IMF Flags Pakistan’s Weak Anti-Money Laundering Measures, Highlights Gaps in Beneficial Ownership Framework

The International Monetary Fund (IMF) has expressed concern over Pakistan’s inability to effectively control money laundering, pointing to serious flaws in its beneficial ownership framework and weak institutional coordination. The findings are part of the IMF’s Governance and Corruption Diagnostic Assessment Report, expected to be released later this month.

IMF Report on Money Laundering in Pakistan

According to sources, the IMF has already shared a preliminary draft of the report with the Government of Pakistan. The draft highlights critical shortcomings in the country’s regulatory and enforcement systems designed to combat financial crimes. The government is reviewing the recommendations before the final version is published.

Deficiencies in Beneficial Ownership System

One of the IMF’s key concerns is Pakistan’s ineffective implementation of the beneficial ownership framework, which is meant to reveal the real individuals behind companies.

The report notes:

Limited data sharing among institutions.
Inability to prevent the misuse of fake companies in securing government contracts.
Weak oversight of corporate structures, enabling money laundering and corruption.

Weak Institutional Coordination

The IMF criticized poor communication and collaboration between key regulatory and financial institutions, including:

Securities and Exchange Commission of Pakistan (SECP).
State Bank of Pakistan (SBP).
Federal Board of Revenue (FBR).

Additionally, commercial banks and investigative agencies were found to have inadequate cooperation, further undermining the fight against illicit financial flows.

Legislative and Enforcement Gaps

According to the report, Pakistan’s anti-money laundering legislation is poorly enforced, and institutions lack the capacity to fully utilize ownership data in financial investigations. These shortcomings continue to obstruct efforts to track suspicious transactions and prosecute offenders.

IMF Recommendations for Pakistan

To address the systemic weaknesses, the IMF has recommended:

Establishing an institutional working group to improve inter-agency coordination.
Enhancing data-sharing practices across regulatory bodies.
Ensuring effective use of beneficial ownership information in financial investigations.

These reforms, if implemented, could significantly strengthen Pakistan’s ability to detect and prevent money laundering and reduce the misuse of shell companies.

Why This Matters for Pakistan’s Economy

Failure to curb money laundering not only affects Pakistan’s global credibility but also:

Hinders foreign investment.
Increases the risk of financial sanctions.
Complicates compliance with international watchdogs such as the **Financial Action

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