Space For Rent
Monday, February 22, 2016, Falgun 10, 1422 BS, Jamadiul Awwal 11, 1437 Hijri


Between The Lines   
Money laundering must be curbed
Shamsul Huda
Published :Monday, 22 February, 2016,  Time : 12:00 AM  View Count : 60
It is embarrassing for Bangladesh that money laundering in the country has reached an alarming level overshadowing government's a great many of achievements and successes. It is an issue to be taken into account acutely considering the fact that government is losing its carefully tended image of good governance due to a handful of filthy rich who are said to have been mired in corruption using their political influence. Interestingly, the past experience suggests that these corrupt people generally turn their back on the party they belong to in hour of need when it has become the target of people's wrath because of their ill-gotten gains.
Corruption facilitates money-laundering and the nexus of the two have a devastating impact on the economy as a whole and in Bangladesh's perspective, it is clear when Finance Minister AMA Muhith earlier this month said that BASIC Bank and Sonali Bank's loan forgery would take a huge toll on the national economy. Unbridled money laundering may cause the country's instability and insecurity, illegal trafficking of drugs, arms and people, extortions, kidnappings, fraud and tax evasion.
According to the recent revelation of the Transparency International, the Corruption Perception Index in Bangladesh remained unchanged last year. In terms of ranking, Bangladesh's position is 13th from the bottom among 168 countries that were listed in the ranking of corruption and this crime has been blighting the country's economy, corroding the nascent democracy and haunting the nation since its independence.
It seems that the government is not out of the loop about what is happening in the country particularly in its financial sector and has come up with a series of measures to combat money laundering that hit its peak in a decade by surging nearly 34 per cent year-on-year in 2013, according to the Global Financial Integrity, a Washington-based research agency. The huge volume of over TK.76 thousand crore capital slippage during the period was estimated at three times the size of average foreign direct investments (FDIs) into Bangladesh a year and more than 6 per cent of the country's gross domestic products (GDP).
The government of Sheikh Hasina is ostensibly aware of the magnitude of this huge volume of capital outflows and their chilling effects on the economy in the long run and does want to grab the bull by the horns. The first and foremost step apparently taken is the strengthening of the Anti-Corruption Commission letting it exercise its powers seemingly under no pressure and it is evident when some of the ruling party parliament members have been quizzed in corruption cases giving the hope that ACC will be able to shake off its past stigma when it was labeled as a toothless tiger. In addition, now onwards, police and other agencies nominated by the Bangladesh Financial Intelligence Unit (BFIU) have been empowered to conduct any money laundering investigations. Previously, ACC was the only body charged with looking into this kind of crimes.
The government last October amended the Money Laundering Prevention Act 2012 through an ordinance. The first anti-money laundering legislation of Bangladesh was the Money Laundering Prevention Act in 2002 which was replaced by the Money Laundering Prevention Ordinance 2008 and subsequently, it was again repealed by the Money Laundering Prevention Act in 2009. Most importantly, human trafficking is now brought under money laundering crimes.
After the amendments, the BFIU has become a separate agency under Bangladesh Bank with the status of its head as a BB deputy governor who is appointed by a search committee led by BB governor. It means that the government is keen to empower BFIU to probe the corruption allegations freely and independently, so that, it can keep even big fish out of the water whenever they are caught in its net.
Realizing the severe consequences of corruption and money laundering, the government has sprung into fresh actions and started clamping down upon the corrupt people. As a result, money laundering cases lodged with ACC rose by over 25 per cent in 2014, as compared to the previous year. The anti-graft watchdog, though still considered wishy-washy, carried out 226 enquiries last year, as against 180 in 2013 and only 39 in 2012.
Bangladesh is striving hard to curb money laundering in accordance with international standards and principles. After the Vienna Convention in 1998, the Financial Action Task Force (FATF) came into being to work and cooperates closely with other global organizations such as the International Monetary Fund, World Bank and United Nations. The FATF has also regional bodies for effective coordination globally and its Asia-Pacific Group (APG) on money laundering was set up in 1997 with Bangladesh as a founder member.
In line with APG, the Bangladesh Financial Intelligence Unit is now exchanging information related to money laundering and terrorist financing with its foreign counterparts. It has also joined the 146-member Egmont Group in 2013 which aims to provide a platform for financial intelligent units of government organizations in different countries to beef up support for each other. Bangladesh has so far sent at least 34 mutual legal assistance requests (MLARs) to various countries seeking information on suspected Bangladeshis who are thought to have siphoned off huge amount of money from the country. MLARs are newly conceived methods of cooperation between the states for obtaining information in the investigation and prosecution of money laundering cases.
It is not enough that only cooperation between the governments through their different organizations and agencies can effectively combat the illegal money transfers. The crux of the problem, probably, is the opaqueness in the global financial systems such as multinational banks and financial organizations through which money has been laundered every now and then. Trading companies take advantage of loopholes in the global financial systems and launder money through their exports of under-invoicing and import of over-invoicing. Another household name of illegal money transfers is Hundi, a murky system used by a section of an estimated 10 million non-resident Bangladeshis (NRBs) living all over the world to send their remittances to their families and relatives living even in the far flung areas of the country. Bangladesh government is concerned about the menace and has launched all out campaigns to make its NRBs aware of it and urged them to send their hard-earned money through legal channels.
Considering the devastating effects of corruption and money laundering on the economy and their support for other crimes like terrorist activities, drug smuggling and human trafficking, it is time to put a stop to these offences in the interest of the country and it is hoped that the strong-willed Prime Minister Shaikh Hasina who is widely acclaimed as a leader of the common people will show zero tolerance toward this serious issue.
Shamsul Huda is a senior Bangladeshi
journalist based in Saudi Arabia









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