FIA to investigate 100 people for ‘smuggling, hoarding’ of $63m

LAHORE: In a bid to check the rising value of US dollar, the Federal Investigation Agency (FIA) has decided to investigate about 100 individuals for allegedly buying over $63 million from different exchange companies in Lahore that are believed to have been either smuggled to Afghanistan or hoarded during the last 45 days.

“The FIA Lahore on Tuesday served notices on some 100 individuals asking them to appear before it from Oct 15 for their alleged involvement in buying US dollars in a structured manner keeping each transaction either below $35,000 or $50,000 to evade statutory due diligence protocols, which is leading to dollar-hording, money laundering and illegal outward flight and smuggling,” an official told Dawn on Tuesday.

He said these individuals would be quizzed about the purpose of buying such a huge sum of foreign currency, especially during the last 45 days. “It is suspected they have bought US dollars either to hoard or smuggle to Afghanistan,” he said.

FIA Lahore Director Mohammad Rizwan led teams to collect data from headquarters of currency exchange companies in the city following reports that a large sum of US dollars had been either smuggled to Afghanistan or hoarded.

The official said the FIA’s action had led to a pause on the rising value of dollar. “After investigation, action will be taken against those involved in money laundering and hoarding of US dollar,” he said, adding that FIA had collected data from exchange companies from January to September 2021 that helped detect the individuals who bought dollars in bulk.

“Under the law, if an individual buys $35,000 (from an exchange company) the transaction has to be reported to State Bank of Pakistan (SBP) and made through a cheque. In case of purchase of over $50,000, the buyer has to seek permission from the SBP. In many cases, buyers in collaboration with exchange companies purchased even over $100,000 in five or six transactions to avoid reporting to the SBP because it refers such transactions to the FIA and the Federal Board of Revenue,” the official said. Another official said some exchange companies were involved in these “systematic transactions”. “About 100 individuals in question had been sold $63m taking advantage of the loopholes in the system,” he added.

The SBP has imposed another restriction on buying dollars. It has made biometric verification compulsory for all those buying 500 or more dollars from the open market.

The exchange companies earlier highlighted through the media that the outflow of dollars to Afghanistan was pretty high, while the Fitch Ratings company also recently cited this issue as one of the reasons for destabilisation of the exchange rate.