BFIU for urgent agreements, finance on move

Financial intelligence urges signing key agreements for recovering stashes of Bangladesh's stolen assets from various countries and the finance adviser affirms interim government bid for such deals.

These formal arrangements are essential for creating robust legal frameworks to support this process, says the Bangladesh Financial Intelligence Unit.

Official sources indicate that the BFIU has submitted a list of ten major destinations known for capital flight from Bangladesh to the Ministry of Foreign Affairs.

The countries on the list include the USA, the UK, Canada, Dubai, Malaysia, Australia, Switzerland, Hong Kong, Thailand and China.

A taskforce dedicated to asset recovery, formed in 2010, had earlier recommended that the Ministry of Home's Public Security Division join the Asset Recovery Interagency Network Asia Pacific (ARIN-AP) and that the National Board of Revenue (NBR) participate in the Globe Network and Global Forum on Transparency and Exchange of Information for Tax Matters.

To expedite the repatriation of siphoned-off funds, BFIU sources state that the government must sign Mutual Legal Assistance agreements with these key destinations as well as other relevant agreements to facilitate requests for the return of misappropriated money.

Chief Adviser of the interim government Prof Muhammad Yunus has already initiated several steps to recover funds identified by both global and local media in connection with Bangladeshi tycoons.

Tax officials say they have already started probing income-tax files of former land minister Saifuzzaman Chowdhury to see his disclosed wealth in Bangladesh, and initial findings showed his wealth worth Tk 800 million in tax returns, apart from his reported cache of wealth in the United Kingdom.

Talking to the FE, Dr Salehuddin Ahmed, Finance Adviser of the interim government, confirmed government commitment to signing various agreements to further accelerate asset-recovery efforts.

"We are actively pursuing this and will enter into agreements with global networks," he said.

Dr Ahsan H Mansur, Governor of Bangladesh Bank, expressed a critical view on the situation. "There is no alternative; we must bring back the siphoned money that has depleted our country's financial system," he said, emphasizing collective cooperation for success.

Distinguished fellow at the Centre for Policy Dialogue (CPD) Professor Dr Mustafizur Rahman highlights the importance of gathering information on money launderers, which could be facilitated by joining global forums and signing treaties.

He notes that certain countries are particularly favoured by launderers for asset siphoning, and the Bangladeshi government must look for new agreements with those nations.

"If necessary," he suggests, "Bangladesh might need to purchase data, similar to the strategy employed by India to uncover information from Swiss banks."

Dr Zahid Hussain, former lead economist of the World Bank in Bangladesh, thinks identifying foreign assets is the first critical step in the recovery process.

"Money launderers often employ shell companies and layered investments to conceal their activities," he says, stressing the need for both bilateral and multilateral agreements to locate and recover stolen assets.

"Such actions serve to alarm launderers and deter offences," he adds.

Dr Nasir Uddin Ahmed, former chairman of the National Board of Revenue (NBR), notes that while successful asset-recovery stories are rare, Bangladesh must persist in its efforts despite the high costs involved.

"Many developed countries do not inquire about the source of investment funds, thus complicating recovery attempts," he says.

Experts have said the Global Common Reporting Standard, as per the International Financial Reporting Standards (IFRS), could assist Bangladesh in tracing stolen funds effectively.

Mohammad Forkan Uddin, president of the Institute of Chartered Accountants of Bangladesh, corroborates this view, stating that adherence to IFRS is mandatory for both listed and private companies in Bangladesh.

"By following the common reporting standards under IFRS, Bangladesh can more easily ascertain the forms of siphoned money invested in foreign jurisdictions."

A BFIU report indicates that participation in the Camden Asset Recovery Inter-Agency Network (CARIN), the Automatic Exchange of Information (AEOI) framework of the OECD, and strengthening Mutual Legal Assistance with key destinations are essential steps moving forward.

Although the financial intelligence acknowledges the utility of several existing international networks-including the UN's StAR initiative, the Financial Action Task Force (FATF), and INTERPOL's Stolen Asset Recovery (SAR) Project-the current measures prove insufficient for claiming siphoned-off assets.

Anis A Khan, an independent director at Trust Bank, underscores the necessity of reciprocal government cooperation in asset recovery.

He urges the conclusion of bilateral agreements to repatriate assets shown to be illegally acquired. "Ensuring that regulators have appropriate procedures in place will facilitate a smoother recovery process."

Intelligence officials have recommended pursuing multilateral agreements on mutual administrative assistance in tax matters in line with the relevant OECD Convention.

The complexity of recovering stolen funds remains evident, as demonstrated by ongoing challenges related to the reserve heist in Bangladesh, despite a favourable Manila court ruling.

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