New Delhi, Nov 22 (NationPress) The International Monetary Fund (IMF) has issued a warning that Pakistan remains exposed to significant risks associated with corruption-related money laundering. The country's weak accountability mechanisms and frequent political meddling are severely compromising investigations.

This assessment was highlighted in the Governance and Corruption Diagnostic Report, which was released by Pakistan’s Ministry of Finance on November 19.

The Tribune Express reported that the banking, real estate, construction, public procurement, and sectors involving politically exposed persons are identified as high-risk areas.

The IMF noted that the proceeds of corruption in Pakistan are often concealed through shell companies, the misuse of corporate structures, and informal money transfer systems.

Moreover, judicial delays, prolonged trials, and low conviction rates further diminish the effectiveness of anti-money laundering (AML) enforcement.

The IMF observed that corruption is deeply entrenched in the nation, yet evolving demographics are shifting public expectations.

With over 60 percent of Pakistan’s approximately 247 million citizens under the age of 30, a rising urban population and active social media engagement are driving a growing intolerance for corruption and a demand for accountability and improved public services.

The report indicated that politicians are starting to acknowledge the urgency of tackling corruption to fulfill these expectations.

The Fund recognized that Pakistan has initiated measures to enhance oversight in the financial sector, including targeted inspections of banks to ensure compliance with AML regulations, particularly regarding the onboarding of politically exposed individuals and the generation of suspicious transaction reports.

However, it emphasized that high-profile or politically sensitive cases still experience external interference, undermining the independence of investigative bodies and eroding public trust.

The IMF report pointed out significant flaws in Pakistan’s enforcement system.

It highlighted that the National Accountability Bureau (NAB) takes approximately four months just to initiate a formal inquiry into corruption-related money laundering complaints due to extensive administrative vetting. Many complaints fail to progress, as stated in the report.

The IMF also identified gaps in institutional coordination, weak enforcement of preventive measures, and inadequate follow-up in operational activities.

While Pakistan informed the IMF of over Rs 944 million in penalties imposed on 17 banks in 2023–24 for money laundering violations, concerns persist regarding selective enforcement, particularly concerning cases involving politically connected individuals.

The report noted that the Federal Board of Revenue (FBR) struggles to effectively oversee Designated Non-Financial Businesses and Professions due to the vast number of entities under its jurisdiction and the limited staff available for inspections.

The IMF stated that key institutions fail to publish detailed statistics on corruption-related suspicious transactions, inspections, investigations, or sanctions, which contributes to ongoing skepticism about the fairness and transparency of Pakistan’s AML framework.