ISLAMABAD, Aug 25: Pakistan urgently needs a law against money laundering to fight the financial war on terror and endemic corruption, a UN-organised seminar heard on Monday.

The absence of legislation against money-laundering practices was hindering efforts to trace terror financing, the Anti-Narcotics Force (ANF) complained.

“In the absence of an anti-money laundering law banks do not feel bound to report suspicious transactions,” ANF chief Maj-Gen Nadeem Ahmed told the seminar. He said no bank in Pakistan had ever provided the ANF with a suspicious transactions report.

“So it is extremely difficult to trace narcotics funds,” he said.

Extremist Islamic groups and some of Pakistan’s 10,000 religious schools are suspected of channeling funds to networks like Al Qaeda, often using an ancient system of money transfers through money changers and lenders outside of the banking system.

The body tasked with tracing terrorist financing and probing suspicious transactions, the Federal Investigation Agency (FIA), urged authorities to be vigilant of donations made to religious schools.

“Some money people donate to religious schools is used for sectarian (violence),” FIA director-general Mohib Asad told the seminar.

A constitutional lawyer credited as the architect of President Pervez Musharraf’s rewriting of the constitution, Syed Sharifuddin Pirzada, said he had long urged authorities to draft a law against money laundering.

“It is a necessity to have a law on money laundering as soon as possible,” he told the seminar.

“It is a shame and disgrace to see corruption everywhere in Pakistan.”

A senior official of the state-run National Accountability Bureau (NAB) told the seminar that further investigations were being conducted into 61 foreign bank accounts allegedly held by Ms Bhutto, Mr Zardari and their intermediaries.—AFP