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24 January, 2020 09:53:24 AM
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Lack of progress in curbing money laundering

Economists stress coordination among bodies concerned
Faisal Mahmud, Dhaka
Lack of progress in curbing money laundering

The government’s promise to come down hard on money laundering is mostly falling flat because of the lack of political will and proper coordination among different bodies, say economists. Citing the increasing value of the dollar in the country, the economists claim that the amount of money laundered has increased dramatically in recent times. Though the price of the greenback is on the wane in the international market, it is seeing an upward trend in Bangladesh. The interbank exchange rate stood at Tk. 84.90 per dollar yesterday from Tk. 83.90 at the beginning of January this year, according to Bangladesh Bank.

A senior Bangladesh Bank official said, “The price of the dollar has increased against the taka because of a rise in money laundering through hundi. The Bangladeshi currency is being sent to Malaysia, Singapore, Australia, and Canada. Many are laundering money to various countries by opening fake LCs or through over invoices.” A huge amount of money is laundered out of the country every year through various routes. The government has taken initiatives to seal these routes. Last year, the National Board of Revenue (NBR) signed an agreement with the Bangladesh Financial Intelligence Unit (BFIU) to devise ways for reining in money laundering.

Apart from identifying and sealing the routes, that agreement between NBR and BFIU aimed to bring back the money laundered in the guise of import and export. BFIU officials also started working with the Anti-Corruption Commission (ACC), police, and law enforcement agencies to recover the laundered money, sources said. The Global Financial Integrity said USD 61.6 billion were siphoned out of Bangladesh between 2005 and 2014. This is equivalent to 25 per cent of the country’s gross domestic product in FY2016–17.

BFIU head Abu Hena Mohd Razee Hassan, however, downplayed the numbers, saying the BFIU never accepts the figure provided by the GFI as a completely true picture of the existing scenario. The annual report published by the Swiss National Bank draws huge attention from Bangladeshi media. The BFIU examined the data and found that 93 per cent of the transactions were done through proper channels, said Hassan. In other words, personal deposits accounted for only 7 per cent of the total published figure. “So, the extent of money laundering is not as severe as the GFI numbers suggest,” said Hassan.

The BFIU head also said that some 32 cases were under trial to bring back the siphoned-off money. BFIU sources said the government had set up a central coordination taskforce to stop money laundering, prevent the financing of terrorist activities, and bring back the money already transferred outside the country.  Economist Syed Jamaluddin, however, said there was no coordination among the agencies responsible for bringing back money from outside the country. “Agencies are working independently. And as such, no strong action can be taken,” he added.

He also said that 138 steps had been identified in the strategy paper of the BFIU to check money laundering. The latest position shows that 71 steps have been implemented, while 36 steps have been partially implemented and 31 more are yet to be implemented, he added. “Bringing back the laundered money is a complicated process. Bangladesh has not been able to show much progress in this regard. No action has been taken against those responsible for money laundering. Continuous follow up is needed to achieve this. The BB, NBR, and ACC have to take initiatives,” said Jamaluddin.

Khondekar Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), told The Independent that any illegal transfer of funds usually took recourse to misrepresentation of prices, quality and quantity of goods, and services.  “In many cases, buyers and sellers join hands to illegally transfer funds. However, due alertness on the part of banks can largely foil money laundering moves,” he noted. Moazzem said mispricing remains one of the major ways of siphoning off funds through trade. “In this age of information technology, it’s easy for bankers to track prices. Only willingness is needed to stop the rot,” he added.

Md Yunus Ali, supernumerary professor at the Bangladesh Institute of Bank Management (BIBM), said there was a close connection between non-performing loans (NPL) and money laundering. “A major portion of the total number of NPLs has flown out of the country,” noted.  “Laundering money after misappropriating bank loans is a crime, which is more serious than misappropriating and using the money in the country,” he added. Yunus also said major loan scams that had taken place in the banking sector involved trade bills. “Traders are using banks’ money through LC bills. But the banks know nothing about it. Tgis suggests that there are loopholes in the system,” he added.

HM

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Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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