Government Orders Nationwide Crackdown on Hawala and Terror Financing
The federal government of Pakistan has ordered a wide-ranging and aggressive crackdown on hawala and hundi networks, smuggling, black money, terror financing, illegal spectrum use, and the crime-terror nexus, as part of a broader strategy to strengthen internal security and stabilize the economy. The move reflects growing concern over rising militant violence, economic leakage, and threats to foreign investment.
The decision was taken during a high-level meeting of the Federal Steering and Review Committee on Counter Terrorism, chaired by the Secretary of the Ministry of Interior and Narcotics Control. Senior officials from all provinces, Gilgit-Baltistan, and Azad Jammu and Kashmir attended the meeting, underlining the national scale of the operation.
This detailed article explains the government’s new crackdown strategy, its focus on hawala and smuggling, counterterrorism measures, digitization of petrol pumps, Afghan repatriation, protection of CPEC projects, and what these steps mean for Pakistan’s economy and security. The article is written in easy English, includes Google-search-friendly keywords, and ends with a meta description and focus keywords as requested.
Why the Government Ordered a Nationwide Crackdown
Pakistan is facing simultaneous economic and security challenges. Illegal financial flows, smuggling, and terror financing have weakened the economy while enabling militant networks.
Key Reasons Behind the Crackdown
- Rising militant attacks in KP and Balochistan
- Loss of revenue due to smuggling and black money
- Use of hawala and hundi for terror financing
- Threats to Chinese and foreign-funded projects
- Pressure to improve AML and CFT compliance
Authorities described the initiative as part of efforts to “harden the state” against internal and external threats.
Focus on Hawala and Hundi Networks
A major pillar of the crackdown is targeting hawala and hundi, which operate outside the formal banking system.
Why Hawala and Hundi Are a Threat
- Used for money laundering
- Facilitate terror financing
- Undermine the formal financial system
- Enable tax evasion and black money
The government has instructed the Federal Investigation Agency and the AML/CFT Authority to intensify investigations and arrests linked to these networks.
Crackdown on Smuggling and Shadow Economy
Smuggling remains one of the biggest drains on Pakistan’s economy, especially in fuel, goods, and narcotics.
Measures Approved
- Stricter border enforcement
- Action against smuggled fuel
- Crackdown on illegal trade routes
- Stronger coordination between provinces
Authorities aim to reduce the shadow economy, which fuels black money and criminal activity.
Digitization of Petrol Pumps Ordered
A major reform approved by the committee is the mandatory digitization of petrol pumps across the country.
What the Decision Means
- All petrol pumps must be digitized
- Illegal and non-digitized outlets to be shut down
- Provinces to use powers under the Petroleum Amendments Act 2025
- Regular enforcement reports required
This step targets the sale of smuggled fuel, which causes billions in losses annually.
Zero-Tolerance Policy on Smuggled Fuel
The government has adopted a zero-tolerance policy against smuggled petroleum products.
Enforcement Strategy
- Closure of illegal fuel stations
- Heavy penalties under new laws
- Monitoring of fuel supply chains
- Coordination with customs and law enforcement
Officials believe digitization will increase transparency and tax collection.
Strengthening Counter Terrorism Departments
The committee directed provinces to accelerate capacity-building of Counter Terrorism Departments (CTDs).
Areas of Focus
- Expanded deployment in Khyber Pakhtunkhwa
- Increased presence in Balochistan
- Better training and equipment
- Enhanced intelligence sharing
Militant violence has increased in these regions in recent months, prompting urgent action.
Intelligence-Based Operations Against Militants
Law enforcement agencies were ordered to intensify intelligence-based operations.
Targets of Operations
- Militant groups
- Financial facilitators
- Logistics and support networks
- Urban sleeper cells
The aim is to disrupt both violent actors and their financial backers.
Role of Religious Leaders and Local Communities
The government emphasized the importance of community engagement in counterterrorism.
Community-Level Strategy
- Engagement with religious leaders
- Counter-narrative against extremism
- Awareness campaigns
- Cutting social and logistical support for militants
Officials believe security measures alone are not enough without public cooperation.
Tightened Security for CPEC and Foreign Projects
Security for Chinese-led and other foreign-invested projects will be significantly enhanced.
Why This Is Critical
- Repeated attacks on project sites
- Threats to foreign personnel
- Investor confidence at risk
The move aims to reassure partners involved in the China-Pakistan Economic Corridor and other investments.
Action Against Illegal Spectrum Use
The crackdown also includes action against illegal spectrum usage, which authorities say is being exploited by criminal and militant groups.
Key Steps
- Identification of illegal spectrum operators
- Coordination with telecom regulators
- Blocking unauthorized communications
This is part of efforts to disrupt crime-terror communication channels.
Expansion of Safe City Surveillance Projects
Authorities decided to speed up Safe City surveillance projects nationwide.
Priority Areas
- Gilgit-Baltistan
- Azad Jammu and Kashmir
- Gwadar
Enhanced surveillance is expected to improve crime detection and prevention.
Anti-Encroachment Drives Intensified
The committee ordered intensified anti-encroachment operations.
Locations Targeted
- Khyber Pakhtunkhwa
- Sindh
- Balochistan
- Islamabad
Encroachments are often linked to illegal activities and security risks.
Remapping of Undocumented Foreigners
A significant part of the strategy focuses on undocumented foreigners, particularly Afghan nationals.
Decisions Taken
- Remapping of undocumented individuals
- Cancellation of fake identity cards
- Data sharing by NADRA with law enforcement
Authorities want to eliminate identity fraud and security loopholes.
Afghan Repatriation and Camp Evacuation
Officials ordered immediate evacuation of Afghan camps in KP.
Afghan Repatriation Policy
- NGOs facilitating camps to be halted
- Zero tolerance for illegal residents
- Prevention of re-entry of deported individuals
So far, around two million Afghan nationals have been repatriated, while over two million remain.
Illegal Foreigners Repatriation Programme Continues
Relocation of Afghan nationals to third countries will continue only under the Illegal Foreigners Repatriation Programme.
Government Stance
- Strict enforcement
- No exceptions for illegal residents
- Coordination between federal and provincial authorities
Infrastructure and Governance Reforms
The National Highway Authority was directed to ensure timely completion of infrastructure projects.
Key Instructions
- Complete projects on schedule
- Submit monthly progress reports
- Improve accountability
This is part of broader governance reforms linked to security and economic stability.
Economic Impact of the Crackdown
The crackdown is expected to have short-term disruption but long-term benefits.
Expected Economic Outcomes
- Increased tax revenue
- Reduced black money circulation
- Improved investor confidence
- Stronger financial system
Authorities believe the measures will strengthen Pakistan’s economy over time.
Public and Business Community Reaction
Initial reactions from business circles are mixed.
Key Concerns
- Short-term enforcement pressure
- Compliance costs
Positive Expectations
- Fairer competition
- Reduced smuggling
- Stronger rule of law
Many analysts see the crackdown as necessary but challenging.
Challenges in Implementation
Despite strong intent, implementation will be critical.
Key Challenges
- Coordination across provinces
- Capacity of law enforcement
- Political resistance
- Ensuring transparency
The government has stressed regular monitoring and reporting.
Conclusion
The federal government’s decision to launch a nationwide crackdown on hawala, smuggling, black money, and terror financing marks one of the most comprehensive security and economic enforcement drives in recent years. By combining financial regulation, counterterrorism operations, digitization reforms, and immigration control, authorities aim to cut off the lifelines of militancy and economic crime.
If implemented effectively, these measures could significantly strengthen Pakistan’s security, governance, and economic resilience, while restoring confidence among citizens and investors alike.
