Less money laundering cases involving narcotics, smuggling

One of the main objectives of the Money Laundering Prevention Act was to halt drug trade, human trafficking, terrorism funding and smuggling. And yet there are very few cases under this act against persons involved in such crimes. In the reports of various international agencies, Bangladesh’s name appears on the lists of countries at risk of serious crimes of drug trade and human trafficking. The reports say that Bangladesh is being used as a drug route by several local and foreign drug rings.

According to 13 senior officials of four investigating agencies and experts, the field-level officials of various agencies including the police and the Directorate of Narcotics Control, have very little knowledge of this law. They have not been trained accordingly. That is why the money laundering act is not being used to file cases against the narcotics trade, gold smuggling, currency smuggling or human trafficking.

Prothom Alo’s investigations found information on 752 money laundering cases over the past 20 years. Of these, only 20 are against drug traders. And 8 cases are against gold smugglers, 15 against currency smugglers and 5 against human traffickers.

In the national strategy paper for the prevention of money laundering, drawn up in 2021, it was said that due to its geographical location, Bangladesh was on the risk list of money laundering, as it was for narcotics, gold smuggling and human trafficking in South Asia. Gold is used as a means of transaction in drug trade.

According to the narcotics control directorate, they filed 188,000 cases over the last 20 years under the narcotics control act. Yet they filed only three cases under the money laundering act – one in Dhaka and two in Chattogram. According to the CMM court’s general register, there were 80,696 cases under the narcotics act in the approximate six years from 2017 to 31 August last year, at 50 police stations of Dhaka Metropolitan Police (DMP).

Agreeing that the number of cases was rather low, additional director general of the narcotics control directorate Md Azizul Islam told Prothom Alo, “We are investigating allegations of money laundering against quite a few drug traders.”

According to the information of the cases, Chattogram’s Zahidul Islam who was accused of drug trading, was killed in 2015 in a ‘gunfight’. There was Tk 110 million (Tk 11 crore) in his bank account. Three years after his death, a money laundering case was filed against him and two of his associates. Deputy director of the narcotics control directorate, Ahsanur Rahman, submitted the charges in this case. He told Prothom Alo, “Only three officers of the directorate have training in money laundering case investigation. That is why there are less cases being filed.”

The narcotics control directorate in February this year filed a case against Rahima Begum, a drug dealer in one of Dhaka’s slums. A total of Tk 210 million (Tk 21 crore) was found in her bank account.

The police's Criminal Investigation Department (CID) has filed 17 more money laundering cases for drug dealing in Cox’s Bazar. But it is alleged that most of the accused are mere carriers. The actual influential drug traders remain out of reach.

The Customs authorities have only filed 12 cases under the money laundering act in gold smuggling incidents over the past 20 years. Yet over the past three years 137 cases with these allegations have been filed under the Special Powers Act with the Airport police station in the capital. Only four money laundering cases were filed in this span of time.

On 5 February 2018, a passenger of Regent Air, Md Mithu, was detained at Dhaka’s Hazrat Shahjalal International Airport. Dollars, pounds and other foreign currency amounting to Tk 12.4 million (Tk 1 crore 24 lakh) was recovered from his bag. He was charged with smuggling under the Special Powers Act. The CID charges stated that the ring was slipping past the customs intelligence and the civil aviation authorities to smuggle gold and foreign currency.

Speaking to Prothom Alo, former additional inspector general of police Mukhlesur Rahman said, one must dig very deep to nab those involved in money laundering. It is not possible to investigate such cases without expert police officers or intelligence officers.

Investigating agency officials says that now more money laundering is being done by means to ‘hundi’ (informal and illegal money transfer). There are powerful hundi gangs inside the country and outside too. Such networks spread from the cities to the villages.

Investigations reveal that over the past one decade, 10 cases were filed under the money laundering act in relation to smuggling foreign currency. And 55 cases were filed with the same allegations under the Special Powers Act. In a latest development, CID arrested 16 hundi dealers last September. In that incident, three cases were filed under the money laundering act in Dhaka and Chattogram.

The case documents show that seven years ago the CID traced Tk 280 million (Tk 28 crore) in the MFS account of a certain Saidur Rahman. At the same time, Tk 140 million (Tk 14 crore) was withdrawn from the account. Also, two years ago CIS filed money laundering case against four persons including Kajal Rekha for involvement in hundi business. The gang had brought in Tk 2.9 million (Tk 24 lakh) by means of hundi. The two cases are at the witness deposition stage.

According to police sources, around 5500 human trafficking cases were filed up till 2020. Yet only six money laundering cases were filed.

Seven years ago a human trafficking gang lured a certain Shameem to Malaysia with promises of a job. The gang trapped 20 persons there, including him, and collected nearly Tk 5.5 million (Tk 55 lakh) as ransom. CID traced Tk 16.1 million (Tk 1 crore 61 lakh) in the bank accounts of Arifuzzaman and Khatija Begum, members of the gang.

Investigating officer of the cases and CID’s financial crime unit’s inspector at the time, Ibrahim Hossain, told Prothom Alo that in such cases, the transactions are mostly done by means of hundi. There are fewer cases under the money laundering act due to lack of evidence. But money laundering is also conducted through banking channels. For example, two years ago a case was filed against the former MP of Lakshmiput-2, Kazi Shahidul Islam alias Papul for money laundering involving a sum of Tk 380 million (Tk 38 crore) through human trafficking. The case is under investigation. In a report, CID informed the court that Tk 3.55 billion (Tk 355 crore) had been deposited in the bank accounts of Shahidul, his wife, daughter, brother-in-law and an employee.

Four cases under the money laundering act were filed for terrorist funding. These cases involved allegations of laundering Tk 124.3 million (Tk 12 crore 43 lakh). There were 19 accused in these cases. Such a case was filed against four persons including a deputy assistant engineer of the public works department at the time, Nafiz Ahmad. They were accused to funding the banned militant organisation Jamaatul Mujahideen Bangladesh (JMB).

Information was also found on two cases against two businessmen of the real estate sector for misappropriating money by cheating clients.

After the money laundering act was passed in 2002, Bangladesh Bank or other agencies authorised by Bangladesh Bank, could have investigated such cases. In 2008 that law was abolished and replaced the money laundering prevention ordinance. That was later abolished and the money laundering prevention act was enacted in 2009. Only the Anti-Corruption Commission had the authority to conduct investigations under this act. In 2012 the law was repealed once again. In 2015 the law was amended and 27 types of crimes were included in the act. ACC only had the authority to investigate the crime of bribery and corruption. Investigations into the remaining 26 types of crimes were vested upon CID and other agencies.

ACC recently submitted a letter to the cabinet division asking for amendments in the money laundering preventing laws. It was said that ACC didn’t have the authority to investigate cases involving money laundering being done by means of hundi or in the guise of business. The letter requested for ACC to be given the authority to investigate seven types of crimes including currency smuggling and crimes related to customs and tariff.

The primary responsibility of gathering information of money laundering lies with BFIU. Three former and serving officials of the country’s lone financial intelligence unit say that suspicious transaction reports (STR) have increased in the private financial sector including the banking sector. Due to a lack of understanding of money laundering laws, these institutions fail to provide reports of any proper standard. Officials of these institutions must be provided with training. BFIU must also be provided with AI-equipped software as in the financial intelligence units (FIU) in developed countries.

The national strategic paper on preventing money laundering says that there is no central data bank concerning money laundering crimes. There is a lack of skilled workforce in the law enforcement agencies. They must be provided with training at home and abroad. A neutral prosecution service needs to be established. Coordination needs to be stepped up between investigating officers and prosecutors.

Executive director of Transparency International Bangladesh (TIB) Iftekharuzzaman, speaking to Prothom Alo, said there is a lack of skill that is required for investigating money laundering cases. There is no coordination among the agencies vested with investigating such crimes. The investigating officers to not have the authority to nab the powerful persons involved in money laundering.

* The report, originally published in the print and online edition of Prothom Alo, has been rewritten in English by Ayesha Kabir