There is no
denying the fact that money laundering means unlawful transfer of money indicating
unauthorized transfer of money relating to illegal source like terrorism and
malpractice of properties or assets. Besides, it may happen when money is sent
abroad without legal permission of the Central Bank. On the other hand,
transmission of foreign funds if occurs without any legal source then money
laundering takes place. It is the course of action of transforming the proceeds
of transgression and sleaze into allegedly lawful assets. Some countries define
money laundering as obfuscating sources of money, either intentionally or by
merely using financial systems or services that do not recognize or pathway
sources or destinations. Other countries define money laundering to include
money from bustle that would have been a misdemeanor in that country, even if
it was legal where the actual ways occurred. Sometimes breech of law may be
involved to transfer fund where cash delivery in the form of consignment is
made without any legal source in the form of Hundi.
Recently, a television discussion has been
held in the BTV where the speakers have nicely represented the case of money
laundering where many different sides of transfers have been highlighted. According to them, in a number of authorized
and dogmatic systems, however, the term money laundering has been interpreted with other forms of financial and business felony, and is sometimes used more generally to
include maltreatment of the financial system (involving things such as
securities, digital currencies, credit cards, and customary
currency), including terrorism financing and elision of international sanctions. Most anti-money laundering laws
openly conflate money laundering (which is concerned with source of funds) with
terrorism financing (which is concerned with destination of funds) when
regulating the financial system. The
following are the key definitions of money laundering:
Money laundering is defined at section 2 (k) of the MLPO as
follows:-
(i) Transfer, conversion,
remitting abroad or remit or bring from abroad to Bangladesh the proceeds or
properties acquired through commission of a predicate offence for the purpose
of concealing or disguising the illicit origin of the property or illegal
transfer of properties acquired or earned through legal or illegal means.
(ii) To conduct, or attempt to
conduct a financial transaction with an intent to avoid a reporting
requirement under this ordinances
(iii) To do or attempt to do
such activities so that the illegitimate source of the fund or property can be
concealed or disguised or knowingly assist to perform conspire to perform such
activities.
Suffice it
to say that Money laundering is the process of transforming the proceeds of
crime and corruption into ostensibly legitimate assets. In a number of legal
and regulatory systems, however, the term money laundering has become conflated with other forms of financial and business crime, and is sometimes used more generally to
include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency),
including terrorism financing and evasion of international sanctions. Most anti-money laundering laws
openly conflate money laundering (which is concerned with source of funds) with
terrorism financing (which is concerned with destination of funds) when
regulating the financial system. Some countries define money laundering as
obfuscating sources of money, either intentionally or by merely using financial
systems or services that do not identify or track sources or destinations other
countries define money laundering to include money from activity that would
have been a crime in that country, even if it was legal where the actual
conduct occurred. Bangladesh is a developing country located in South Asia
having boarders with India on the west, north and north east, Myanmar on the
east and Bay of Bengal on the south. Estimated population is around 150 million
living in an area of about 150,000 square kilometers. Current GDP is over
US$280 billion and GDP per capita is about US$ 885. The country has significant
earnings from expatriate Bangladeshis and from export of garments products. It
is a democratic, constitution based republic. The government is divided into
executive, legislative and judicial branches. The executive branch is led by
President, elected by the parliament members, an elected Prime Minister and the
appointed cabinet chosen by the Prime Minister mostly from the parliament
members. The legislative branch, known as Jatiya Sangsad (National Parliament)
consists of 300 directly elected parliamentarians and an additional 45 women
members selected by the parliamentarians from the reserved quota. Three tiers
court system in Bangladesh is comprised of 64 District Courts, one High Court
and the Supreme Court, which is the country’s highest court. The legal system
combines civil and common law principles. Both accused and the
prosecution can go for appeal from the District Court to the High Court
Division of the Supreme Court and from the High Court Division to the Supreme
Court. Special Courts are often constituted under some Acts by the Government
to serve essentially as fast-track courts. Money Laundering cases are mostly
prosecuted in Special Courts established for the purpose. In Bangladesh illegal asset transfer is understood and mainly as
Money Laundering. Meaning of Money Laundering as per Money Laundering
Prevention Act MLPA 2012,
whosoever commits following offenses;
1) Transfers money or property earned through legal or illegal
means concealing or disguising the sources by way of sending abroad or bringing
within the territory
2) Conduct or try to conduct any financial transaction in such a
way so that it does not require any exposure under this Act.
The issue of money laundering and recovery of assets, although a
late initiative in Bangladesh is gaining increasing importance and attention.
The socio- eco political situation in Bangladesh and existence of large scale
corruption at all level gave sufficient signals to the relevant authorities
regarding the high susceptibility of illegal money transfer to unknown
destinations abroad. During a special kind of two year long Care Taker
Government (2007-2008) in Bangladesh the issue of corruption and money
laundering was a very high agenda. Almost all the top leaders of the main
political parties and the leading business personalities were arrested and
cases were initiated against them for corruption and transfer of money abroad.
People also generally supported the actions since they had been victims of
corruption for quite a long period. Even if the allegations raised against
political leadership, government functionaries (bureaucrats) and business
community are partially true that is sufficient to conclude that huge amount of
national assets have been laundered abroad. Revealing and tracing of some
money laundering offenses committed by high profile persons created matter of
high concern to all of us. Therefore, the necessity for recovery of the illegitimately
transferred assets of a low income country like us is a high national agenda.
The sociology-eco-political context of Bangladesh is such that
it makes the country vulnerable to illegal transfer of assets outside the
country as a result of which Bangladesh faces a range of money laundering
threats. Following are the most common offences generating substantial criminal
proceeds which are the main sources of money laundering:
-
inducement
-
mistreatment of public office
-
securities fraud
-
misappropriation
-
human trafficking
-
extortion, and
-
drug trafficking, etc
It is obvious that
Bangladesh authorities highlights corruption, drug trafficking and human
trafficking as the most serious sources of illegal transfer of money. According
to the estimate of World Bank, national proceeds of corruption are worth more
than 3% of GDP. Moreover, the location of Bangladesh in between the golden
triangle and golden crescent makes it further vulnerable to illegal inflow and
out flow of assets. The prevalent insurgencies and activist and terrorist
activities in countries around Bangladesh also cause trafficking of arms
through Bangladesh, which in turn increases the chance of money laundering from
Bangladesh.
Bangladesh has a cash based economy rather than accrual
basis. The common methods of laundering proceeds are structuring transactions
through the banking sector and bulk cash smuggling. Alternative remittance
system (HUNDI) is a common phenomenon in Bangladesh for sending illegal money
abroad. Hundi transition does not leave any record and therefore is no chance
of auditing. Therefore, the enforcing agencies can’t detect any information for
taking actions against these illegal transactions.
Hundi system out of many transfers is preferred for a number of
reasons i.e.
1.
Money can be transited easily and quickly
2.
Transaction can cover remote areas and it can be transferred hand to hand where less transaction cost
involved exchange rate is attractive where no down payment is required and where no evidence is left and
anybody for any can be involved
Bangladesh has been actively pursuing anti money laundering
steps since 2000. Bangladesh joined Asia Pacific Group (APG) since its
inception in the year 1997 and commenced to prepare and pass an AML
statute. It was the first jurisdiction in the SAARC region to pass stand-alone
AML legislation with passage of the Money Laundering prevention Act (MLPA) in
2002. Focusing on implementing effective AML measures is a priority of the
Government of Bangladesh, particularly in the banking, non-bank financial
institutions, money exchange house and insurance sectors. Recently the
securities market has also been included under the umbrella.
The finance Division coordinates with the ministry of Law,
Justice and Parliamentary Affairs concerning AML/CFT laws including drafting
regulations to the MLPO and Money Laundering Prevention Act (MLPA). Bangladesh
Bank is the government entity that is responsible for administering the MLPA
2012 and is responsible for implementing a number of TF provisions contained in
the ATO 2008. FIU
undertakes the role in supervising AML/CFT preventative measures.
It is administrated by Home Ministry. Major units within the
police include the Criminal Investigation Department (CID) consisting of
approximately over 1500 staff, Special Branch (Intelligence), training
institutes and a number of metropolitan and regional police forces. The
Bangladesh Police does not have role to investigate ML offences.
The NBR is the taxation and customs authority of Bangladesh
formed under The National Board of Revenue Order, 1972-President’s Order No.76
of 1972, NBR is under the Internal Resources Division (IRD) of the Ministry of
Finance (MoF) who also try to track black money and illegal transaction through
taxation and custom intelligence unit.
BGB is a paramilitary force whose principle role is boarder
security, and includes investigating smuggling across Bangladesh’s borders.
■
Bangladesh largely comply with the terms of Articles 6 of the Palermo
Convention,
although there are gaps in its coverage of
predicate offences and property.
■ The MLPA and ATO 2008
contains forfeiture and freezing provisions which specified
as money laundering and terrorist financing.
Analysis of provisional measures and
confiscation for TF. In relation to money
laundering, the ACC Act is also important to
an assessment of Bangladesh’s forfeiture and
freezing regime.
■ The ACC is now the
investigating organization for ML offences. In cases where the
ACC obtains money laundering conviction, it
is possible that the ACC will use the
Forfeiture powers available under the MLPO. However
this is one of many areas about
which there is uncertainty? It may be
mentioned that the ACC instead seeks to use its
Forfeiture Powers under ACC Act, particularly
where the predicate offences is
Corruption-related and the ACC Act provides
for forfeiture and freezing of proceeds
of corruption offenses
The MLPO confers the following investigative powers: Bangladesh
Bank is able to order banks and financial institutions to freeze accounts to
allow a period for investigation where it is suspected that a transaction
involves proceeds of crime. The
FIU is able to seek information regarding suspected money laundering from another
country on the basis of ‘any contract signed or arrangements ‘section 24(2); on
demand from Bangladesh Bank, reporting institutions must provide (in the case
of open accounts) identification information and (in the case of closed
accounts) previous transaction records. The ACC Act confers
strong powers upon the ACC for the identification and tracking of property in
corruption investigations. These include powers under a compel a suspect
or any other person who may be holding property in his or her behalf to submit
a statement of assets and liabilities and to furnish any other information:
summon witnesses, interrogate them under oath and take evidence under oath:
request discovery of any document: call for public records: issue warrants for
examination of documents; require any person to furnish information in matters
relating to any inquiry or investigation; call for any information from the
government or any other authority or organization under the government in the
manner determined by the ACC. In Article 51: General provision states that: The return
of assets pursuant to this chapter is a fundamental principle of this
Convention, and States Parties shall afford one another the widest measure of
cooperation and assistance in this regard. It is obvious that Bangladesh is
considerably newly active nation in the National and International arena in
this aspect of combating illegal transfer of assets abroad and recovery of the
same. The asset recovery provision of UNCAC action such as prevention and
detection of transfer of proceeds of crime, measures for direct recovery of
property, mechanisms for recovery of property through international cooperation
in confiscation, return and disposal of asset etc. are very helpful for
perusing the recovery of asset for less advanced countries like Bangladesh.
However in order to reap benefit out of these provisions respective
parties must have enabling infrastructure, minimum expertise and institutional
strengths. Bangladesh lacks ability to derive full support from the
international bodies at the present state of preparation.. The proceedings of
money laundering related cases inside Bangladesh takes much longer time in
obtaining court verdict required for recovery of assets from outside the country.
The influence of political and business forces are so strong in the
country that if they can manage to delay the matter and get a bit
longer time, in most cases they can manage the events to their favour with the
change of government in power. It
is learnt from the Bangladesh Bank that so far it was possible to conclude
agreements for mutual legal assistance with nine countries only. We have to go
a long way ahead in this regard. Bangladesh also has to finds its way for
tapping benefit from all international agencies which are helpful for recovery
of assets. It requires competent expertise and resources. International
cooperation in line with the spirit of UNCAC is very much required for the
purpose.
In view of the above, it is evident that the
people of Bangladesh must take permission from the Central Bank at the time of
sending money abroad and without obtaining permission, no money can be transferred. The law is a
binding phenomena, no one should ignore it. The foreign exchange department
examines the causes of transfer in due course and takes action accordingly.
Besides, many children of Bangladesh remain busy with studies abroad and as
such their parents send money by any means ignoring the rules existing in the
country. In that particulars case, the people face difficulties and despite
time constraint they do this frequently. These unusual practice ignoring the
law of the country as promulgated by the Central Bank needs to be stopped
immediately so that the actual foreign exchange is computed correctly for the
sake of economic as well as financial adequacy systematically as a tentative
flow.
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