence for the conduct of counterterrorist
operations. Police stations need a new system for information collection and analysis and new personnel
trained to perform these functions. Historically, police stations had a dedicated cell that conducted
liaison with the village headman and watchman to collect information on local conditions, personalities,
and activities that might pose a security threat. As Pakistan has become more urbanized, these roles
have disappeared. The Police Rules of 1934 created a system of police station record-keeping with
inspections by senior officers that continued until the 1970s. Given the proliferation of demands on the
police and the frequent transfer of key personnel, this system fell into disuse. The 1997 National
Counterterrorism Act provided procedures and authorities for police surveillance of suspected
terrorists.20 The Fair Trial Act of February 2013 broadened those authorities to include wire taps and
other types of electronic eavesdropping.21 These procedures generally are not followed and the
authorities not used, however.22 Police at the station house level are often unaware of the details of
the law, and countering terrorism has not yet been specifically prescribed as part of their duties.

SNAPSHOT
The National Accountability Bureau (NAB) was established on November 16, 1999 by the National
Accountability Ordinance. The NAB is a federal executive agency of the Government of Pakistan,
with the mandate to deal with corruption prevention, raise public awareness, and enforce of anti-
corruption measures. The NAB has its headquarters in the federal capital and has five regional
offices in four provinces. The headquarters office exclusively performs policy and monitoring
functions, while the hardcore work of investigation is carried out in the regional offices. The NAB's
main tasks have been organized along functional lines and are undertaken by four main divisions:
Operations, Prosecution, Awareness and Prevention, and Human Resource and Finance Divisions.

Importance of NAB
NAB is a key national institution if this nation seeks to eliminate corruption in the
gigantic public sector as well as the joint public-private sector-based projects either in
the conception stage or in-process. It is imperative that all other key institutions such
as the State Bank, the FBR, FIA, commercial banks & DFIs, NHA, FWO, and all
others should heed the national interest and co-operate with NAB in identifying and
bringing to justice all emerging and actual sources of corrupt practices and acts of
omission and commission. If citizens wish to be whistle-blowers (regarding corrupt
practices), their testimonies should be entertained.

The National Accountability Bureau arrested Mir Shakil-ur-Rehman,

editor-in-chief of the Jang group, the largest media group in Pakistan,
in Lahore on March 12 on charges relating to a 34-year-old property
transaction. He has remained incarcerated ever since.

In another example of harassment, the NAB court summoned the

former president and opposition leader Asif Ali Zardari to appear in
person to record a statement, denying his request to record a
statement through a video link because of his ill-health and Covid-19.
Zardari previously spent 11 years in prison – more than half in NAB
custody – without a conviction.

In December 2018, Mian Javed Ahmed, an educationist, died in Camp

Jail, Lahore, while facing NAB charges. Dr. Mujahid Kamran, the
former vice-chancellor of the Punjab University, who was arrested by
the NAB on allegations of illegal appointments at the university,
described NAB detention centers as “torture cells.”

Organization[edit]
The bureau has two principal officers: the Chairman; and the Prosecutor General of Accountability in
Pakistan. The Chairman is the head of investigation, and serves a four-year term. Lt-Gen Syed
Mohammad Amjad was the first chairman of the bureau. Justice (R) Javed Iqbal is the present
chairman of NAB. The Prosecutor General is the head of prosecution, and serves a three-year term.
A retired justice Asghar haider is current Prosecutor General of National Accountability Bureau
(Nab).

Performance and notable operations[edit]

Financial recoveries[edit]
Since its formation, the institution has recovered over ₨. 240 Bn (approximately $ 4 Bn) from
corruption committed by country's elite politicians, bureaucrats, former military officers, and those
involved in the white-collar crimes. According to Musharraf the "NAB was created to put the fear of
God in the corrupt, as Pakistan was on the brink of being declared a failed state before I came to
power."
In its research studies published by NAB in 2011, the institution has recovered ₨. 119.5Bn from
bank defaults and provided ₨. 60Bn to restructured the banks.[5] by september 2019 it has also
recovered Rs 71b under the chairmanship of javed iqbal.

Prosecution and investigations[edit]

In 2011, the NAB reported that it has 1791 cases that were under prosecution, out of which, 1093
cases prosecutions were completed.[6]

Infrastructure[edit]
In 2013, NAB inducted a large number of officers and conducted their Investigation Training at
COMSATS University in Islamabad. The officers, after successful completion of the Seven Months
off-job and 2 Months on-job training, were posted to different bureaus within the country. There are
various challenges currently faced by NAB, including a slow judicial process, difficulty in collecting
prosecutable evidence since the majority of country's public record is not electronically archived or
integrated into a central database.
NAB employees are consistently kept up to date with new training programs in financial crimes.

Criticism[edit]
The National Accountability Bureau has been criticized by the Supreme Court for mismanagement.
Justice Jawad S. Khawaja of the Supreme Court criticized the institution for its practice of 'plea
bargain' and described it as 'institutionalized corruption.' Under the said practice the Bureau arrests
suspects and negotiates for an out-of-court settlement under which the suspect is made to sign a
confession and deposit funds of an amount determined by NAB. Justice Khawaja stated during court
proceedings that he believed some NAB officials warn influential suspects before arrest to allow
them sufficient time to escape.[7][8]