In the ongoing battle against financial crimes, Pakistan has been facing a new challenge of trade-based money laundering, which requires the South Asian nation to uphold the Financial Action Task Force (FATF) compliance after removal from its gray list, according to CEO of a global financial solutions provider.
FATF, a global money laundering and financing watchdog, removed Pakistan from its list of countries under “increased monitoring” in October last year. The South Asian nation had been on the “grey list” since 2018 because of its “strategic counter-terrorist financing-related deficiencies”. “FATF requirements are something to be revisited all the time because there is a continuous evaluation in 2025 again, the FATF will come and they have to assess if the banking industry, governance and policies [are] compliant or procedures are adhered to, and if the country is meeting everything that is related to combating financial terrorism,” Hazem Mulhim, Founder and CEO of Dubai-based Eastnets financial solutions provider, told Arab News in an interview on Saturday.
“Now, of course there are challenges. New challenges are related to trade-based money laundering and also one of its (Pakistan) pillars is the trade. Trade-based money laundering is important to combat and this requires lots of applications and systems and policies and lots of work.”
Eastnets, which began its operation from a street shop in Amman, Jordan in the 1980s, has expanded globally over the time and provides secure compliance solutions, combating financial crime, payment fraud, and SWIFT (bank identifier code) solutions. The fintech provides services from its Dubai offices to the Middle East and North Africa (MENA) region and has been serving 30 Pakistani banks since 2000.
Mulhim said the financial industry has to be compliant so they can have security and safety not only of their countries but also of all the other countries globally, and in order to be compliant they have to combat financial terrorism, money laundering and fraud.
“When we look at the number of transactions that take place globally, we are talking about quadrillion dollar every year that is being transferred over the Swift network and with these transfers there are $2 trillion of illicit money that is mainly either by organized crime or for drug dealers and fraudulent activities,” the Eastnets CEO said.
Mulhim said getting out of the FATF gray list was important for Pakistan, which improved the country’s credibility in financial markets and with donors. He appreciated all stake-holders for aligning together to ensure better governance for the country to get out of the list. To a question about combating financial crimes through technological advancement, the Eastnets chief said tech advancement had “all the positives and it has all the negatives,” but awareness about its utilization was a must.
“Technology is the answer to financial crime, but with technology there should be lot of awareness because organized crimes have their own technologies and this is why they attack,” Mulhim said.
