Pakistan presents a classic case study of a
‘state within state’ — terrorists and mafias crippling institutions and
over-empowering the masses
Terrorism, arms, drug trades, and money laundering,
intrinsically linked, pose considerable threats to global peace and security
along with destabilising political and financial stability of many nation
states. Pakistan is one of the worst-affected victims of these menaces. The war
against any terrorist network e.g. ISIS, Al Qaeda and the Taliban (enjoying
networking with many outlawed groups having hubs in Afghanistan, Pakistan and
elsewhere) cannot be won unless their financial lifeline is destroyed. These
networks are minting enormous money from voluntary donations to organised
crime.
There are a few questions that irk everybody’s mind.
Where do these terrorists get so much money from? Why are the governments not
serious in cracking down on unlawful transfer of funds? If banking channels
are used, then why cannot be remitters and recipients traced? If hawala and
hundi are used for unlawful transfer of funds, why persons engaged in these
unlawful activities are not arrested and punished? Who all are financing these
terrorist networks? Who all are providing them sophisticated arms and military
training? It is a well-established fact that criminals remit billions of
dollars every year from bank accounts maintained in various countries. The
crackdown on this enormous dirty money is the real issue though it finds less
significance in discussions and strategies to defeat terrorism that is
largely fed by arms and drugs deals.
James Petras, Professor of Sociology, Binghamton
University, New York, in his paper, “Dirty Money” Foundation of US Growth and
Empire makes startling revelations: “There is a consensus among US
Congressional Investigators, former bankers and international banking experts
that US and European banks launder between $500 billion and $1 trillion of
dirty money each year, half of which is laundered by U.S. banks alone”.
These yearly inflows surpass all the net transfers by the major US oil
producers, military industries and aircraft manufacturers. The most recent
estimates (2016) are that 90 offshore jurisdictions around the world licensed
about 11,000 offshore banks that control approximately $155 trillion in assets.
The 2017 International Narcotics Control Strategy
Report (INCSR), annually prepared by the US Department of State, itself admits
that “in April 2016, the ‘Panama Papers’ exposed significant vulnerabilities
related to lack of financial transparency and the use of shell companies to
launder money, commit tax fraud, and evade US sanctions”. Money laundered in
Panama primarily comes from drug trafficking proceeds due to its location along
major trafficking routes. Once the money has been laundered, it can be
recycled into bona fide investments not only in real estate, hotels, etc, but
also in other areas such as the services economy and manufacturing.
Like the US government, our authorities also know that
huge funds are laundered through banks yet they do not take any action.
Professor Petras in Enormous By Any Measure says: “Washington and the mass
media have portrayed the US as being in the forefront of the struggle against
narco trafficking, drug laundering and political corruption: the image is of
clean white hands fighting dirty money. The truth is exactly the opposite”. It
equally applies to our rulers sitting in Islamabad. Case of Pakistan is no
different from Panama or Columbia.
There is sufficient evidence that militant groups
working against the security and stability of Pakistan generate huge funds
through organised criminal activities and also get generous “donations” from
“sympathisers” in and outside Pakistan. In the face of this fact, we have
yet not developed a reporting system to monitor the generation and movement of
such money/funds/assets. On the contrary we have laws that protect transfer
of funds, for example, section 5 and 9 of Protection of Economic Reforms Act,
1992 and section 111(4) of the Income Tax Ordinance, 2001. These provisions
ensure unlimited flow of remittances and dealings in foreign currencies. So
financiers of terrorists are free to use even the banking facilities.
Tomorrow, June 26, will mark the 30th year anniversary of the UN
International Day against Drug Abuse and Illicit Trafficking. According to the
UNODC, nearly 210 million people are using illicit drugs such as cocaine,
cannabis, hallucinogens, opiates and sedative hypnotics worldwide
Drug barons, terrorists and money launderers not only
use hawala and hundi but exploit legal sanction available under section 111(4)
of the Income Tax Ordinance, 2001 which says that if anybody brings money
through normal banking channels, tax authorities cannot pose any question about
the “source.” The banks also take cover under section 5 and section 9 of the
Protection of Economic Reform Act, 1992 to withhold information from tax
authorities.
Besides legal weaknesses pointed out above, during the
last 30 years, NAB, FIA, ANF and FBR have not been able to establish a joint
task force to book and prosecute the men and networks involved in organised
crimes.
Pakistan presents a classic case study of ‘state within
state’ — terrorists and mafias crippling institutions and over-empowering the
masses. Pakistan has suffered a lot and paid a heavy price in men and material
while fighting against terrorism. Determined and practical efforts are needed
to destroy the financial supply lines of organised criminal networks. What
happened to National Action Plan (NAP) and 29 civil-military wings established
in August 2016? These and many other questions need to be answered if we are
really serious in uprooting terrorism, drug trafficking and other crimes.
The writer specialises in studying global
narco-arms economy and its linkages with terrorism. He is author of numerous
articles on these issues, besides author of books, Pakistan: From Hash to
Heroin and its sequel, Pakistan: Drug-trap to Debt-trap
Published in Daily Times, June 25th,
2017.
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