As reported by policy research group Poreg, US has fined two of Pakistan’s major regulators with fines over USD 50 million for not complying with antimoney laundering laws. Pakistan has been on the grey list of the Paris-based Financial Action Task Force (FATF) since June 2018. In a recent development, the FATF had retained Pakistan on its “grey list”.
On 24th February, The Federal Reserve Board and Federal Reserve Bank of New York, and the New York State Department of Financial Services (NYDFS) announced that the National Bank of Pakistan’s New York Branch would be fined up to $55.4 million for non-compliance and anti-money laundering violations. As per reports, the New York Department of Financial Services, in its investigations, found that the Pakistani bank had failed to meet mandated oversight requirements and had serious issues with its transaction monitoring system.
This is not the first time that a Pakistani bank has come under heavy scrutiny and sanctions for anti-money laundering violations.
In 2007, Pakistan’s Habib Bank was sued by the widow of assassinated US journalist Daniel Pearl for running the financial pipeline for Al Qaeda and other terrorist groups. In 2017, the New York Department of Financial Services imposed the most severe penalty on Habib Bank Limited of Pakistan leading to the closure of its New York Branch.
In another example, HBZ Bank with its roots in Pakistan and headquartered in Durban was sanctioned by South Africa’s central bank in 2019 for violating the country’s Money Laundering and Terrorist Financing Control Regulations. In the year 2020, six Pakistani banks were found to be involved in 29 suspicious transactions amounting to US $ 2.5 million that happened between 2011 and 2012. The names of these banks were: Allied Bank, United Bank (UBL), Habib Metropolitan Bank, Bank Alfalah, Standard Chartered Bank Pakistan, and Habib Bank (HBL).
In February 2020, the UAE central bank also launched an investigation into Pakistan’s largest bank, Habib Bank Ltd, for possible violation of anti-money laundering and terrorism financing laws.
