Financial Crime World

International Cooperation on Financial Crimes in Bangladesh

The Concerns and Challenges

Bangladesh has been identified as a major source of illicit financial flows, with an estimated $61.6 billion smuggled out of the country between 2005 and 2014. Trade misinvoicing, over-invoicing, under-invoicing, and hundi are the main methods used to launder money in Bangladesh.

  • Trade Misinvoicing: Falsifying the value of imports and exports to move money illegally across borders.
  • Over-Invoicing: Inflating the cost of goods or services to conceal illicit payments.
  • Under-Invoicing: Understating the cost of goods or services to avoid paying taxes or duties.
  • Hundi: A form of unofficial money transfer that is often used for illegal activities.

Government Efforts and International Cooperation

Despite claims that it lacks mechanisms to track laundering, Bangladesh has signed mutual legal assistance treaties (MLATs) with several countries. However, Canada, Cyprus, and Switzerland remain missing from this list.

  • United Nations Office on Drugs and Crime (UNODC): Provides resources to help countries combat money laundering and recover laundered assets through its asset recovery networks.
  • Stolen Asset Recovery (StAR) Initiative: A program that helps countries recover stolen assets.
  • Asset Recovery and Asset Management Program (ARAMP): A program that helps countries manage recovered assets.

Implementing the United Nations Convention against Corruption

Bangladesh has committed to implementing UNCAC, but visible steps have not been taken to address concerns raised by the UNCAC Review Mechanism. The country lacks an independent institution for asset forfeiture and lawsuits are often non-functional due to political interference.

Recovering Laundersed Money

Recovering laundered money requires cooperation between countries, law enforcement agencies, financial institutions, and international organizations. It is crucial for countries to have effective legal frameworks, strong anti-money laundering (AML) measures, and the political will to combat money laundering and facilitate the return of stolen assets.

Recommendations

  • Initiate Recovery Efforts: The government should initiate recovery efforts and seek expertise locally and abroad.
  • Establish Robust AML and KYC Procedures: Strengthening independence of the Anti-Corruption Commission, improving transparency of public procurement, and increasing accountability of law enforcement officials are crucial.
  • Strong Political Will: Ultimately, recovering laundered money requires a strong political will to combat corruption and facilitate the return of stolen assets.