Pak authorities trace 2,750 properties worth Rs4.2 trillion in Dubai

ISLAMABAD: Pakistani investigators with the cooperation of Dubai authorities traced 2,750 overseas properties in the United Arab Emirates (UAE). These overseas property empires were allegedly acquired by Pakistani nationals with help of illegal flight of capital and plunder of the hard-earned taxpayers' money worth around Rs 4,240 billion.

Based on three intelligence reports, the Federal Investigation Agency (FIA), State Bank of Pakistan (SBP) and Federal Board of Revenue (FBR) have started crackdown against around 5,000 super rich Pakistanis who allegedly violated national laws to acquire these properties in the UAE.

“Lately, FIA's cyber-crime wing through its cyber-intelligence has deciphered the identity of Pakistani owners of 1,476 properties in Dubai, UAE and the findings are being transmitted to zones/field offices for initiating inquiries,” revealed a confidential report jointly prepared by the SBP and FIA.

“FIA’s anti-corruption wing has instituted 54 criminal inquiries (Foreign Assets Declaration Regulations 1972) against 662 (out of 3549 property holders, list already submitted to this August Court vide its report dated 14th March 2018) with complete particulars—however they were stalled due to non-provision of record by the real estate regulatory agency of Dubai Land Department and subsequently by the tax amnesty scheme 2018, regulated by Foreign Assets (Declaration and Repatriation) Ordinance, 2018. However, the inquiries have been re-initiated,” revealed the report made available exclusively to Geo News.

“FIA’s anti-corruption wing has instituted further criminal inquiries last week (Foreign Assets Declaration Regulations 1972) against 621 UAE properties discovered through a 2nd source report,” the confidential report further stated.

Investigators in their confidential report revealed that “FIA has till date, taken cognisance of 2,750 undisclosed properties (apartments etc.) of Pakistani nationals held in UAE on various names and inquiries are under-way—if each property is valued at a conservative estimate of Rs40 million each (average), the value of UAE assets under inquiry with FIA comes to Rs110 billion, which is only 2.5% of Rs4,240 billion - the value of officially known assets of Pakistanis in UAE.”

A deep dive into the records of the real estate regulatory agency of Dubai Land Department will be required to fathom the true magnitude of assets held in UAE, investigators further stated.

Officials of FBR, FIA and SBP, in their findings, further said that Mr Ahmer Bilal Sufi (as Amicus Curiae) has drafted Mutual Legal Assistance (MLA) Rules which, once approved by Supreme Court and the government will enable FIA to initiate Mutual Legal Assistance requests to key foreign jurisdictions (top money-laundering destinations) and help Pakistan in foreign assets recovery (track, freeze & repatriate) of foreign assets and accounts, especially those linked to corruption, kickbacks and money laundering etc.

The report continued to reveal that an estimated, over US$150 billion is stashed in foreign properties belonging to Pakistanis, as per private sector estimates (according to Shabbar Zaidi of AF Ferguson). Dubai properties investment volume (2015/16 Dubai official) remained AED135 billion (Rs4,240 billion) and US$34 billion, stated the report revealing that annual investment growth witnessed AED7 billion + (Rs220 billion).

The report further indicated UAE as a top tax-haven while Pakistanis parked around US$100 billion in UK, USA and Europe. The report also stated that Switzerland has US$200 billion of Pakistanis as per statement of Micheline Calmy-Rey/Swiss Foreign Minister in 2014. By the close of Amnesty Scheme 2018, on 31st July 2018, declarations from 5,363 entities (individuals/Co.'s) had disclosed foreign assets worth Rs1,003 billion (US$ 8.1 billion), with a major share of declared assets located in UAE, revealed the report this correspondent obtained. Properties/ account holders in other tax-haven countries benefitted only marginally from this scheme, added the report. It has been recommended to the governor SBP that the scope and terms of reference (TORs) of the Standing Committee constituted under the directions of the apex court should be expanded, stated the report.

The scope should not be limited to the information regarding properties of Pakistanis in UAE and UK, rather it should be expanded. The British government has listed Pakistan among top three money laundering source countries, after Nigeria and Russia. It is imperative that this Standing Committee makes an assessment of the total Pakistani money stashed in foreign assets and accounts, recommended the report. The ToRs of the Standing Committee may be expanded. A special authority invested in the Standing Committee to act as a designated authority in Pakistan under UNCAC and other bilateral and multilateral instruments, so that investigators can seek information regarding foreign properties and accounts of all Pakistani persons of interest in any tax haven or foreign jurisdiction. The report also indicated reasons for poor control over money laundering and difficulties in the ongoing investigation.

The difficulties include:

1. Weak legislative instruments (domestic) and foreign assets declaration regulation, 1972 does not authorize FIA to investigate this matter
   
2. Income Tax Ordinance 2001, Section 111-(4) protects sources of unexplained income from foreign remittance.
   
3. Pakistan Economic Reforms Act 1992, Sections 4 & 5 also protects sources of unexplained income from foreign remittance, d) FIA has no authority to operate with United Nations’ Convention against Corruption 2004 and United Nations’ Convention against Trans-national Organized Crime 2000.
   

Finally, report also pointed out some essential investigation tools where FIA officials said that the authority is constrained to writing letters for seeking simple information from electronic databases, available in the national jurisdiction namely FBR’s IRIS & PRAL databases, SECP’s Co./Directors/Share-holders databank, Financial Monitoring Unit’s databank on CTRs & STRs, Telecom Companies IPDR database, IMPASS Passports’ database and Revenue Departments’/Development Authorities Property database.

FIA is willing to share its IBMS Travel History Databank (175 million travel events completely captured) with other investigation agencies/financial institutions on a reciprocal basis, but the FIA should not be crippled by denting access to national databases for criminal inquiries, added the report.