Exchange regulations

This refers to the editorial, ‘What we should see’ (April 27). The editorial has rightly delineated that owing wealth, if lawfully obtained and declared, is not a crime. But the editorial seems to have missed out on one critical thing while commenting: “Forming an offshore company or owning assets abroad is not illegal in itself. So long as wealth has been declared and taxes paid on it, it is perfectly appropriate to maintain offshore accounts.” The most important thing is: how the money has been transferred abroad.

The State Bank’s exchange regulations restrict transfer of funds abroad for the purpose of purchasing properties, ranches, agricultural estates, setting up private business or opening of bank accounts even if the money has been legally earned and taxes paid thereon. These restrictions are not unique to our country. The predicament Nawaz Sharif faces is how he can justify the transfer of wealth abroad. The funds transferred by bypassing the SBP’s exchange regulations come under the ambit of money laundering which is recognised as a very serious crime internationally.

Arif Majeed

Karachi