Financial Crime World

Bangladesh’s Regulatory Bodies for Financial Crimes Face Mixed Evaluation

Overview

In 2016, Bangladesh received a mixed evaluation from the Financial Action Task Force (FATF) regarding its compliance with recommendations to combat financial crimes. The country was found to be “partially compliant” with many of the 40 recommendations made by FATF.

Strengths and Weaknesses

Strengths

  • Regulation and Supervision: Bangladesh scored well in terms of regulating and supervising financial institutions, as well as the powers of supervisors.
  • International Cooperation: The country also performed well in international cooperation efforts to combat financial crimes.

Weaknesses

  • Assessing Risk and Applying a Risk-Based Approach: Bangladesh struggled with implementing key recommendations related to assessing risk and applying a risk-based approach.
  • Customer Due Diligence: The country also faced challenges in improving customer due diligence practices.
  • Record Keeping: There were concerns about the effectiveness of record keeping practices.

Non-Compliance Areas

Bangladesh was found to be “non-compliant” in several key areas, including:

  • Confiscation and Provisional Measures: The country faced difficulties in implementing confiscation and provisional measures effectively.
  • Terrorist Financing Offence: There were concerns about the clarity of terrorist financing offence provisions.
  • Targeted Financial Sanctions: Bangladesh struggled with implementing targeted financial sanctions related to terrorism and terrorist financing.

Call for Improvement

The FATF evaluation has sparked calls for Bangladesh to strengthen its regulatory bodies and improve compliance with international standards. This includes:

  • Enhancing Anti-Money Laundering and Combating Terrorist Financing Framework: The country needs to enhance its anti-money laundering and combating terrorist financing framework.
  • Improving Customer Due Diligence: Bangladesh must improve customer due diligence practices.
  • Increasing Transparency in Beneficial Ownership: There is a need for increased transparency in beneficial ownership of legal persons and arrangements.

Conclusion

While Bangladesh has made progress in some areas, the country must address its shortcomings to meet global expectations and prevent financial crimes from undermining its economy and reputation. The FATF evaluation serves as a reminder of the importance of robust regulatory bodies in preventing and investigating financial crimes.