Pakistan has assured the International Monetary Fund that it will strengthen interagency data sharing and tighten oversight of trade-based transactions after an inquiry found that nearly Rs. 70 billion may have been laundered through over-invoiced solar panel imports.
Prime Minister Shehbaz Sharif has set up a supervisory committee to monitor disciplinary action against officials accused of failing to detect and stop the alleged scheme, according to a government notification.
The panel was formed after the government examined findings from an inquiry into suspected trade-based money laundering linked to solar imports between 2017 and 2022.
The case has emerged as Pakistan seeks to satisfy IMF commitments under its latest staff-level agreement, including stronger anti-money laundering and counter-terror financing controls.
As part of those assurances, Islamabad told the IMF it would improve data sharing across agencies, including better coordination on foreign-currency reporting for imports and customs data, and enhance monitoring of trade-based money laundering at both the macro and transaction levels.
The inquiry report described the solar panel case as a failure of state institutions, saying the alleged fraud was carried out by exploiting systemic weaknesses, poor coordination and official inaction. Investigators found that about 6,232 import documents were allegedly over-invoiced during the five-year period, enabling an estimated Rs. 69.5 billion to be moved out of the country.
Trade-based money laundering typically involves overstating import values or understating export proceeds to shift funds abroad.
According to the findings, the Financial Monitoring Unit failed to exercise effective control and conducted weak currency and suspicious-transaction analysis. The Securities and Exchange Commission of Pakistan was also said to have registered shell companies with minimal capital, while failing to analyze annual returns and audit reports in a way that could have flagged potential laundering risks.
The State Bank of Pakistan was criticized for weak bank inspections despite an existing anti-money laundering framework. The report said the central bank delayed penalties and moved only after intervention by the Senate Standing Committee on Finance.
It also found that commercial banks cleared inflated import values for years without effective post-audit checks, allowing billions of rupees to be moved through the financial system.
The inquiry committee recommended disciplinary action against officials from the Financial Monitoring Unit, the securities regulator, Inland Revenue, Customs, and anti-money-laundering bodies, as well as criminal proceedings against bank officials accused of facilitating the transactions.
It also called on the central bank to strengthen compliance monitoring through real-time automated tools, conduct internal audits of its inspection and enforcement units, and establish an accountability framework for repeated non-compliance by banks.
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