May 29, 2017

This article published in ‘Dawn’ last year not only describes the K&K case clearly but at that highlights some of the underlying issues in Pakistan. A large informal economy, a tradition of sending money abroad and widespread use of hawala networks are the 3 basic factors. Then there’s a widespread use of over- and under-invoicing and the use of other Trade Based Money Laundering techniques involved. Add to that the difficulty to actually prove the money transferred is related to crime and you have a recipe for the disaster described.

A question that comes to mind though is: would a proper country risk assessments have revealed these issues? And: wouldn’t it make sense to do a risk assessment at country level in other counties were similar situations are expected? Just to prevent cases like this.