Prevention of money laundering almost impossible

Although money laundering has turned into one of the major headaches of Bangladesh’s economy in recent years, no visible political commitment to prevent this is noticed. The first ever money laundering prevention act was enacted back in 2002, but the number of cases filed under this act was low. And there was almost no progress in investigation and trial of the cases. The sorry state of investigations and trials of crimes linked to money laundering is shocking, frustrating and unacceptable.

According to a newspaper report yesterday, corruption and embezzlement of government funds are prevalent due to a lack of skilled people in investigating and prosecuting these cases, mentions Bangladesh Financial Intelligence Unit (BFIU), an intelligence agency of the financial sector under the control of Bangladesh Bank. If the overall legal framework of the country improves, only small-scale corruption will decrease. It says money is mostly siphoned off from Bangladesh through over-invoicing and under-invoicing. As there is no VAT on exports and no customs duty on imports, customs officials are less interested in verifying export shipments. Traffickers are increasingly taking advantage of this.

The report mentioned that some products have been imported by over-invoicing by 20 to 200 per cent. This means if a product is imported with a price of $20, it is shown as $200 in the receipt. It is not hard to assume how much money has been laundered. While the largest sum of money is laundered behind the cover of import export trade, this sort of cases progress the least. Since the enactment of the act till September 2022, a total of 752 cases were filed under the money laundering act. Of them, only 56 of these cases have been settled, sentencing 44 persons. BFIU says many government officials, businessmen and politicians are buying houses and cars abroad by laundering money under the guise of their children’s education abroad.

In this context, BFIU also mentions that money launderers are usually wealthy and influential. As a result, they spend a lot of money and hire big lawyers or try to delay the judicial process by some means. This often leads to frustration in the investigation process or judicial process. The Washington-based Global Financial Integrity (GFI) said Bangladesh lost $8.27 billion every year on average between 2009 and 2018 resulting from over and under-invoicing of the value of imported and exported goods by traders to evade taxes and illegally move money across international borders. As such, the country lost about $74 billion in nine years.

We believe the situation will improve if the recommendations given by experts and different think tanks are implemented. But how much is it possible to take strong measures to prevent money laundering without political will and commitment?