Revenue Board starts probe into illegal foreign exchange business

ISLAMABAD (June 25 2003) : On the complaint of State Bank of Pakistan (SBP), the federal tax authorities have started investigation against moneychangers and organised gangs allegedly involved in illegal foreign exchange business.

According to SBP, these gangs, using their connections, hand over the foreign currency amount to their agents at the international airports.

After agents/carriers clearance from the customs/immigration these gangs re-collect the amount in the departure lounges or inside the aircraft.

The foreign exchange thus amassed by the moneychangers is used in Hundi/ Hawala transactions, expanding illegal foreign currency market.

These gangs usually operate at international airports and misuse the facility given to genuine passengers to carry cash amount of $ 10,000 during their international travel from Pakistan.

The Central Board of Revenue (CBR) on Tuesday warned the custom authorities at international airports to remain extra vigilant to stop flight of foreign exchange through non-banking instruments.

The CBR has also directed the custom officials to investigate the matter and submit a report on top priority basis.

In this regard, Deputy Governor, SBP, has informed the CBR Chairman that huge amount of foreign currency goes out of the country on the basis of the notification issued by SBP under Foreign Exchange Regulation Act, allowing individuals to carry cash amount up to $ 10,000 or equivalent, during their international travel from Pakistan.

This facility is being misused by moneychangers and unscrupulous elements through arrangement under which the foreign currency amount is handed over in cash up to a sum of $ 10,000 or equivalent, per person, to their agents working as carriers at airports.

The foreign currency is cleared from the customs and the same is recollected in the departure lounges of the airports or even inside the aircraft.

Deputy Governor SBP noted that the matter was of serious concern as a large sum of foreign currency is going out of the country and is being used subsequently by Hundi/Hawala system.

The CBR should investigate the matter so that remedial steps may be taken to curb these nefarious activities, SBP added.

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