Financial Crime Prevention in Bangladesh: A Critical Challenge

Introduction

Bangladesh is facing a significant challenge in preventing financial crimes, with billions of dollars being laundered out of the country each year. This article will discuss the extent of the problem, the lack of political will to address it, and the measures that need to be taken to prevent financial crimes in Bangladesh.

The Extent of Financial Crimes in Bangladesh

According to a report by Global Financial Integrity (GFI), between 2005 and 2014, $61.6 billion was smuggled out of Bangladesh, resulting in an annual loss of $8.27 billion due to trade misinvoicing alone. The GFI report also predicts that this figure could exceed $14 billion per year by 2030.

Money Laundering Hotspots

Bangladeshis are among the top applicants for the Malaysian second-home programme and have been involved in money laundering to Canada. In recent years, Bangladesh’s customs authorities have found that 33 readymade garment factories and buying houses had laundered at least Tk 821 crore over the last six years.

Lack of Political Will

Despite these alarming figures, former Finance Minister AMA Muhith has downplayed the issue of money laundering, stating that the amount reported by the media may be exaggerated. However, current Finance Minister Nirmal Mangal stated that he does not have any mechanism to glean information about laundering.

Weak Anti-Money Laundering (AML) Framework

The country also lacks effective AML and know-your-customer (KYC) procedures in place, which are critical for preventing financial crimes. The Anti-Corruption Commission and the Financial Intelligence Unit (FIU) are also considered on the basis of political affiliation, rather than merit.

Recovering Stolen Assets

Recovering laundered money involves a complex process that requires cooperation between countries, law enforcement agencies, financial institutions, and international organisations. Bangladesh’s lack of effective legal frameworks, AML measures, and political will to combat money laundering makes it difficult for the country to recover stolen assets.

International Efforts

International efforts are continually evolving to enhance the effectiveness of asset recovery mechanisms, but even successful countries only recover a small fraction of the money that is laundered each year. To effectively address this issue, Bangladesh needs to initiate recovery efforts, seeking expertise locally and abroad, and demonstrate strong political will to combat financial crimes.

Commitment to International Conventions

Bangladesh’s commitment to implementing international conventions such as UNCAC is also essential for fighting corruption and recovering stolen assets. However, the country has not taken visible steps to address concerns raised by the UNCAC Review Mechanism, which has identified areas where Bangladesh needs to improve its implementation of UNCAC.

Conclusion

Ultimately, preventing financial crimes in Bangladesh requires a concerted effort from all stakeholders, including government officials, law enforcement agencies, financial institutions, and international organisations. By working together, it is possible to recover laundered money and strengthen the country’s economy.