Pakistanis working in Saudi Arabia could have their cash confiscated under international money laundering laws if they use illegal means to send their earnings home to relatives. This is the warning issued by Khalid Bin Shaheen, the National Bank of Pakistan's senior executive vice-president. He was speaking at a press conference Saturday, at the launch of the Pakistan Remittance Initiative. This is a new initiative to encourage overseas Pakistanis to use only the banking channels for sending their remittances. He said that Pakistani workers could risk their hard-earned savings by opting for money transfers through illegal channels such as Hawala, a method widely used to send cash through agents not recognized by the local and international banking system. Hawala contravenes local and international money laundering laws. Shaheen said that during his tour to Saudi Arabia and other Gulf states he had personally visited the labor camps and urged low-salaried Pakistanis to use banking channels to safeguard themselves from any problems with the law. Using the Hawala method to send money could be a risky practice for Pakistani workers, he warned. “The money sent by Hawala might pose far-reaching consequences to the remitter and his family back home, as the funds could be channeled to terrorists fighting a war against the state, he said. Shaheen said the initiative was the joint effort by the country's Finance Ministry and Ministry of Overseas Pakistanis. As part of the crackdown on money laundering agents, the Pakistani authorities have cancelled the licenses of at least two money exchangers, suspected of involved in the Hawala racket. “The Pakistani government has frozen $1 million worth of assets of one of the money exchangers. There are other such companies under government's scrutiny and may face similar consequences,” Shaheen said. With such measures the government was able to reduce the percentage of money transfers through illegal channels, to less than 20 percent from over 70 percent in the recent past, he said. He said the remittances from Saudi Arabia to Pakistan rose 22 percent in the third quarter of 2009 (July to September) and expected to reach the $2 billion mark by end of this year, compared to $1.4 billion in 2008. Shaheen said the NBP will open its full-fledged branch in Riyadh after two weeks, which will further streamline the process of remittances through banking channels. Under the PRI initiative some five leading banks of Pakistan including the NBP, Habeeb Bank of Pakistan, Allied Bank, National Commercial Bank, and United Bank Limited have developed a system called real-time gross settlement (RTGS) which allows the beneficiaries of remitter to withdraw cash from over the counter, he pointed out.
