108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS

CURRENT PROBLEMS IN THE COMBAT OF
TRANSNATIONAL ORGANIZED CRIME (PAKISTANPERSPECTIVE)
Tahir Anwar Pasha*
I. INTRODUCTION“Organized Crime”, initiallysynonymous to a certain Italianphenomena like ‘Mafia’, ‘Camorra’ etc., has
now extended to cover the whole world andis the most dificult challenge to criminal
justice policies. Criminals no longer live
within the parameters of nationalboundaries. It facilitates criminals to
operate transnationally, both in terms offinance and their own security. They don’t
encounter the difficulties - which the law
enforcers face - when crossing national
borders for ulterior motives.
The recent decades have seen an
information explosion which has reduced
the world into a global village. Internet
operations and satellite communications
are biased in favour of criminals rather
than the proponents of the criminal justicesystem. Just a delay of hours - which is not
unusual in official channels - can create a
gap of thousands of miles and man hours
in the efforts to bring criminals to justice.
Law enforcers always fall behind inmatching the wealth of crime syndicates.
It is these riches which infact persuade thetalented unemployed to keep on joining
shady activities. They obviously get agreater benefit, with less effort than they
could through legitimate sources. Crimeorganizers do not have to pass through thecumbersome procedural requirements ofdemands, budgets, requisitions, sanctions,* Deputy Inspector General of Police, Central Police
Office in Lahore, Pakistan.

spending rules and subsequent audits.
Similarly, the proceeds of crime are noteasily accessible to law officers on various
counts. Criminals use intricate
methodologies to camouflage the proceedsof crime and there are problems ofjurisdiction across national borders. Under
these circumstances it becomes almost an
impossible task to prosecute and punish
the offenders who operate transnationally.
The immunity so provided to crime
operators is fast becoming the vehicle of amulti-fold increase in the transnationalorganized crime. This has been felt by mostof the developed (and developing) countries
and the issue of transnational organizedcrime began to echo in international
forums. Think tanks remained busy formany million of hours to overcome thedifficulties in combatting transnational
crime. Discussions, Seminars Workshops,
Symposiums, Conventions, Treaties etc.
were designed to construct dams on the
gushing flow of illicit channels. Some ofthese efforts, though slow, created an
inpact and the desired results, but most ofthem remaind ineffective due to technology
advances (of which the criminals are better
availers).
It is in this context that the present
paper has been written, to take stock of the
problems which the world is still facing in
the combat of transnational offenders. In
this paper, I shall deal with issues from my
own country’s point of view on the following
type of transnational crime:(a) Illicit drug trafficking.
(b) Illicit firearms trafficking.
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RESOURCE MATERIAL SERIES No. 54(c) Smuggling of illegal migrants.
(d) Illicit trafficking in women andchildren.
(e) Illicit trafficking in stolen motor
vehicles.
(f) Money laundering.
(g) Transnational economic crimes (e.g.,large-scale fraud targeted atcorporations or organizations, credit
card fraud, counterfeit currency offinancial cheques, fraud by way of
manipulating computer systems orother high technology equipment).
As far as Pakistan is concerned, illicit
drug trafficking and resultant money
laundering are the most relevent issues.
The other types of crime mentioned above
are either not prevalent nationally - likelarge scale frauds targeted at corporations
or organizations, credit card fraud,counterfeit currency or financial cheques,
fraud by manipulating computer systems
etc. - or if they are prevailing, they are notof much concern.
There may be sporadic cases of illicit
firearms trafficking in Pakistan, but noorganized gangs dealing in such nefarious
activities have come to notice. However,there was the fallout of the Afghan war,
when Afghan refugees sneaked into
Pakistan’s tribal area along with theirarms, some of which were lethal and hightech, for barter trade. This issue has cometo a lower level after the war turned into
an internal civil war, and the Pakistan
border side of Afghanistan came under theoccupation of the Talibans.
There was a time when money values
had changed in Pakistan - like many otherdeveloping nations - and most of the skilled/
unskilled workers sought employment
abroad in move affluent countries. A
mushrooming growth of gangs dealing inillegal immigrants was noticed. These
gangs operated transnationally. With148

stringent laws and measures taken bothnationally and internationally, thisproblem has almost come to a halt inPakistan. There were periods in theprevious years when zero illegal
immigration was recorded.
Illicit trafficking in women and children
is also not much of a problem in Pakistan.
There was some illicit traffic from aneighbouring region and one far easterncountry of women for prostitution(disguised at house maids). Similarly there
was some trade of children from thesouthern part of Punjab (the biggest
province of Pakistan) to some middle
eastern countries for the purpose of camel
races. Although the immigration was legal
and was with the consent of the parents or
guardians, it was still considered illicit onhumanitarian grounds. Both these issues
have since died down due to effective
checks by the law enforcement agencies ofPakistan and elsewhere.
Transnational trade of stolen vehicles isa recent phenomena as far as Pakistan isconcerned. Our western borders are
inhabited by tribal groups on both sides.
The area is called, in the local language,“Illaqa Ghair”, meaning, the land of aliens.
The tribes traditionally don’t acknowledge
the international boundaries. Their freemovement provides opportunities toestablish safe havens - on the other side of
the border - for contraband items. These
havens have become smuggling rendezvous
points because of the restrictions or heavy
duties imposed on certain items, which
includes vehicles. The vehicles aretransported to settled areas of Pakistan
illegally and plied on roads with fictitious
number plates. Similary, vehicles stolen
from the settled areas of Pakistan - mostly
luxury cars & vans - are transported totribal areas from where they are sold at
dirt cheap prices or returned to the actual
owner after receiving “handling charges”,

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
which often amount to millions of rupees.
This problem is almost a localized issue
which can only technically be termed astransnational.

convert opium into heroin. This is
how heroin - discovered back in 1898
- was introduced to this part of theworld in 1980.

This leaves us with the actual problem
area for Pakistan i.e. drug trafficking andthe resultant money laundering, which
consumes most of the energy of law
enforcment in Pakistan.

As against 800,000 square kilometers ofterritory, opium production is confined toonly a few isolated pockets of Pakistan. The
area under cultivation has been reduced
from 32,200 hectares in 1978, to 5215 in
1995; and poppy production from anestimated 800 tons in 1978-79, to 109.5
tons in 1995. In 1996 opium production was
further reduced to only 2.8 metric tons.
Pakistan is thus no longer a central
producer country. It is thus clear that a very
negligible area of Pakistan territory wasconnected with narcotics in the past. Since
1996 Pakistan has ceased to be a producer
contry.

II. DRUG TRAFFICKING:CURRENT SITUATION
Drugs have remained a social menace,(in some form or other) since the time
immemorial. We can not overlook theopium addiction in China, which paved way
for the revolution. The Indian subcontinent
too, has remained in the spiral of addiction.
There is always a growing demand which,as per economic theory, creates theresultant supply. In this regard thesituation in Pakistan is no different.
A. Pakistan a Victim - not a Source
Country
At the time of independence in 1947,
Pakistan was a unable to supply its own
opium addicts, therefore opium wasimported from India until 1956. After 1956,
a few areas were allowed to produce‘licensed opium’ under strict controls. The
numer of opium addicts never reached asignificant mark. The production oflicensed opium continued until 1979, when
two very important developments took
place:(a) The Islamic revolution of Iran in
February 1979;(b) The promulgation of the Islamic
Hudood laws in Pakistan which
totally banned opium production.
Farmers were therefore left withhuge stockpiles - about 800 tons ofopium - and did not know what to dowith them At this point, someWesterners taught them how to

The war in Afghanistan led to porous
borders with the country, resulting in
spread of the narco-guncultre. With noheroin addicts in 1979, Pakistan is now
burdened with 1.52 million heroin addicts.
Pakistan needs anything between 600 or
800 tons of poppy or 60 to 80 tons of heroin
per year to feed its own drug addicts. We
are, now therefore, net importers notexporters of heroin.
B. Alarming Domestic Consumption
On the consumption side of heroin
Pakistan is badly effected. To know theactual ground situation, a “National
Survey on Drug Abuse” was conducted in
1993. The survey dawned facts which
created panic among sociologists. The
following are the salient features of thesurvey:(a) There are 3.1 million drug users (0.77
million in 1988).
(b) Most popular drug is heroin, which
is used by 1.52 million (51%).
(c) Second most popular drug is hashish,
used by 0.89 million (29.5%)

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RESOURCE MATERIAL SERIES No. 54(d) Proportion of drug users:
Urban - 52%
Rural - 48%(e) 71.5% of drug users were under 35
years of age with the highest
proportion in the 26-30 year age
group.
(f) Almost 60% were literate and asimilar percentage were employed.
(g) Among occupational categories, thefrequency of drug use was highest(53.3%) for those in skilled andunskilled labour categories, followedby sales (14.1%), students (11.4%)
and agriculture (10.9%).
(h) The average monthly personal
income of drug users was Rs. 3054/(US $ 28).
(i) 97.2% drug users were male. 2.98%
were female.
(j) Over time, the drug abuse pattern
has changed in favour of heroin
instead of hashish and othertraditional drugs.
(k) Sources of introduction to drugs were
mostly attributed to friends in 68.6%,
and to casual acquaintances or drug
pushers in 15%, of the cases. Family
members made up another 9% of thecases.
No doubt the dark clouds of drug menace
are surrounding Pakistan, but there is athin silver lining also. About 60% of heroin
addicts expressed desire to quit by having
recourse to treatment centres. Also, theincrease in the number of drug addicts was
only 7% during the period 1988-93 while itwas 12% during 1983-88.
C. Economic Factors leading toTransnational Traffic
Traditionally poppy cultivation is taken
as a cash crop - like other cash crops
elsewhere - in the tribal areas and in
Afghanistan. This used to be the bread andbutter, of the smaller land holders who, in
the rugged terrains, had nothing else for150

subsistence. Cultivantion of poppy was also
encouraged by the then colonial
government for export to China. Still thearea constitutes a very small fraction of the“Golden Crescent” of South West Asia. For
centuries, the tribal area was thelegitimate supplier of opium until theIslamic Hadood Laws were introduced in
1979. Evolution of heroin after this (due toreasons already explained ) reduced thevolume of opium but increased its price tentimes. As heroin production took less hiding
space than crops, clandestine operations
became easy and resulted in handsome
returns. Profit margins had a cumulative
effect with the increase of distance fromthe source point. Price differentials sky
rocketed when the drug reached theinternational market.
Price difference in the international
market can be well illustrated by the factthat the heroin which costs Rs. 70,000/-to
1,00,000 (USD $ 1550 to 2200) per kg inPakistan, is sold for over USD $100,000 in
the streets of some developed westerncountries. The Criminal Intelligence
Directorate of Royal Canadian Mounted
Police have carried out an analysis of theinternational prices of illicit drugs in 1996
for comparative reference.
The huge difference in international andlocal market prices resulted in billions ofdollars in illicit export trade. This has not
only created a dearth of drugs inside ourcountry, but also has inflated the domestic
spending on drugs. A UNDCP (United
Nation Drug Control Programme) study in1994 estimated consumer expenditure on
heroin in Pakistan to be in the range of Rs.
35 billion (US $ 1.2 billion) per year. This
volume of drug trade has logically createdand underground parallel economy with its
own supply and demand mechanism, andits own style of corruption.

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
Pakistan has also been affected by what
is known as the balloon effect. If drug
production is reduced in a given area, theimpact of continued demand inevitably
ensures that greater production occurs ina neighbouring area. Thus while Pakistan
has been able to reduce its output of opium
considerably, increased production in
Afghanistan (2300 tons in 1996 - UNDCP
estimate) due to the prevalent politicalsituation there has served to effectively
negate whatever progress we have beenable to achieve. The impact to the balloon
effect has clearly shown that efforts atsolving the narcotics problem must also be
initiated at regional levels; as increased
opium production and heroin laboratories
across the borders in Afghanistan havecontributed significantly to the supply ofopium and heroin in Pakistan.
Drug production in Afghanistan is not
only meeting the domestic demand of
Pakistan but it is also forming the basis of
an international supply route using
Pakistan territory as a conduit. The mostrecent trend of international drug traffic
is that Central Asian States are being used
for the transportation of drugs to Europe/
U.S.. This fact is acknowledged by the
INCB report for 1995 and 1996, and theConference of 37 countries in Europe inFebruary, 1995. Given the stringent
measures adopted by the Government ofPakistan, Pakistan may soon cease to be acountry utilized as a major conduit for theexport of drugs.
According to one estimate, about USD$1 trillion is involved in the global narcobusiness, out of which at least USD $ 200
billion is the share of the United States ofAmerica alone. This huge volume of money
dwarfs any thing earned by legitimate
means, leading the former U.N. Secretary
General to say before the General
Assembly, “Drugs are the most profitablecommodity in the world today” affecting thehealth of financial markets and even local
economics. According to various estimates,
not more than 5% to 15% of narcotic drugs
and psychotropic substances areinterdicted by the law enforcement
agencies of the world. It is thus obvious thatthe drug interdiction enforcement strategy
has failed to produce the desired results.
It is estimated that 90% of narcotics slip
through the net of enforcement agencies,and reach the drug market to meet theconsumers demand.
III. INTERNATIONAL AWARENESSAND COMBATTING STRATEGIESDue to the transnational nature of drugtrafficking, it would be improper to thinkthat it could be fought single handedly by
any nation, no matter how developed it is.
The international community as a whole
has to embark on a crusade against drugs.
The United Nations, being the sole
reqresentative institution in this respect
has come forward on this issue due to thecontinuing drug menace. Drug trafficking,coupled with the resultant money
laundering, forms the major portion oforganized crime transnationally. Efforts
made to curb organized crime are,therefore, mainly targeted at these two
specialized crimes. The seventh congresson the Prevention of Crime and theTreatmet of Offenders, held in Milan in
1985, adopted the “Milan Plan of Action”.
Key statements in that plan of action
included:“Crime is a major problem of national
and, in some cases, international
dimensions. Certain forms of crime canhamper the political, economic, social andcultural development of peoples andthreaten human rights, fundamental
freedoms, and peace, stability and security.
In certain cases it demands a concerted
response from the community of nations in
reducing the opportunities to commit crimeand address the relevant socio-economic

151

RESOURCE MATERIAL SERIES No. 54
factors, such as poverty, inequality andunemployment. The universal forum of theUnited Nations has a significant role toplay and its contribution to multilateral
cooperation in this field should be mademore affective”.
and:“Interested Governments should
cooperate bilaterally and multilaterally, tothe fullest extent possible, with a view tostrengthening crime prevention measuresand the criminal justice process by
undertaking action-oriented programmes
and projects”.
In furtherance of the objectives of the
Milan Plan of Action, in 1990 the eighth
congress adopted four practically-oriented
bilateral model treaties designed to assist
states in building the necessary framework
for increased co-operation. Those treaties,
subsequently adopted by the United
Nations General Assembly, are: the Model
Treaty on the Transfer of Supervision of
Offenders Who Have Been Conditionally
Sentenced or Conditionally Released; theM o d e l Tr e a t y o n t h e Tr a n s f e r o f
Proceedings in Criminal Matters; theModel Treaty on Extradition; and theModel Treaty on Mutual Assistance in
Criminal Matters.
The origins of international co-operation
or mutual assistance in the suppression ofcrime date back to the beginnings of formal
diplomacy. In what has been described as
the oldest document in diplomatic history,
provision was made for the return ofcriminals in a peace treaty entered into in(Circa 1280 BC) by Rameses II of Egypt
and Prince Hattusili III of the Hittites. The
need for mutual assistance, particularly in
the granting of help in the provision ofevidence to facilitate investigation andprosecution, has been recognazed for sometime by the international community. For
example, the Single Convention on
Narcotic Drugs 1961 imposed a number of152

obligations on signatory states (Pakistan
included as a signatory to it) to ensure that
persons committing offenses could not
escape justice. It required that each party
make conduct proscribed by theConvention a criminal offense carrying anadequate penalty, and to try a person forsuch an offence committed outside
territorial jurisdiction where the offenderis found in that country’s territory andthere is no extradition.
1990 also saw the production of the final
report of the Financial Action Task Forceon Money Laundering set up by the Heads
of State or Governments of the seven majorindustrial nations (the G7), in which 8
other nations were invited to participate.
Another milestone was the adoption, by aplenipotentiaries conference on 20
December 1988, of the United Nations
Convention, coming into force on 11
November 1990. The convention has
broken new ground in number of respects.
First, it creates an obligation on the partof all signatories (including Pakistan) tocriminalise conduct constituting what may
be loosely referred to as “money
laundering” in relation to narcotics activity.
This facilitates international cooperation
which, due to the application of the dual
criminality principle, is presently
hampered by the fact that many countries
do not at present criminalise such conduct.
Secondly, Article 6 dealing withextradition, imposes obligations on
countries, interalia, to conclude bilateraland mltilateral agreements to carry out or
to enhance the effectiveness of extradition
and, in relation to the conduct proscribedby the Convention, to expedite extradition
procedures and to simplify the attendantevidentiary requirements.
Finally, Article 5 deals comprehensively
with identifying, tracing freezing andconfiscating proceeds, or instrumentalities,

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERSof conduct proscribed by the Convention
and obliges countries to adopt suchmeasures as are necessary to enable themto fulfill those obligations, both nationallyand on behalf of other signatory states. It
also adopts mutual assistance provisions
for requests for action in relation to theproceeds of crime, and obliges countries toseek to conclude bilateral and multilateraltreaties, agreements or arrangements toenhance the effectiveness of international
co-operation in relation to the tracing,
freezing and confiscating of proceeds ofcrime. The Convention also expressly
prohibits a refusal of assistance based onbank secrecy. The principal reason for its
emergence is the recognition that financial
profit is the essential motivation oforganized crime and that an effective
countermeasure is the interdicting of suchprofits, which would otherwise be reinvested in further criminal enterprises. So
seen, it is a significant deterrent and crime
control mechanism. Furthermore, somecountries utilize confiscate proceeds tostrengthen the law enforcement armory
and to finance, for example, rehabilitation
programmes for drug addicts. Pakistan has
already established for this purpose, a
National Fund for control of Drug Abusein accordance with the provision of the
newly promulgated Control of Narcotics
Substances Act, 1997.
IV. LEGISLATIVE MEASURES INPAKISTAN
In line with the recommendations of theConvention against Illicit Trafficking inNarcotic Drugs & Psychotropic Substances
1988, Pakistan enacted comprehensive
drug laws. A Control of Narcotic Substanes
Ordinance was promulgated in 1995. Aftersome positive amendment, the ordinancebecome an Act of Parliament in 1997.
(Control of Narcotic Substances Act(CNSA), 1997. Similarly through an AntiNarcotics Force Ordinance 1995

(subsequently enacted in 1997, thePakistan Narcotics Control Board and Anti
Narcotics Task Force were merged into one
Anti-Narcotics Force for move effective
operation.
A. Salient Features of New
Legislation
Before independence Pakistan inherited
the Opium Act 1878 and Dangerous DrugAct 1930 which covered most of the drug
related issues relevant to that time.
However with the passage of time, theselaws gradually became obsolete because of
the new dimensions that emerged in drugtrade. With the introduction of the Customs
Act of 1969 and Prevention of Smuggling
Act 1977, the unauthorized flow of drugs
was somewhat controlled. To enhancepunishment, Islamic laws were enacted by
the Prohibition (Enforcement of Hadd)
Order 1979. Enactment of the Control of
Narcotic Substances Act 1997 (CNSA),
being a comprehensive law, covered mostof the lacunas which had developed in theexisting laws due to technological andinformation based advances. Very briefly,
the following are the salient features of the
CNSA:(a) Progressive punishments from two
years to death have been prescribed.
For the first time, the intensity ofpunishment has been linked with thequantity and type of drug.
Progression is well illustrated withthe help of Table 1.
(b) Money laundering has been declared
as a distinct crime and stringent antimoney laundering provisions
incorporated.
(c) Comprehensive provisions for civil
and criminal forfeiture of assets
which are derived from the proceedsof drug trafficking.
(d) Creation of special courts for speedy
disposal of cases.

153

RESOURCE MATERIAL SERIES No. 54(e) C o m p u l s i o n t o i n c l u d e p u b l i cwitnesses in narcotics seizures
dispensed with.
(f) No bail for offenses punishable with
5 years or more. For other offenses
no bail if public prosecutor so
certifies.
(g) Controlled delivery operations
legalized.
(h) C o m p r e h e n s i v e p r o v i s i o n s t oenhance international cooperation.
(i) Provision for the registration of drug
addicts.
(j) F i r s t t i m e d e t o x i f i c a t i o n a n dtreatment made statutory obligationof Government.
(k) National fund for drug abuse control
set up.
In the past, drug laws were notapplicable to Federally Administered Tribal
A r e a s ( FAT A ) a n d P r o v i n c i a l l y
Administered Tribal Areas (PATA) but now
the Islamic Hudood Laws have been
extended to these areas. Frontier corps (awell organized force) have been empowered
to perform enforcement duties in FATA
where, previously, there was no such
authority.
B. Enforcement Agencies
All of the above measures have resulted
in activities entailing large seizures andinterdictions. It is not out of place tomentioned here that the Anti-Narcotic
Force (ANF) is not the only agency whichtakes action against drug pushers. Alongwith all the Provincial Governments, notless than five Federal ministries are, insomeway or other, engaged in antinarcotics activities. Details of agencies
working in this respect are outlined inTable 2. The Anti Narcotics Force (ANF),
however, is the primary enforcement
agency. It coordinates the activities of all
enforcement agencies in the field ofinterdiction. Important cases of otheragencies are normally transferred to ANF

154

for specialized investigation. Assistanceand advice to other enforcement agencies
is also provided by ANF. It liaises with the
INCB, UNDCP, DEA and DLOs for latest
developments and information exchange.
Apart from this, the ANF is renderingcommendable services in reducing thedemand for drugs. The new Master Plan
gives priority to demand reduction
activities, such as preventive education andmass awareness, besides making drug
enforcement more effective. Drug addicts
will be treated as psychotropic patients
rather than criminals. Registration of drug
addicts and their first-time treatment has
been made a statutory obligation of thegovernment.
C. Enforcement Statistics
The salient feature of the enforcement
campaign in 1995 has been two deep druginterdiction raids undertaken by the
Frontier Corps (FC) in Tribal Areas. The
Frontier Corps in a swift/massive raid in
the Khyber Area on January 27 and 28,
1995 seized 480 kgs of heroin, 170 tons ofhashish and arrested 19 drug offenders.
The above raid was followed by more
stringent action deep in the Choora Valley,
where FC/ANF seized 6,300 kgs of heroin,
105,000 kgs of opium and 3,705 liters of
Acetic Anhydride in March 1995. In
addition to the above, 15 heroin processing
units were also destroyed. Similarly raids
in December 1996 led to the destruction of
10 heroin laboratories and the seizure of
143 kgs heroin, 38 kgs hashish, 757 kgs
opium and 1,754 litres of Acetic Anhydride.
In March 1997, also the Tribal Lashkar
destroyed a non functional heroinlaboratory and siezed 70 kgs of heroin,arresting 5 Afghans. The significance of
this raid lies in the fact that the Tribals
themselves took the initiative fordestruction. Their self motivation is a
development of monumental proportions.
Apart from these mentionable seizures,

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
other agencies have also remained active
in drug hauls. The following figures
recording seizures by all Agencies (in Tons)
may be of interest:

Opium
HeroinHashish

1994
14.36
6.02
178.291995
107.2339.416
294.525

1996
7.377
5.763
189.136

Agency wise details are provided inTable 3 for the first 10 months of 1997.
A considerable reduction in seizures has
been noticed after 1995, which is anindication that Pakistan has ceased to bea producing country. Drugs illegallyimported from Afghanistan for domestic
consumption and export to foreigncountries are, however, intercepted
regularly. Due to the stringent measuresof enforcement agencies, Afghan drugtraffickers are now diverting their illicit
exports through Central Asian States
instead of using Pakistan as transit
conduit.
D. Two Recent Interesting Cases
The details of two interesting cases ofdrugs seizure are attached at Appendix A
and B.
E. Seizure of Assets of Drug Barons
After years of international struggle, it
has been concluded that only way to combat
drugs is to control drug money launderingand to seize drug assets. In Pakistan, theconcept of forfeiture of assets dates backto 1977 and our Prevention of Smuggling
Act 1977, deals with it at length. Assets
can be forfeited if acquired through theproceeds of the smuggling of narcotics.
These assests could be in the name of thesmuggler or any other person on theirbehalf. The law was also applicable toassets held outside Pakistan. The burdenof proof was not on the prosecution, theonus was on the defendant. The seizure ofassets has become easier after the CNSA
1997, through which money laundering has
also been made a criminal offence.
The Anti-Narcotics Force has frozen
assets worth Rs. 3612.92 million (US $ 82.1
million) of 60 notorious drug traffickers in
the country. Prominent names among thesedrug traffickers are Mirza Iqbal Baig, Haji
Ayub Afridi, Anwar Khattak, Ashraf Rana,
Dawood Jat, Fahim Babar, Sarder Gujar
and Munawar Manj. Out of these, assets
worth $181 million belonging to Haji Ayub
Afridi have been forfeited under court
decision. Dawood Jat, a notorious crosscountry drugs smuggler, also surrendered
recently due to relentless ANF pressure,and is now on bail.
F. Extradition of Drug Pushers
Pakistan extradited major drug barons
like Haji Mirza Iqbal Baig, Muhammad
Anwar Khattak, Tariq Butt, Khawaja
Abdul Majeed, Hafeez-ur-Rehman,
Zulqarnain Khan, Misai Khan, Khalid
Khan, Taviz Khan, Shahid Hafeez
Khawaja, Muhammad Saleem Malik andMain Muhammad Azam, while cases ofothers are being judicially scrutinized by
the Interior Ministry. Haji Ayub Afridi also
surrendered to the USA, in the UAE, due
to ANF pressure.This was made possible
only because Pakistan already had theeffective Extradition Act 1972, long before
the need was stressed in the UN convention
against Illicit Trafficking in Narcotic Drugs& Psychotropic Substances 1988. Pakistan
also has extradition treaties with 25
countries. Moreover extradition ispermissible even to non-treaty states on amutual basis. The present position of
extraditions for drug traffickers is:
Extradited
Pending in courts
To be arrested
Total

14
11
2
27

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RESOURCE MATERIAL SERIES No. 54
G. Mutual Assistance Laws andInitiatives
It is true that the drug menace can not
be tackled - because of its transformation
into a transnational phenomena - without
the mutual assistance of the affected
countries. Simple exchange of information
can lead to substantial success. Timely
intimation from Drug Enforment Agencies(DEAs) regarding the seizure of 6,660 kgs
of hashish at Antwerp, Belgium, led to thefurther seizure of 5,980 kgs of hashish from
Islamabad by the ANF. Details of the caseare Appendix A and B. The UN convention
against Illicit Trafficking in Narcotic Drugs
and Psychotropic Substances 1988,
stressed the need for mutual assistance on
a reciprocal basis. A model mutual
assistance treaty was also adopted in 1990
by the UN General Assembly.
In pursuance of the 1988 Convention,
Pakistan added a full chapter on mutual
assistance in the Control of Narcotic
Substances Act 1997 (refer to chapter VIIIof the Act). In the presence of thissubstantive law, there is little need fortreaties, however, friendly countries still
enter into protocols for special assistance.
H. Recent International Initiatives
Undertaken by Pakistan(a) UN International Drug Control
Programme sponsored the PakIran
Border Electronic Monitoring Project
aimed at checking the flow ofnarcotics across the Pak-Iran border.
Proposed to be extended to Afghanborder.
(b) Pak-India cooperation inn drug
related matters.
(c) Memorandum of understanding with
Kazakhastan.
(d) Agreements to make joint efforts forcontrol of drug trafficking have beensigned with United Arab Emirates,
China, Uzbekistan, Kyrghistan andRussia.

156(e) Agreements with Saudi Arabia maysoon be signed.
(f) Agreements envisaged with several
other countries.
(g) Two helicopters have been provided
for the ANF by the UK, to augment
drug interdiction in Baluchistan andthe coastal areas of Sindh.
I. Controlled Deliveries
Besides the US Drug Enforcement
Administration (DEA), the following
Governments have posted their Drug
Liaison Officers in Pakistan: Australia,
Britain, Canada, France, Germany, Iran,
Italy, Netherlands, Norway, Saudi Arabia
and Turkey. Their main function is toexchange information expeditiously inrespect to narcotics offenses committed by
Pakistani nationals in their countries,
where the narcotics originated from
Pakistan or were transmitted throughPakistan. The Anti-Narcotics Force ineither case provides a timely two way
exchange of drug related intelligence andassists them in those investigations. Also
controlled deliveries are being arranged
with the cooperation of these Drug Liaison
Officers, to eliminate international druggangs operating in Pakistan or in theircountries for the control of drug trafficking.
The controlled delivery means thetechnique of allowing illicit or suspectedconsignments of narcotic drugs or
psychotropic substances to pass out
through or into the territoy of one or morecountries-with the knowledge and under
the supervision of their competentauthorities-with a view to identifying
persons involved in the commission of
offenses established in accordance with
Article 3, Paragraph 1 of the United
Nations Convention against Illicit Trafficin Narcotic Drugs and Psychotropic
Substances 1988. Therefore, in pursuanceof the above, during 1996, 23 requests ofcontrolled delivery operations werereceived from the following countries:

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
Australia (1), Canada (2), Germany (1),Kuwait (3), UK (13), & USA (3). A total 62
kilograms of heroin was exported throughthese operations. However, the results of
only 2 controlled deliveries have been
received. Those successfully culminatedwere in the United Kingdom, where 9
persons have reportedly been arrested.
Other operations are under progess.
V. MONEY LAUNDERING
There has always been a parallel
economy in Pakistan, whatever thefinancial system may be. We can call it a‘black economy’, ‘underground economy’ or‘shadow economy’ which challenges theregular financial channels. Changing
values have created a lust for easy money
which, of course, is often contrary to law.
Money earned out of the (legal) systems
cannnot be declared as taxable, therefore
it is either kept hidden or it is laundered
to appear legitimate. ‘Money laundering’covers all procedures to change the identityof ill-gotten money so that:(a) it appears to have originated from a
legtimate source;(b) to conceal the true ownership andorigin of the money; and(c) to put the proceeds beyond the reachof the authorities.
There is no one method of laundering
money. Methods can range from thepurchase and resale of a luxury item (e.g.
a car or jewellery) to passing money
through a complex international web oflegitimate businesses and ‘shell’companies. Initially however, as in the caseof drug trafficking, the proceeds usuallytake the form of cash which needs to enter
the financial system by some means. Street
level purchases of drugs are almost always
made with cash. Despite the variety ofmethods employed, the laundering process
is accomplished in three stages which may

comprise of numerous transactions by thelaunderers that could alert a financial
institution to criminal activity:(a) Placement: The physical disposal of
cash proceeds devived from illegal
activity.
(b) Layering: Separating illicit proceedsfrom their source by creating complex
layers of financial transactions
designed to disguise the audit trail
and provide anonymity.
(c) I n t e g r a t i o n : T h e p r o v i s i o n o fapparent legitimacy to criminallyderived wealth. If the layering
process has succeeded, integration
schemes place the laundering
proceeds back into the economy insuch a way that they re-enter thefinancial system appearing as normal
business funds.
These three basic steps may occur as
separate and distinct phases or they may
occur simultaneously or, more commonly,
they may overlap.
Certain points of vulnerability have been
identified in the laundering process, which
the money launderer finds difficult to
avoid, and where their activities are,therefore, more susceptible to being
recognised:(a) entry of cash into the financial
system;(b) cross-border flow of cash; and(c) transfers within and from thefinancial system.
Thus efforts to combat money
laundering largely focus on those points inthe process where the launderer’s activities
are more susceptible to recognition. These
have therefore, concentrated to a large
extent on the deposit taking procedures ofbanks and building societies in theplacement stage.

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RESOURCE MATERIAL SERIES No. 54
A. Combatting the Menace
The U.S.A. was the first major country
which initiated legislation in 1970 andbegan to plug some of the loopholes in thebanking system. The Bank Secrecy Act of1970 required all banks to report cashtransactions of more than $ 10,000 per day
and demanded that all individuals taking
more than $ 5,000 in cash across borders,
submit currency reports. Still, few banks
took little more than passing notice of these
new regulations, and some bankers weredelighted to break large deposits into lotsof $9,900 to avoid the reporting
requirements. It took 16 years for the U.S
government to crack down on such
avoidance. In 1986, Congress made it aseparate federal crime to avoid thereporting requirements of the Bank
Secrecy Act of 1970. Moving cash in andout of U.S banking institutions became anincreasingly high-risk operation.
The International Convention (theUnited Nations Convention against Illicit
Traffic in Narcotic Drugs and Psychotropic
Substances in 1988) seriously addressed
the need to attack the international
problem of drug money laundering and theforfeiture of drug assets. The international
community resolved to deal with the
problem in an effective manner withcollective will and cooperation. A soundfoundation for a viable international
mechanism to grasp and control theincreasing menace of drug money was laid.
It mandated that all signatory States
criminalize any activities connected withmoney laundering. Since 1990, when thisConvention came into effect, a large
number of countries have ratified theConvention. Many States have legislated
new laws, or have amended the existingones, and have introduced regulations to
implement money laundering countermeasures. Some countries have gone a stepfurther and adopted the recommendations
made by the Financial Action Task Force158

of the ‘Group of Seven’ which go beyond thescope of the 1988 Convention. Quite a few
countries have enacted laws and haveentered into treaties stipulating specificprocedures to facilitate and promotemutual legal assistance, in accordance withthe provisions of 1988 Convention
Concerning Drug Trafficking, money
laundering and assets forfeitureinvestigations. As a result of joint drug
assets forfeiture efforts, countries like theU.S, Canada, U.K, Switzerland, Colombia,
Venezuela, Paraguay, Guatemala, Costa
Rica, Cayman Islands, Argentina, Egypt
and Bahamas have shared the value of
forfeited assets amounting to about USD$87 million up to December 1993.
The United Nations International Drug
Control Programme (UNDCP) in its 1997
over-view in the World Drug Report has
observed the following trends/issues inmoney laundering:(a) The need to legitimize ill-gotten gains
has grown in proportion to both the
expansion of the illicit drug industry
and to the propensity of criminals to
operate in the legitimate businessworld.
(b) Two trends have characterized money
laundering in recent years. The firstof these is the increasing
professionalization of the industry.
The internationalization of money
laundering is the second major trend,and has been brought about by two
factors: the integration of financial
markets into a complex, global,
entity; and the efforts by traffickers
to avoid detection by concentrating
operations in countries where
enforcement is weak and legislation
is absent or embryonic.
(c) The above recent developments innational and international areas
have created a favourable climate fordrug traffickers, smugglers, tax

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
evaders and other corrupt elements
to launder their ill-gotten proceeds
increasingly through domestic formal
and informal financial institutions.
The magnitude of the problem
indicates that the challenge isformidable, and the responsibilities
immense, and if needs an all out
effort from all affected fields tocombat this menace. An integrated
enforcement programme whichembraces in its fold not only thearrest of traffickers and theinterdiction of drugs, but also theconfiscation of assets as well as anarrest of the growth of money
laundering, thereby establishingintegrity in financial institutions andthe credibility of the economic
system.
B. Pakistan Experience
In the past, some developments havecreated conditions which were conducive
for money laundering in Pakistan. There
was an exodus of a large number ofPakistani workers abroad in the early
1970s who, for sending their foreign
remittances to their families, often relied
on non-formal banking facilities orunderground bank-like channels. Later,
the same channels were used bybusinessmen and industrialists to taketheir capital/payment abroad due to strict
foreign currency regulations; thus
spawning a reliable, discreet and illegal
alternate banking system which remained
the preferred mode of banking for criminal
elements in Pakistan.
As discussed earlier, large scale domestic
heroin addiction created a booming market
within Pakistan. A UNDCP study
estimated the market volume at Rs. 35
billions (USD $ 1.2 billion). Obviously, thisblack economy created a number of drugbarons, who had to resort to money
laundering for ‘whitening’ their wealth.

This process was further intensified whenthese drug barons joined hands withinternational syndicates and money
laundering gained a transnational status.
A UNDCP’s report titled “The Illicit Opiate
Industry of Pakistan” estimated the turnover of the Pakistan’s heroin industry to
be 5% of the 1992-3GDP and 20-25% of thetotal estimated ‘shadow’ or ‘parallel’economy. The validity of the UNDCP’sreport estimates were later seriously
questioned/contested by Pakistan
authorities and economists. However one
thing is very clear, that Pakistan’s domestic
heroin trade generates considerably large
profits which are presumed to be launderedby criminals through formal and nonformal banking systems. The study
estimates that drug export revenues wereabout USD$ 950 million in 1985, andincreased to USD$ 1.6 billion in 1990. Drugearnings estimated in 1992 at USD$ 1.8
billion include a significant amount ofwithdrawals from overseas bank deposits
built up in previous years. Drug earnings
averaged USD$ 1.0 billion in the period
1985-91.
Is late 1980s, Pakistan (like many otherresource-deficient, developing countries)
had to liberalize the economy throughderegulation, to create a conducive
environment of savings and investments.
In this regard, the government of Pakistan
promulgated the Economic Reforms
Ordinance 1992 to attract foreign exchange
held by its citizens abroad. Although thislaw was designed to attract illegally
stashed foreign exchange back to Pakistan,
this law provided protection to the sourceof foreign exchange accounts from being
questioned by the tax authorities inPakistan. However, law enforcement
agencies could still investigate the sourceof such accounts in the case of reasonablesuspicion of involvement of the accountholder in drug trafficking.

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RESOURCE MATERIAL SERIES No. 54
C. Principal Sources of Illegal
Proceeds
In Pakistan, the main sources of illegal
proceeds are as follows:(a) D r u g Tr a f f i c k i n g : A s e a r l i e r
mentioned, Pakistan has a very
serious drug abuse problem which
has spawned a large domestic drug
market, accruing significantly large
profits to the drug peddlers and drugbarons. Mainly, it is the proceeds fromthe domestic heroin trade whichforms the major part of money
laundering in Pakistan. In addition
to this, a considerable part of the drug
proceeds must be coming from abroadto Pakistan, although most of it finds
its way to various tax havens aroundthe world.
(b) S m u g g l i n g o f C o n t r a b a n d : I n
Pakistan, despite its best efforts toroot out the evil of smuggling,
considerable smuggling ofcontraband still takes place. This
usually includes luxury goods,
electonic appliances, gun runningand gold smuggling. The proceedsfrom smuggling are one of the major
sources of black money in Pakistan.
(c) Organized Crime: Organized Crime
like gambling, counterfeiting,cheating, car theft, bank robber andabduction for ransom are also sourcesof Pakistan’s black economy.
(d) Criminal Malfeasance in Public andPrivate Sector: Proceeds from corrupt
practices, fraud or criminal
misappropriation in the government/
public, commercial, banking andcorporate sectors also contribute toblack economy of Pakistan.
(e) Evasion of Taxes and Duties: Theproceeds acquired by dishonest
citizens/entrepreneurs by avoiding
taxes and duties from various sectorsof economy also contribute toward theblack economy.

160

D. Principal Money Laundering
Methods
The principal money laundering
methods detected or suspected in Pakistan
are as follows:(a) Hawala/Hundi.
(b) Bearer Investment Schemes.
(c) Investment and Speculation in Real
Estate.
(d) Expenditure on Luxury Goods.
(e) Over/Under Invoicing of Imports andExports.
(f) Bogus Imports/Exports.
(g) Loan Bank Methods.
(h) Prize Bond Racketeering.
(i) Smuggling of Currency.
(j) M o n e y S h o w n a s P r o c e e d s o fAgriculture or Poultry.
Among these methods, ‘Hawala’ remains
te preferred mode of money laundering inPakistan. Users of Hawala services include
non-resident Pakistanis working abroad,sending hard earned money to their familes
back home; parties indulging in criminal
activities ranging from smuggling ofcontraband to all types of money
laundering; and organizations having anexus to terrorist activities. Obviously theobjectives of these users are different, while
legitimate in one case, criminal and evenanti-state in others. Some of the reasonsare:(a) In case of Pakistani expatriates
sending money to Pakistan, thereasons include a time tested
confidential system which is efficientand convenient for the parties at bothends. It hardly involves any formal
documentation unlike the banking
system, which becomes cumbersome
for the semi or un-educated person.
The “Hawala” dealer, like a goodbusinessman, also offers a better rateof rupee conversion, being thedifference of the official and theprevailing market rate, which may

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
range from 5-10% on account ofhigher demand of hard currencies.
Yet another reason is the lack ofbanking facilities in the remote areasfrom where most of the Pakistani
expatriates hail. Deregulation offoreign exchange controls since 1992
(after the introduction of Protectionof Economic Reforms Act in Pakistan)
have not affected the preference forthe “Hawala” system on account of
the aforementioned reasons against
the formal banking system.
(b) Criminal organizations prefer thissystem for laundering their money, as
well as making payments to theconcerned parties in Pakistan orabroad. Their preference is basicallyon account of the anonymity affordedby it due to little formal
documentation involved, leaving nopaper trail. Obviously the use offormal international banking
systems for conducting illegaltransactions/trading is fraught withgreat risks of being traced andconnected to unlawful activities, evenat a later stage. The “Hawala” system
therefore suits the criminal/drug
mafia not only for laundering theirdirty money, but also for settling
financial claims in connection with
their illegal trading and smuggling,
without running the risk of being
detected. However, it is pertinent tomention that taking advantage ofbank secrecy provisions, and theabsence of suspicion/cash
transactions reporting requirementsin the past, resulted in drugtraffickers also using formal banking
channels for the transfer of funds.
The “Hawala” operators, now, after
the deregulation of foreign currency
accounts by Pakistanis and the freemovement of foreign exchange to/out
of Pakistan without questioning, aretaking full advantage of the change

in law and policy to promote theirbusiness. Without fear of being
questioned, they are using foreign
currency bank accounts opened inlocal banks to receive funds frominterested parties, for payments todesignated parsons in Pakistan.
Instances have come to notice wheresome authorized money changers,
maintaining foreign currency
accounts in their own names or someother person, have helped drugtraffickers receive payments of drugmoney from abroad.
(c) An other category of “Hawala” systemusers are the smugglers of consumer
goods and arms dealers. On accountof higher tariff rates on importable
goods and restrictions imposed on theimport of arms, the black market of
smuggled goods keeps the demand forforeign exchange for payments
abroad constantly at a higher pitch,thus making hard currencies more
expensive in the currency market, as
compared to the official sources.
E. Relationship Between Hawala
System & Drug Trafficking/Gold
Smuggling.
The Hawala bankers, in addition to large
scale money transactions, are also
indulging in gold smuggling. Reportedly,
gold worth billions of dollars was being
smuggled from UAE, Hong Kong andSingapore into Pakistan and India. Muchof the smuggled gold through this system
can be linked to narcotics trafficking.
Subsequently, liberalization in the gold
importation policy announced by theGovernment of Pakistan in the early 1990s
was aimed at reducing the significant
capital affiliated with the Undi or Hawalasystems and to secure foreign exchange.
Presently, Dubai is the main centre forMiddle Eastern and South Asian gold
smuggling networks. Most of the gold
imported in Dubai, comes from Swiss

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RESOURCE MATERIAL SERIES No. 54
Banks and metal dealers in London. The
Hawala/Hundi systems facilitate the gold
trade and smuggling activities in the
Middle Eastern and South East AsianRegions. According to one estimate, 99
percent of gold purchased in Dubai is
obtained through Hundi/Hawalatransactions. It was also reported in an
INTERPOL conference held in 1991, that
if gold and silver smuggling in stopped, 80
to 90 percent Hundi/Hawala transactions
would automatically cease. Moreover,Hundi/Hawala systems provide the hardcurrency to broker’s need to finance goldpurchases and smuggling operations.
F. Bearer Investment Schemes
The bearer investment schemes,
introduced by the government in the lasttwo decades, conveniently provided theopportunity for exploitation for money
laundering purposes. These schemes are:(a) Bearer National Bond Fund (nolonger operative).
(b) F o r e i g n E x c h a n g e B e a r e r
Certificates (FEBC).
(c) NIT Bearer Units.
(d) WAPDA Bearer Bonds.
(e) Bearer Certificates of Investment/
Growth Certificates.
(f) Bearer Certificates of Deposits.
(g) Foreign Currency Bearer Certificates(FCBC).
(h) Prize Bonds Schemes of various
denominations for Rs. 50, 100, 500,
1000 and recently introduced Prize
Bonds of Rs. 10,000 and 25,000.
The government was moping up somerevenue from these beasrer investment
schemes by imposing tax ranging from 1%
to 7.5%, which may be described as the costof laundering black money. Bearer bonds/
certificates found in the possession of drugtrafficker or their associates are still liable
to forfeiture under the law.

162

G. Government of Pakistan’s
Measures to Control Money
Laundering.
The Government of Pakistan, due to theworsening drug situation, has taken
several legal, administrative and policy
measures not only to counter money
laundering but also to forfeit assets
acquired through drug trafficking and thesmuggling of contraband goods. In
pursuance of the 1988 UN Convention, towhich Pakistan was a signatory, theControl of Narcotics Substance Act (CNSA)
1997 (previously an ordinance of 1995) was
promulgated, effectively putting animpediment on freely practiced money
laundering, particularly for drug proceeds.
It is the first time that money launderinghas been declared a crime and the reportingof suspicious transactions by the banks andfinancial institutions has been madeobligatory in this substantive law (refer sec.
67-69 of the Act). Section 67 (2) provides
imprisonment for up to three (3) years if
there is a failure to supply information. The
State Bank of Pakistan (the Central Bank)
has also issued the ‘Required Prudential
Instructions (1989) and Regulations (1992)
to the banking sector. In contrast to USA
laws there is no lower limit for reporting
suspicious transactions, which eliminates
the loophole of breaking the transactions
in smaller parts. The State Bank has also
agreed, in principal, to bring all types offinancial institutions/corporate sectors,
including money changers/stock markets,within the purview of money laundering
laws and regulations. The State Bank has
already issued guidelines to non-banking
financial institutions for preventing theirinvolvement in the money laundering
activities of other unlawful trades.
Regarding money changers, it is relevant
to mention that as part of exchange control
reforms, Pakistani nationals and residents,
Pakistani companies/firms have been
granted licences to act as authorised money

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
changers (AMC). These licences are issued
strictly in accordance with the procedureand conditions laid down by the State
Bank. These conditions aim at making
AMC’s business transparent and forhelping in identifying transactions.
Under section 12 and 13 of the CNSA,
acquisition and possession of assets derived
from narcotic offenses has been madepunishable with up to 14 years of
imprisonment, plus fine and forfeiture of
drug money.
Although Pakistan is already extending
legal assistance to requesting countries forcarrying out investigations in the field of
drug trafficking/money laundering, theGovernment of Pakistan, included in the
CNS Act 1997 a separate chapter on
mutual legal assistance. At the moment
Pakistan has not yet entered into mutual
legal assistance treaties with othercountries.
In 1994, the Government of Pakistan
discontinued Dollar Bearer Certificates in
Europe and America for the primaryreasons that these certificates could havebeen conveniently used for money
laundering.
VI. CONCLUSION
From the above discussions it is clearthat transnational organized crime can not
be fought without developing transnational
combatting strategies. That is why thisissue has been taken up at the UN orinternational level. Numerous
deliberations have resulted in the present
state of awareness about this everincreasing menace. Still, the community of
the world is lacking in its efforts to matchthe advancements being made by crosscountry outlaws. We have already seen that
the UN is just an advisory institution andcan not interfere with the sovereignty ofStates. Some recommendations made may
be considered as such interference by someStates, because of their own internal
political and financial circumstances.
However such states must consider that in
the long run they might be the losers.
Pakistan, as we have seen in previous
section, has honoured its commitment to
all the international conventions to which
it is a signatory. Enactments/actions may
have been a bit late, but these are still astep ahead of the international response.
The following are worth mentioning inregard to Pakistan:(a) We have reduced poppy cultivation toalmost “zero”.
(b) Due to the non-production of opium,
Pakistan has become an importing(illicit) country to fulfil the demandof its 1.52 million addicts.
(c) Effective crack downs by law
enforcement agencies have compelled
the change of route from Pakistan to
the Central Asian States.
(d) Punishments for drugs have been
made harsher.
(e) Pakistan is liberal in extraditions. We
have Extradition Treaties with 25
countries, and extradition is still
possible with non-treaty States.
(f) Special emphasis has been placed on
mutual assistance and particularprovisions have been made in thesubstantive/procedural laws.
(g) Laws for the forfeiture of ill-gotten
assets are more effective then therequired international standards.
(h) M o n e y l a u n d e r i n g h a s b e e nconsidered as a distinctive crime andlegal provision and prudential
regulations have been promulgated.
(i) A fund has been established torehabilitate drug addicts.
(j) Anti-narcotics agencies have beenstrengthened, despite financial
restraints.
(k) Constitution of Special Courts for
Drug Offences would go a long way

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RESOURCE MATERIAL SERIES No. 54
for speedy justice.
(l) Promulgation of Control of Narcotics
Substances Act 1997 would be alandmark in the control of drugs.
Despite all of the above steps, we still
feel handicapped in or efforts to combat
transnational organised crime. Decreased
poppy production in Pakistan has beencountered by a reciprocal increase in
Afghanistan, which means that there ishardly any difference in supply (except thesource). So we have to concentrate now on
demand reduction. The National Fund for
Drug Abuse Control has been set up, but
due to financial restraints, the required
results are difficult to achieve.
International aid agencies should now takestock of the situation and sufficient funds
should be provided to augment the Fund.
A consortium may be established for
coordinating aid programmes.
A sound foundation has been laid by the
Vienna Convention of 1998 to build a viableinternational mechanism to control thelarge scale international money launderingof illicit drug traffickers, throughpreventive measures and enforcement by
the forfeiture of drug assets. There isevidence that drug trafficking
organizations frequently make use of
territories of countries:(a) t h a t a r e n o t p a r t i e s t o t h einternational drug control treaties;(b) t h a t h a v e f o r m a l l y r a t i f i e dconventions without implementing
their provisions;(c) that suffer from civil war, terrorist
activities, political instability, ethnic
conflict, economic depression or social
tension;(d) that are not in a position to ensure
government control over some partsof their territories; and(e) that are not able to maintainadequate law enforcement, customs

164

and pharmaceutical control services.
Drug traffikers also seek out countries
and territories with weak central banks,
restrictive bank secrecy practices andlimited control on foreign exchange.
Although there are many extradition
treaties and mutual assistance agreements
between different countries, there are still
pockets where no extradition treaties exist,
and the drug pushers make full use of this.
Similarly, despite the adoption of model
mutual assistance treaty by the UN, there
has not been a sufficient response from thesignatory countries.
The desired objective of completely
stopping money laundering can not be
achieved unless a further measure of
requiring banking and financial
institutions to examine the origin of adeposit, and commercial activity
generating it, before it is accepted, isuniversally adopted. Illicit funds must be
stopped before entering the internationalbanking system.
VII. RECOMMENDATIONSIn the light of the discussion on problem
areas, the following recommendations are
made to effectively deal with international
money laundering and the enforcement offorfeiture of drug assets:(a) There is need to educate and sensitize
national governments to the evil
effects of drug money and theuniversal need to combat it by the
adoption of stringent countermeasures through domestic policy onmoney laundering, as well as offering
meaningful cooperation andassistance to a regulatory body (to beestablished, if not existing) and law
enforcement agencies.
(b) The issue of the lack of universal

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
adoption and enforcement of viableanti-money laundering provisions,contained in the UN Convention of1988 and supplemented by therecommendations of Financial Action
Task Force (FATF), must be seriously
addressed by all affected nations of
the world. A mechanism ofpressurizing the non-signatory, as
well as signatory but non conforming,countries through economic andfinancial sanctions should be
developed and adhered to as a matterof policy under the umbrella of theUnited Nations. One such action
could be black listing the defaulting
nations/banks and withholding
international loans/aid to them; in
addition to stopping the handling of
any transactions originating or
passing through black listed nations
whose banks are prepared to handle
illegally accumulated funds. These
pressures could be applied by the loan
giving countries, with the blessing of
the United Nations.
(c) In order to ensure uniform andregular enforcement of various antimoney laundering provisions in thebanking, financial and commercial
sectors, there is need to create a true
multi-national banking, financial andcommercial regulatory body. Thisbody should be empowered to inspectand ensure compliance of the various
counter-money laundering
provisions. Within each country also
an effective central body comprisingof banking experts, charteredaccountants and law enforcement
personnel should be charged with the
responsibility of inspecting andensuring the implementation of thevarious anti-money laundering
provisions adopted under the local
state laws.
(d) Equally important is the pressure
from the client countries andimportant depositors in internationalbanks, who must insist that they will
not do business with instututions
that fail to adhere to the new toughinternational reforms on examining
money sources.
(e) Law enforcement agencies operatingin countries who are just beginning
to initiate assets forfeitureinvestigation, under newly enacted
legislation, lack the necessary
expertise. Extensive training
programmes covering intelligencegathering, financial investigation
techniques involving local and foreign
jurisdictions, and prosectution
aspects must be initiated incooperation with the UNDCP andother such internationalorganizations. The launching of joint
financial drug assets investigations
by various national law enforcement
agencies, for better cooperation andco-ordination to trace drug assets forforfeiture, could prove to be very
rewarding, especially for the lessexperienced enforcement agencies.
(f) Regular exchange of intelligencereports/data on transnational drug
cartels, their modus operandi andtheir money laundering networks
should be ensured.
(g) An international fund of forfeited
drug assets may be set up, which may
receive fixed percentage of all
forfeited assets from all concernedcountries. This fund should be
utilized to:• develop well researched
intelligence database oninternational drug trafficking andmoney laundering organizations,
their assets, bank accounts andother relevant information on
their criminal activities;• to set up an efficient
communications network between

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RESOURCE MATERIAL SERIES No. 54
drug enforcement agencies in all
countries, to enable them to makeuse of this database in their day
to day operational work;• to design and conduct various
courses at the regional level for
improving the professional skillsof the intelligence, investigativeand prosecution personnel of thelaw enforcement agencies.
APPENDIX ACASE NO. 1 - RECOVERY OF
6660 KG HASHISH AT ANTWERP,BELGIUM (AUGUST, 1996)
5980 KG HASHISH AT ISLAMABAD(AUGUST, 1997)
In August 1996, customs officials of
Belgium confiscated a container sent from
Karachi containing household effects fromwhich 6660 Kg hashish was recovered. The
hashish was hidden in the personal luggageof an Egyptian diplomat, Muhammad
Salah Sadiq, who was transferred from
Islamabad. The luggage was being shifted
to Switzerland, where the daughter of the
diplomat was residing. The information
was received by the Government ofPakistan through the Drug Enforcement
Agency of USA. The Anti-Narcotics Forcestarted the enquiry discreetly. It came tonotice that the consignment was sent by
one Kamran Gul, Managing Director of
Total Cargo Company, Islamabad. On
receiving the information of the hashish
capture in Belgium, Kamran Gulregistered a report in a Islamabad police
station stating that the documents relating
to the container were stolen and some otherperson, misusing those documents, shippedthe container. Infact the report was
registered by Kamran Gul to save himself.
Kamran Gul had actually sent the hashish,after proper plannning, taking advantage
of diplomatic immunity. His gang was
operating transnationally and the following
persons were the members of his gang:

166

i)

Mehmat: He is a resident of Turkey andalso holds citizenship of Holland. He
was the financier of the gang. He cameto Islamabad and stayed at the Holiday
Inn Hotel where he settled thesmuggling details.
ii) Kamran Gul: He was the Managing
Director of Total Cargo Company who,along with his two workers Gul Afsar
Khan and Mohsin Khalid, arranged thepacking and subsequent despatch
through the company.
iii) Muhammad Javed Baig: He belongs to
Peshawar and procured the hashishfrom Afghanistan. He also arranged its
safe transit from Afghanistan toIslamabad.
iv) Arshad: He is a Pakistani and wasliving in Holland. He was the organizerof this narco-gang.
The Anti-Narcotics Force of Islamabad
kept close watch on the activity of Kamran
Gul secretly. It came to notice that Kamran
Gul was again trying to despatch a large
quantity of hashish in the personal effects
of some diplomat. After 7 to 8 months ofsurveillance, 5980 kg hashish wasrecovered from his wharehouse inIslamabad which was kept in 46 blue
coloured plastic drums. The Anti-Narcotics
Force registered the case and Kamran Gul,
Gul Afsar and Mohsin Khalid werearrested. The case has been sent to courtfor prosecution, where it is still pending.
Muhammad Javed Baig absconded, while
requests have been made to Turkish andDutch Governments for the arrest of
Mehmat and Arshad. After the arrest of
Kamran Gul it was disclosed that thehashish was brought from Afghanistan in
the “Ilaqa Ghair” (Tribal Area), from where
it was transported to Islamabad through aspecially made oil-tanker. The hashish was
kept in a warehouse for three months. The
warehouse was obtained at a monthly rentof USD$ 1000. The consignment was again

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
shifted to another (lower rent) premises
from where it was recovered.
APPENDIX BCASE NO.2 - RECOVERY OF 26 KG
HEROIN FROM ISLAMABAD
INTERNATIONAL AIRPORT AND
HOLIDAY CROWN PLAZA HOTEL,KARACHIThe proverb “where there is will, there
is a way” was proved right by the AntiNarcotics Force when, in November 1996,
26 Kgs of heroin was seized from IslamabadInternational Airport and the Holiday
Crown Plaza Hotel, Karachi. As a result of
the seizure, three African nationals,
belonging to the Sudan and Zaire, werearrested. The ring leader was a Sudanesenational, based in Nairobi, by the name of
Tariq Hji Idris. The others, a woman, Hullu
Kyamuno and a man, Ali Kaita, were justcarriers who were promised USD $ 2000
for the successful trip, excluding hotel stay
and air tickets. Mr Ali Kaita was travelingon a forged Zairian diplomatic passport andan interesting aspect was that the passport
was in the name of a lady, Isankunya Fitila,
which was written in French and the
Immigration Officials at the Airport were
not able to discern that it was a female
name. Once Mr Ali Kaita arrived at
Islamabad International Airport to fly to
Karachi, he was accompanied by Tariq Haji
Idris. When Tariq Hji Idris sensed danger,
he left Ali Kaita and boarded the flight for
Karachi. Later 13 Kgs of Heroin wasrecovered from the suitcase of Ali Kaita.
Ms Hullu who had come to airport earlier,successfully boarded the aircraft along withthe drugs. Ali Kaita was interrogated on
the spot and he disclosed that Tariq Haji
Idris had given him two suitcases and he
did not know what was in it. One thisinformation, the ANF and ASF (Karachi)
were alerted. The moment Tariq Haji
landed at Karachi Airport he was taken

into custody by ASF and handed over to
ANF Karach. Search of his person led to
the recovery of USD$ 22,000. By then, ANF
Karachi and ANF Islamabad had noknowledge of Ms Hullu being third memberof the gang. Mr Tariq Haji was later
brought to ANF Islamabad forinterrogation. It was during the course ofinterrogation that Ali Kaita and Tariq Haji
disclosed information about Ms Hullu
being their third partner. It was too late toarrest Ms Hullu as quite some time hadlapsed in the interrogation process, and it
was expected that Ms Hullu, along with thedrugs, must have left the country. Anyway,
an effort was made by ANF to trace her
and an officer was sent to karachi to findMs Hullu. While going through the FIA
immigration record, it was learnt that Ms
Hullu had left the country a few days prior.
The investigating officers traced the last
address of Ms Hullu in Pakistan, which
was the Holiday Crown Plaza Hotel,
Karachi. On reaching the Hotel it was
found that the woman left behind two large
suitcases and had told the Hotel
Administration that she would be
returning to collect them later. The twosuitcases were taken into custody andbroke open by ANF officers in the presenceof the Hotel staff, and another 13 Kgs of
Heroin was found. The hotel staff were
instructed to inform ANF wheneversomeone came and asked for the suitcases.
Suddenly, after a few weeks, the Hotel staff
found Ms Hullu asking for suitcases. She
had come back from Nairobi, along withher boyfriend, to get them. She wasarrested and sent to jail. The boyfriend
however, was not found to be involved in
the drugs business and was therefore
released.

167

RESOURCE MATERIAL SERIES No. 54
TABLE 1PROGRESSIVE PUNISHMENTS ACCORDING TO THE CONTROL OF
NARCOTICS SUBSTANCES ACT 1997.
Quantityof Drugs
Recovered(not to scale)
1000g
(1kg)
200g

100g

10g

0
Drug
Type

HeroinCocaineOpium derivative
Coca derivative
0-2 Years with fine
3-7 Years with fine
Death or life term with fineof Rs.1 million or more

168

Opium
Coca leaf
Other psychotropic
substances

Any other narcotic
drug or controlled
substance nototherwise specified

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERSTABLE 2
GOVERMENT OF PAKISTAN

Ministryof Narcotics
Control

Ministryof
Defence

A.N.F

A.S.F

MinistryofInterior

Ministryof
SAFRON

MinistryofFinanceF.C

C.B.R
Customs

F.I.A

F.C
Balochistan

F.C
N.W.F.P

Rangers

Coast
GuardsPROVINCIAL GOVERNMENTS

Excise &Taxation

A.S.F
A.N.F
C.B.R
F.C
F.I.A
N.W.F.PSAFRON

PolicePolitical Levies
Khasadar Force

Airport Security Force
Anti Narcotics ForceCentral Board of Revenue
Frontier Constabulary/Frontier Corps
Federal Investigation Agency
North West Frontier ProvanceStates & Frontier Regions

169

170

30
0
12
8
2
254
3
0
1
1590
0
36
1

1937

Total

No.of
Cases

A.N.F
A.S.F.
BALOCHISTAN F. CORPS
COASTAL GUARDSCUSTOMSEXCISE
ISB.POLICE
N.W.F.P F. CORPSPOLITICAL AUTHORITIESPOLICEPUNJAB RANGERS
RAILWAYS POLICESINDH RANGERSAGENCIES

1998 6448.048

27 1033.795
00.000
1 3114.300
11 167.552
4 261.100
251 187.349
2
1.045
0
0.000
0
16.0001656 1619.841
0
0.000
41
10.816
5
6.250
11972

119
10
14
8
318
1045
13
1
1
10331
1
108
1

Qty.
No.of No.of
Seized Defend. Cases

OPIUM

868.422150.773782.23075.707495.324140.151
3.333
36.60060.000801.0190.030
20.830
0.500
123
6
17
16
18
822
32
0
0
20746
0
178
3
22122 92322.537

179 21802.463
6
1.785
3 2239.075
14 4217.800
29 39485.790
832 4807.962
37
34.963
0
0.000
0
0.000
20870 19633.965
0
0.000
100
71.43427.300
127

1
0
0
0
0
11
0
0
0
99
0
16
0

Qty.
No.of No.of
Seized Defend. Cases

CHARAS

11942 413.859 121961

163
10
2
10
102
1047
14
1
5
10475
1
108
2

Qty.
No.of No.of
Seized Defend. Cases

HEROIN136 3794.065

1
5.000
0
0.000
0
0.000
0
0.000
0
0.000
12 1208.805
0
0.000
0
0.000
0
0.000
107 2254.260
00.00
16 326.000
0
0.000

347

0
0
0
0
0
0
0
0
0
347
0
0
0

Qty.
No.of No.of
Seized Defend. Cases

BHANG

ANTI NARCOTICS FORCE STATEMENT SHOWING NARCOTICS SEIZURESWITHIN PAKISTAN FROM PERIOD 01/01/97 TO 31/10/97

TABLE 3

QTY. in Kgs./Nos.

3 51 14660.00

0
0.000
0
0.000
0
0.000
0
0.000
0
0.000
0
0.000
0
0.000
0
0.000
0
0.000
351 14660.00
0
0.000
0
0.000
0
0.000

Qty.
No.of
Seized Defend.

OTHERSRESOURCE MATERIAL SERIES No. 54