The Pakistani High Commissioner, Naela Chohan, called upon Australia's banks to reconsider the sector-wide closure of the accounts of international money transfer agents, explaining to the Sydney Morning Herald that they are used by her government to monitor terrorist groups. Prior to the termination of the agents' accounts, the domestic remittance industry was worth A$30 billion.
Westpac will be the last financial institution to end its ties with transfer agents who were serving customers in countries like Pakistan and Somalia. However, the inactivation date was prolonged without warning after 24 agents filed an injunction in the Federal Court, thereby delaying the shutdown by Westpac to March 31 next year.
Ms Chohan unravelled the complicated situation to reporters on Tuesday, acknowledging the understandable motivations of Australia's banks:
"This is a process of bank de-risking ... You have to do it and we fully understand the need, but if you completely stop the remittances, it would be detrimental to our mutual interests ... Pakistan is a frontline state in the fight against terrorism ... It is in our mutual interest to ensure that the communities continue to use formal channels for remittances so that this does not affect our ability to monitor funding sources".
The Pakistani authorities use tight controls to closely monitor remitter transactions. Ms Chohan also declared the decision of the banks as a breach against the regulations of the Financial Action Task Force (FATF), an inter-governmental body, and not in accordance with outcomes from the recent Brisbane G20 Summit. Furthermore, the High Commissioner stated that the fierce determination of terrorism organisations means that money will still be transferred, but along illegitimate routes that are far more difficult to exert any influence over.
Ms Chohan's statement was reinforced by Munir Mohammad, who oversees the Sydney Forex remittance firm that led the 24 parties involved in the class litigation. Mr Mohammad informed the Australian media on Tuesday that he believes $150 million arrived in Pakistan from Australia along the previously open agency channels, while a significantly larger amount was transferred illegally. He said that the new policy will simply result in a major shift across to the black market system, rather than leading to a cessation or hampering of activity.