Role of companies officer in Money laundering practics in Pakistan

Abstract

This research embodies the subject of “Money Laundering Practices of Companies Officers in Pakistan”. Money laundering, a practice of presenting illegal money as legal, has been acknowledged as a major crime at both, the national as well as international level, but Pakistan is facing it currently at a colossal level. In the light of same scenario, this study elucidates the role of companies’ officers in money laundering practices and methods they opt to launder. It also reviews the role and strategies of institutions to handle money laundering practices, especially with respect to officers of the companies, like Security Exchange Commission and ultimately their affects on national economy as well as international face of Pakistan. This study equally throws light upon existing legislation and other national and international commitments of Pakistan towards uprooting of this evil from pure land. Current study demonstrates that different methods are adopted to convert the black money, obtained through criminal activities and corruption, in to clean and legal money. No matter which method is adopted to launder money, illegitimate earned assets are passed through three stages, namely placement, layering and integration. The key reasons of this atrocious practice include corruption, evasion of tax and terrorist financing that involve the drug trafficker, smugglers and black money owners. These criminal activities and their persistent practice adversely affect the economy of Pakistan. For instance, Illegal transfer of money to other countries results in non-payment or less payment of taxes. It also deprives Pakistan of capital which needs to be invested for the major developments. Nation bears a great loss in the economic structure due to such criminal practices. Besides, terror financing through laundered money puts Pakistan on the risk of loses in international trade and affects the nation reputation in an international arena. Study guides that different regulatory bodies and agencies are working for the eradication of ML practices. In this regard, Pakistan is currently committed to different rules and policies as well as Anti-money Laundering Law. AML 2016 and Companies Act 2017 are also enacted but results are really discouraging. Poor implementation on laws, structural deficiencies and legislative gaps are assisting in the proliferation of this menace across the country. To sum, the study provides a compact reference guide to the financial institutions, Law enforcing agencies (LEAs), and the general public to understand the money laundering, , in general and role of officers of the companies in making this process smooth and possible. Furthermore, current research also provides a clear picture of the shortcomings in the socio-cultural, legal and economic setup of Pakistan which actually halt the process of uprooting this heinous practice from the corporate sector of Pakistan.