Bangladesh Fails to Meet FATF Recommendations on Financial Crime Risk Assessment
A recent evaluation by the global Financial Action Task Force (FATF) has found that Bangladesh is struggling to implement key recommendations aimed at preventing financial crimes such as money laundering and terrorist financing.
Key Areas of Non-Compliance
Among the 40 recommendations made by the FATF, Bangladesh scored poorly on several critical areas, including:
- National Cooperation and Coordination: The country failed to establish a functional national coordination mechanism, making it challenging for authorities to share information and coordinate efforts effectively.
- Confiscation and Provisional Measures: Bangladesh’s laws and regulations do not provide sufficient powers for authorities to confiscate assets related to financial crimes, limiting the effectiveness of its AML/CFT regime.
- Targeted Financial Sanctions Related to Terrorism and Terrorist Financing: The country has not fully implemented measures to identify and freeze assets linked to terrorist organizations, putting it at risk of being exploited by such groups.
Partial Compliance in Other Areas
While Bangladesh demonstrated partial compliance in several other areas, including:
- Customer Due Diligence: The country has laws and regulations in place to ensure financial institutions verify the identities of their customers.
- Record Keeping: Financial institutions in Bangladesh are required to maintain accurate records of customer transactions.
- Regulation and Supervision of Financial Institutions: The country’s regulatory bodies are responsible for overseeing and supervising financial institutions.
However, its overall performance was marred by significant shortcomings.
The Need for Improvement
The FATF’s evaluation highlights the need for Bangladesh to take immediate action to address these weaknesses and ensure that it meets international standards for combating financial crime. Failure to do so may result in increased scrutiny from the global community and potentially even designation as a high-risk jurisdiction.
Recommendations for Improvement
To rectify its shortcomings, Bangladesh is advised to:
- Strengthen National Coordination Mechanisms: Improve information sharing and cooperation among authorities by establishing a functional national coordination mechanism.
- Enhance Laws and Regulations: Provide sufficient powers for confiscating assets related to financial crimes through amendments to existing laws and regulations.
- Implement Effective Measures: Identify and freeze assets linked to terrorist organizations by implementing targeted financial sanctions.
By taking these steps, Bangladesh can demonstrate its commitment to preventing financial crime and ensuring the integrity of its financial system.