ISLAMABAD – The International Monetary Fund (IMF) has flagged major weaknesses in Pakistan’s ability to detect corruption and monitor politically exposed persons (PEPs), saying safeguards remain inconsistent and corruption-specific warning signs are lacking.
According to a draft of the Governance and Corruption Diagnostic Assessment report — shared with Islamabad ahead of its planned release later this month — the IMF observed that PEP identification remains “uneven across sectors” due to limited access to comprehensive data, lack of automated screening tools in smaller institutions, and absence of clear red-flag indicators for detecting misuse of public office.
The PEP category includes top political leaders, senior bureaucrats, judges, military officers, state-owned enterprise executives, ambassadors, and parliamentarians. While regulations issued by the State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP), and Federal Board of Revenue (FBR) guide identification processes, smaller institutions often fail to apply enhanced due diligence effectively.
Under the $7 billion IMF programme, the diagnostic mission met with around three dozen government and state institutions earlier this year. Pakistan had committed to publishing the full report, but at Islamabad’s request, the release deadline was extended from July to August 2025.
The IMF praised Pakistan’s efforts in establishing a basic anti-corruption framework but stressed that reporting entities lack clarity on corruption-specific typologies. Smaller financial institutions, it said, rely heavily on official lists from regulators instead of developing robust internal systems.
The Fund pointed to global best practices — such as Canada’s red-flag indicators for transactions involving public contracts, rapid contract turnover, and unexplained wealth in low-salary public roles, as well as Colombia’s targeted detection of procurement-related corruption during the pandemic — as models Pakistan could adopt.
Sources said the Ministry of Finance has given relevant departments until last Friday to respond to the IMF’s findings. While some entities have accepted certain recommendations, others have disputed them, raising the possibility that the report’s publication may face further delays.
