It is a piece of good news that the government has adopted a number of strategies to combat trade-based money laundering and illicit financial outflow. These have been included in the National Strategy for Preventing Money Laundering and Combating Financing of Terrorism 2019-2021. The strategies include major issues like recovering siphoned money, avoiding lengthy process in investigation of money laundering and terror financing, developing an effective judicial system, deterring all sorts of corruption, enforcing Anti-money Laundering and Combating Financing of Terrorism (AML/CFT) compliance and modernising border controls. The chief of Bangladesh Financial Intelligence Unit (BFIU) said the government has already prepared the national strategy paper (2019-21). Currently, action plans are being implemented, he said.
For further implementation and effectiveness of AML and CFT measures, the strategy prioritises actions focusing more on preventing proceeds of crime from getting integrated into the financial system or siphoned off through establishment of appropriate tools and mechanism such as quality financial investigation, proper confiscation mechanism restricting channels of illicit financial flows.
It may be noted that the government could hardly make any progress in implementing key components of the national strategy (2015-2017) for curbing money laundering and terror financing mainly due to procedural complexities and dilly-dallying of the authorities concerned.
The national strategy paper (2015-17) on AML/CFT had 138 action plans, of which the government so far implemented 71 completely and 36 partially, while 31 were in ongoing phase, scheduled to be implemented by the end of 2017. However, some of unfinished action items have been completed and the remaining action items have been included in the new strategy.
The three-year national strategy for preventing money laundering and combating financing of terrorism 2015-2017 ended on December 31, 2017. A new strategy paper has been prepared for three years more from 2019 to 2021. Some action plans of the earlier strategy that are still unimplemented have been included in the new strategy paper.
A number of items remain unimplemented due to lack of required steps by the authorities concerned despite repeated reminders from Financial Institutions Division (FIB) and concerned agencies.
The 2019 Global Financial Integrity report on illicit financial flows to and from developing countries showed that at least U$5.90 billion flew out of Bangladesh in 2015 through mis-invoicing in international trade with advanced economies. Illicit inflows from other countries to Bangladesh stood at U$2.8 billion in the same year. The 2017 report showed that annual average illicit capital outflow from Bangladesh stood at U$7.58 billion during 2005-2014 and the amount was $9.10 billion in 2014.
In the meantime, the finance ministry in a report to the parliamentary standing committee on the ministry said that money laundering has registered substantial rise in Bangladesh with the proliferation of bribery, corruption, forgery, black-marketing and smuggling.
The committee, following the report, recommended that the ministry and the central bank should identify the process of siphoning out huge money and take measures to stop it. It suggested legal actions against a section of Bangladeshi citizens including industrialists and businessmen who have illegal homes and money abroad through the Financial Intelligence Unit of the central bank.
The standing committee at its recent meeting suggested necessary measures to strengthen the capacity of the Bangladesh Bank (BB), the Anti-Corruption Commission (ACC), the National Board of Revenue (NBR) and other agencies to prevent money laundering. It also stressed on enhancing coordination among different government machineries and law enforcing agencies for curbing money laundering.
In recent times, Bangladesh Bank has been trying to identify the persons who had already sent money in Malaysia, Canada and United Arab Emirates through hundi, an illegal way of money transfer bypassing banking system, but has failed due to alleged non-cooperation from its counterparts in those countries.
Voicing deep concern over growing illicit flight of money out of the country, Transparency International Bangladesh (TIB) called upon the government to take advantage of the relevant legal instruments, including the UN Convention against Corruption, to bring back stolen assets and bring to justice those involved in money laundering.
The latest data of Swiss National Bank showed that deposits by Bangladeshi citizens at various Swiss banks rose to Tk 32.36 billion at the end of 2013, from Tk 19.91 billion in 2012. The central bank earlier requested the Swiss Financial Intelligence (SFI) to sign a MoU when Bangladesh became a member of Egmont Group in July 2013. However, SFI is yet to respond.
In fact, Bangladesh has got out of the global financial watchdog's grey list due to which there has been a great reduction in the cost and time of financial transactions with the rest of the world. From now on, all commercial banks will be randomly inspected by the Financial Action Task Force (TATF) for compliance to anti-money laundering and counter-terrorist financing measures.
Financial analysts say the rate of illegal outflow of capital from Bangladesh has become higher than that of any other country. It is now high time to arrest this ominous trend. With necessary political will, it is in fact possible for the government and relevant agencies to bring back the stolen assets and prevent further flight of money illegally.
In the circumstances, enforcement of laws, effective monitoring and accountability at the supply side through highest level of political commitment without fear or favour are indispensable at this moment.