ISLAMABAD – In a landmark crackdown on financial crime, Pakistan has imposed a record monetary penalty of Rs111 billion on 13 import firms involved in a massive money laundering operation through inflated invoices on solar panel imports. This is one of the most significant trade-based money laundering cases in the country’s history, exposing deep-rooted vulnerabilities in the trade and financial system.
The judgment was delivered by Dr. Erum Zahra of the Customs Adjudication Authority, who found the companies guilty of laundering Rs120 billion out of Pakistan by over-invoicing solar panels. Despite appearing to operate as legitimate businesses, all 13 firms were discovered to be shell entities, with no physical operations, dummy proprietors, and bank accounts used solely for illicit transactions. These companies received Rs140 billion in deposits, including Rs45 billion in unexplained cash injections.
The fraud involved importing solar panels at grossly inflated prices and then selling them in the local market for just Rs85 billion, creating a Rs35 billion discrepancy that confirmed deliberate over-invoicing to send money abroad under the guise of trade. The largest penalties were imposed on four of the entities, totaling Rs98.6 billion collectively.
The Federal Board of Revenue (FBR), along with the Post Clearance Audit (South), has filed 13 FIRs implicating 45 individuals. Despite multiple summons, none of the accused appeared in court, prompting the adjudicating officer to levy personal penalties of Rs45 million and order the seizure of 327 containers of solar panels. The FBR anticipates recovering Rs1.5 billion through public auctions of these seized goods.
The money laundering scheme has triggered alarm across Pakistan’s enforcement agencies and government circles. The Prime Minister’s Office has constituted a high-powered committee to investigate how such large-scale fraud escaped detection. Agencies involved include the SECP, Customs, IRS, FMU, banks, and law enforcement.
Officials say the next phase will involve tracing, freezing, and confiscating properties and other assets acquired through money laundering. The outcome is expected to drive major reforms in how Pakistan detects and responds to trade-based financial crimes.