The Financial Express

Govt updating info deal to recover laundered money

| Updated: December 03, 2022 18:50:42

Govt updating info deal to recover laundered money

Redrafting deal documents is underway as the government is set to sign sure-fire Mutual Legal Assistance (MLA) treaties with countries to obtain information and retrieve laundered money, officials say.

The step is taken amid swinging criticisms from various quarters in society, including apex-court judges, of governmental "failure" in bringing back huge money stashed abroad and also "absence" of effective efforts to prevent further siphoning off money.

The High Court recently asked the Bangladesh Financial Intelligence Unit (BFIU) to sign MLA treaties with countries where the money was possibly taken to, by February 5 next year, and submit a progress report on the recovery.

Thereafter, the BFIU informed the Financial Institution Division (FID) that it would need MLA treaties with the USA, the UK, Canada, Singapore, Australia, Malaysia, the United Arab Emirates, Switzerland, Thailand, and Hong Kong for the hunt.

And the FID early last month had a meeting with its secretary Sheikh Mohammad Salim Ullah in the chair. The meeting formed a 10-member subcommittee, headed by a BFIU director and comprising representatives from the FID, foreign ministry, home ministry, law ministry, attorney-general's office, the Anti-Corruption Commission, the National Board of Revenue and the criminal investigation department.

The committee has been asked to prepare a draft document on MLA treaty by reviewing the previously signed treaty documents and internationally recognised model treaties.

Presently, Bangladesh has MLA treaties with only two nations-India and South Africa.

Officials say as a member of various global organisations the BFIU receives and shares intelligence with others but that info is not valid as legal document and cannot be submitted to the court as proof of money laundering.

After investigating the intelligence tip-offs locally, info can be sought from the countries concerned if bilateral MLA treaty remains in force. But as Bangladesh has such treaties only with two countries so far, the money-laundering info could not be received from countries where laundered money is believed to have landed.

An FID official told the FE that the committee has been asked to prepare the treaty draft as soon as possible and submit to the secretary, since there is a standing court order for signing deals by next February.

Head of BFIU Masud Biswas could not be reached for comment on his fresh bid to prevent money laundering and bring the laundered money back home.

Trade-based money laundering has become major concern for Bangladesh and it remained unabated even while the country is reeling from a severe crisis of foreign currencies.

Central bank governor Abdur Rouf Talukder at an event in Dhaka Thursday revealed how money is being laundered through under-and over-invoicing now.

He said the central bank stopped nearly 100 letters of credit recently because they were linked with over-invoicing.

Mr Talukder said many importers showed prices of Mercedes Benz vehicles much lower than their actual prices. "Mercedes Benz-brand vehicles are being imported at a cost of US$20,000 although its actual price is $100,000."

He said the remaining amount had been sent abroad through "hundi" or illegal channel.

According to the Global Financial Integrity report 2020, more than US$7.5 billion is laundered from Bangladesh every year of which majority is done through trade mis-invoicing.

Abu Hena Mohammad Razi Hasan, former head of the Bangladesh Financial Intelligence Unit, advocates that Bangladesh should sign MLA treaties with more countries to get assistance for preventing money laundering.

"If there are bilateral treaties with countries where smuggled money landed, required info and documents can be sought from them when needed," he says.

Mr Hasan, however, feels that success in bringing back laundered money depends on cooperation from the governments concerned where money parked.

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