Financial Crime World

Title: SBP Warns Public Against Illegal Forex Operators in Pakistan: Money Laundering Risks

State Bank of Pakistan Issues Warning

Karachi: The State Bank of Pakistan (SBP), the country’s central banking institution, has issued a stern warning against dealing with illegal foreign exchange operators and transfer of foreign currency through hawala and hundi. 1 The central bank stated that engaging in such activities could expose individuals to money laundering and terrorism financing risks without their knowledge. 2

Risks Associated with Hawala and Hundi

The SBP revealed the risks associated with dealing with illegal forex operators using hawala and hundi, informal channels prevalent in Pakistan. 3 These channels carry the risks of money laundering and financing terrorism activities.

Money Laundering and Terrorist Financing Concerns

The SBP emphasized the seriousness of money laundering and terrorist financing as economic and national security concerns. 4 Individuals dealing with illegal foreign exchange operators and transferring foreign currency through hawala and hundi unknowingly expose themselves to these risks.

Advice for the Public

The central bank advised the public to use only authorized dealers for foreign exchange transactions and avoid suspicious-looking transactions. 5 Those with information on such activities are encouraged to report them to the law enforcement agencies.

Consequences of Dealing with Illegal Forex Operators

Illegal forex operators are not licensed by the SBP or other regulatory authorities. 6 Despite promising higher exchange rates, these operators endanger the financial security of the country by breaking the law.

SBP’s Commitment

The SBP has previously taken enforcement actions against illegal forex operators and encourages public awareness campaigns to combat money laundering and terrorist financing. 7

To make foreign exchange transactions, individuals can use authorized dealers, including commercial banks, money exchange companies, and licensed money changers. 8 Transactions can also be made through legal channels abroad.

Personal Protection and Financial Stability

By adhering to these guidelines and staying informed, individuals can protect themselves and contribute to the overall financial stability and security of Pakistan.

Financial Intelligence Unit and FATF Collaboration

The SBP has established a dedicated Financial Intelligence Unit (FIU) to monitor, investigate, and report suspicious transactions to the Financial Action Task Force (FATF). 9 This partnership aims to prevent monetary crimes and promote transparency.

Conclusion

The State Bank of Pakistan urges the public to avoid dealing with illegal foreign exchange operators and transfer of foreign currency through hawala and hundi. 10 These channels pose significant risks to money laundering and terrorism financing, and the public’s collaboration is essential in combating these criminal activities. 11 By sticking to authorized dealers and reporting suspicious transactions, individuals can contribute to a more secure and stable financial environment for all Pakistanis.

  1. “In a recent statement, the State Bank of Pakistan (SBP) has issued a stern warning to the general public against dealing with illegal foreign exchange operators and transfer of foreign currency through hawala and hundi.” ↩︎

  2. “Dealing with illegal foreign exchange operators and transferring foreign currency through hawala and hundi could expose individuals to these risks without their knowledge.” ↩︎

  3. “Hawala and hundi are informal channels, which, although prevalent in Pakistan, carry the risks of money laundering and financing terrorist activities.” ↩︎

  4. “Money laundering and terrorist financing are serious economic and national security concerns.” ↩︎

  5. “The central bank advised the public to utilize only authorized dealers and to avoid involvement in transactions that appear to be suspicious.” ↩︎

  6. “These individuals might promise higher exchange rates, making their services appealing to many.” ↩︎

  7. “The SBP has previously taken action against illegal forex operators and has warned the public about the risks associated with these transactions.” ↩︎

  8. “Some of the authorized dealers include commercial banks, money exchange companies, and licensed money changers.” ↩︎

  9. “The SBP has established a dedicated Financial Intelligence Unit (FIU) to monitor, investigate, and report suspicious transactions to the Financial Action Task Force (FATF).” ↩︎

  10. “The State Bank of Pakistan urges the public to avoid dealing with illegal foreign exchange operators and transfer of foreign currency through hawala and hundi.” ↩︎

  11. “By sticking to authorized dealers and reporting suspicious transactions, individuals can contribute to a more secure and stable financial environment for all Pakistanis.” ↩︎