Financial Crime World

Bangladesh Faces a Serious Threat from Money Laundering

A staggering $61.6 billion siphoned out between 2005 and 2014

A recent report by Global Financial Institute (GFI) reveals that an estimated $61.6 billion was laundered out of Bangladesh between 2005 and 2014. This is a staggering amount, with the GFI estimating that on average, around $7.53 billion is laundered every year from the country.

Money Laundering in Bangladesh: A Growing Concern

  • In 2020 alone, a total of around $37.65 billion was laundered out of Bangladesh.
  • According to the Basel Institute of Governance’s annual report for 2020, Bangladesh is among the top 40 countries in the world in terms of risk for money laundering and terrorist financing.
  • The country ranked 38th out of 141 countries on the Basel Anti-Money Laundering Index of 2020.

Underlying Factors Contributing to Money Laundering

The GFI highlights that major underlying factors contributing to money laundering include:

  • Undue political influence: This allows corrupt individuals and groups to operate with impunity.
  • Poor environment for investment: A lack of transparency and accountability in business dealings makes it easier for illicit funds to flow into the country.
  • Massive corruption in the governance system: Corruption at all levels of government creates an environment in which money laundering can thrive.
  • Absence of rule of law: The lack of effective law enforcement and judicial systems allows criminals to operate with impunity.
  • Lack of coordination among responsible institutions: Inadequate cooperation between agencies such as the Bangladesh Financial Intelligence Unit (BFIU), the Anti-Corruption Commission (ACC), and the National Board of Revenue (NBR) hinders efforts to prevent and investigate money laundering.

Trade-Based Money Laundering: A Major Concern

The report also points out that around 80% of total money laundering from Bangladesh is Trade-Based Money Laundering (TBML) due to over-invoicing and under-invoicing.

What Can Be Done?

The government of Bangladesh should take timely actions to bring the perpetrators to justice and recover the laundered money. The country can also seek international cooperation through its membership in various global bodies, such as:

  • Asia Pacific Group (APG): A regional anti-money laundering body that brings together countries from the Asia-Pacific region.
  • Egmond Group: An international network of financial intelligence units and other organizations working to combat money laundering and terrorist financing.
  • United Nations Convention Against Corruption (UNCAC): A global treaty aimed at preventing and combating corruption, promoting transparency, and enhancing international cooperation in this field.