The Federal Board of Revenue (FBR) recently revealed to the Senate Standing Sub-Committee on Finance and Revenue that numerous commercial banks played a significant role in a massive money laundering scheme disguised as solar panel imports, totaling Rs. 117 billion.

Between 2017 and 2022, the Revenue Division identified Rs. 69.5 billion in over-invoicing, highlighting a substantial capital outflow that bypassed legitimate trade channels. The FBR identified 63 importer companies involved in this scam, raising questions about how businesses with minimal paid-up capital managed transactions worth billions. For instance, one company with Rs. 2 million in capital conducted transactions amounting to Rs. 50 billion, while another with Rs. 10 million capital facilitated Rs. 40 billion in trade.

The inquiry scrutinized the involvement of commercial banks in these transactions. The State Bank of Pakistan (SBP) imposed fines exceeding Rs. 200 million on these banks, but the committee criticized the leniency of these penalties. Senators sought clarification on the central bank's actions against the banks implicated.

Funds were transferred to multiple countries, including the UAE, Singapore, Switzerland, the US, Australia, Germany, Canada, South Korea, Sri Lanka, and the UK. The Financial Monitoring Unit (FMU) had flagged suspicious transactions as early as 2019, but only issued 28 Suspicious Transaction Reports (STRs) to the FBR, prompting criticism for the delayed response.

Bank officials revealed that private companies executed numerous transactions, with one company, Bright Star, making four transactions worth $185 million, and another, Moonlight, conducting two transactions worth $49 million. In total, $427 million in over-invoicing and money laundering was reported in this case.

The Senate committee pledged to continue investigating the matter to ensure all those involved are held accountable.