The Federal Board of Revenue (FBR) has increased its efforts to combat trade-based money laundering, which was disguised as solar panel imports.
FBR Investigating the Over-Invoicing Amounts
According to well-informed sources, the FBR is actively working to recover the over-invoicing amounts associated with these transactions.
However, in an effort to uncover the complex network of illicit financial activities, the FBR’s Financial Intelligence Unit has initiated collaboration with the Customs Administration of the United Arab Emirates (UAE), Singapore, and China.
Imports of Solar Panels
Moreover, solar panels imported from China were at the heart of this massive money laundering scheme, with over Rs. 18 billion being funneled to various destinations such as the UAE, Singapore, Switzerland, and the United States.
According to FBR reports, importers diverted approximately Rs. 8 billion to the UAE, more than Rs. 6 billion to Singapore, and approximately Rs. 2 billion to Switzerland. These transactions took place outside of the regulator’s jurisdiction.
However, by importing solar panels from China over the last five years, money has been transferred to no less than ten other countries.
This raises serious questions about the scope of the illegal financial activities that have plagued these transactions.
Post Clearance Audit
Additionally, the FBR’s post-clearance audit officials discovered clear violations of foreign exchange regulations, confirming the need for immediate intervention.
Importers appear to have not only ordered solar panels from China, but also remitted large sums of money to foreign countries in violation of foreign exchange regulations.
Registered Cases
However, the FBR has formally registered cases of over-invoicing and trade-based money laundering against the implicated importers in response to these findings.
Furthermore, the tax authority has already signed a cooperative Anti-Money Laundering Agreement with the UAE’s Financial Intelligence Unit.
Under this agreement, the FBR has formally requested the Financial Intelligence Unit of the UAE’s cooperation and support in combating the extensive network of trade-based money laundering.
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