Posts Tagged ‘Peshawar’


Half of Pakistani hawala dealers are unlicensed

April 28, 2015

The U.S. State Department’s international narcotics report for 2015 says that half of remittances sent from the diaspora back home were processed by hawala dealers. Hawala is the traditional Islamic method of transferring funds. Hawala is also a preferred method of sending money among terrorist groups because of the difficulty in tracing such transfers. The remittances handled by hawala amount to $9 billion according to the report:

From January through November 2014, the Pakistani diaspora legitimately remitted approximately $18 billion back to Pakistan via the formal banking sector. Though it is illegal to change foreign currency without a license, unlicensed hawala/hundi operators are prevalent throughout Pakistan, and it is estimated that use of these operators accounts for over half of the total remittances. Unlicensed hawala/ hundi operators are also common throughout the region and are widely used to transfer and launder illicit money. Some support the financing of terrorism.

The report goes on to note that unlicensed hawala is especially common in Karachi and Peshawar.

By the way, even a 50 percent registration rate of hawala businesses is higher than it is in the U.S. Our authorities are only licensing 17 percent of hawala dealers according to a study out of George Mason University.


Paks blame Afghans for extortion in Peshawar

June 20, 2014

What unbelievable gall Pakistani intelligence is demonstrating by blaming “Afghan nationals” for ongoing extortion, kidnap-for-ransom, and murder-for-hire schemes in Peshawar.

It was Pakistani intelligence that created and funded the Taliban and other jihadist groups in the first place to give Pakistan “strategic depth” in their ruthless desire to gain any conceivable edge over India. It was Pakistan that funded radical curriculum and instruction at madrassas and Afghan orphanages.

Now that their efforts have begun turning their own cities into charnel houses, they’re distancing themselves from their own creation.

Pakistan didn’t seem to mind harboring Osama Bin Laden, because he didn’t attack Pakistan while he lived there. But Pakistan does mind when his buddies start making mischief on their own streets.

Message to Pakistan: you made your own bed, now lie in it.


The mystery of a $10 million terror transfer

April 25, 2014

Thirty-four billion Pakistani rupees (approx. 10.4 million USD) have been transferred to major cities in Pakistan near the border of Afghanistan over the past two years; the beneficiaries of the transfers may have included terrorist groups. The transfers were revealed by Pakistan’s Federal Investigation Agency earlier this year to the Express Tribune:

Funding terrorism: Illegal cash flows may be aiding terrorists

KARACHI:  Terrorist groups in the Federally Administered Tribal Areas (Fata) and Balochistan have been receiving billions of rupees each month through banking channels and money exchange companies, sources in Federal Investigation Agency (FIA) have revealed.

These companies in collusion with some bankers have been transferring huge amounts to unnamed bank accounts in Quetta and Peshawar. The FIA has recently found evidence of transfer of billions of rupees to the two cities in the last few months.

According to sources, the FIA made these discoveries during its investigations into the multibillion rupee Trade Development Authority Pakistan (TDAP) scam.

Ironically, the Financial Monitoring Unit (FMU) and other institutions, whose task is to curb the illegal business of hundi and hawala, are completely unaware of these dubious transactions, made right under their nose.

If the law enforcers can trace the people receiving billions of rupees through unnamed accounts in Peshawar and Quetta, they will possibly be able to unearth terrorist activities funded by this money…

The Business Recorder provided more details a few weeks ago, reporting that TDAP and commerce ministry officials set up shell companies that claimed trade subsidies known as “general freight subsidies” or “freight subsidies” for the export of “live seafood.” The subsidy checks were then deposited in 10 banks which transferred the $10 million over a 30 month period. Ninety percent of the money obtained through bogus trade subsidy claims was later withdrawn in cash, and some money was subsequently sent to banks in the United Arab Emirates and the West.

The FIA has urged the State Bank of Pakistan to carry out a forensic audit into the transfers.  Yeah, might be a good idea, fellas.


Ex-banker: Taliban funded by sharia finance

April 1, 2013

Muhammad Aamir, a retired Pakistani banker, admits that, “It is true that Taliban militants receive financial support through the Islamic banking system, but there is no proof because these illegal transactions are never properly investigated,” according to an article from Central Asia Online last week.

Muhammad Junaid, a banker currently working in Peshawar, says he is familiar with three account holders who work closely with terrorists receive over $50K monthly from Islamic banks.

Some financial sector employees disagree, but the evidence that sharia banks finance jihad has grown to the point where it is impossible to ignore.  Thanks to meankitteh for sending in this article, which frankly understates the scope of the problem:

Islamic banking: A conduit for terror funding?

Opinions differ on whether the financial network is being misused to funnel support to militants, but the system does have loopholes that would allow for it.

By Ashfaq Yusufzai


PESHAWAR – Some worry that the Islamic banking model is open to potential misuse by those involved in funding terrorist activities, but opinions differ on whether the financial network is directly involved in such schemes.

The dividing line for the opinions seems to come down to how one is involved in the business.

“It is true that Taliban militants receive financial support through the Islamic banking system, but there is no proof because these illegal transactions are never properly investigated,” Muhammad Aamir, a retired banker, told Central Asia Online.

But Adnan Rasool, an Islamabad-based Islamic banking specialist with a state-owned bank, said it is “totally wrong” to say that the system helps terrorism.

“In Pakistan the share of Islamic banking has risen to 10%, which shows the public confidence in the system,” Adnan said. “We have more than 1,000 dedicated Islamic banks as well as more than 700 Islamic banking counters operated in conventional banks.”

Allegations arose in early 2001 that the system aided terrorism, but authorities couldn’t prove any of them, Adnan said, adding that Islamic banking has come of age worldwide and in Pakistan, where it has financed huge projects that benefit the people.

Why Islamic banking is vulnerable to terrorist misuse

Islamic banking, which began in the early 1970s, is a financial system that involves making loans without charging interest, in accordance with Sharia law. It is worth about US $2 trillion (Rs. 197 trillion) worldwide and has posted an annual growth rate of 15%.

Terrorists have long relied on various channels to finance their activities and Islamic banking is one option that terror supporters have used in the past, Aamir said, describing an example of suspected terror funding.

A resident of Hangu District received “a hefty amount through Islamic banks from different sources in the UAE, Saudi Arabia and other Islamic countries” in 2001, he said. “He was a common man who disappeared after the 9/11 incidents in New York and Washington.”

Police briefly investigated the case, he said, but nothing came of it.

Another banker also has suspicions about the system.

Muhammad Junaid, an employee of a private bank in Peshawar, agreed with the notion that Islamic banking is key to financing terror bids in Pakistan and elsewhere but said these illegal acts aren’t easily traceable.

“For instance, I knew three account-holders in our bank who each received about Rs. 5m (US $50,829) every month from some Muslim countries,” said Junaid. “The men – pretending to be getting the money for construction of mosques and religious seminaries – seemed to be hand-in-glove with terrorists.”

That is indicative of something suspicious, he said, because “one cannot believe that simple people have such frequent financial transactions through banks. But … there are no complaints from any quarter.” But again, proof is scant and Adnan stands by his industry.

“Islam strictly forbids terrorism in all its form and therefore Islamic banking seeks to promote Islamic values,” he said. “We have an internal system in Islamic banking that prevents the illegal investments and transactions; therefore, it is impossible to send the money through this network to terrorists.”

Islamic banking system has loopholes

Islamic banking was designed to follow Islamic values, Junaid said. In accordance with Sharia law, it is expected to avoid interest-based transactions and unethical practices while it helps boost the economy.

However, loopholes make it difficult to identify illegal transactions in the system, he said.

Pakistan began implementing the system in 1978, economist Jalal Khan, at the Institute of Management Studies at the University of Peshawar, said. Early measures included doing away with interest from the operations of specialised financial institutions – including the House Building Finance Co. Ltd., Investment Corporation of Pakistan and National Investment Trust Ltd. in July 1979 – a practice that extended to commercial banks in the 1980s.

The premise of interest-free loans, even though it goes along with Islamic ideals, has not protected the system from suspicion of links to terror funding, Shah Jehan, a banker at a private financial institution, told Central Asia Online.

Hawala, an informal system that allows fund transfers without much regulatory control, also was allegedly linked to terror financing, he said.

“Despite a hue and cry by global leaders spearheading the war against jihadist groups, new legal modes of transactions [including wire transfers] that have now replaced the hawala system are part of the Islamic banking system and have been lifelines for terrorists,” Jehan said…