No strategy yet to bring laundered money back
The government is yet to determine a certain strategy to bring laundered money back. A draft strategy was formulated two years ago, but it is still in the custody of the national coordination committee on preventing money laundering and combating financing of terrorism for taking final decision.
The committee held its last meeting on 28 November 2019 and there is no sign that the next sitting will be held any time soon.
Though lots of discussions took place in the recent days over legalizing the unreported offshore assets, the ground reality is in stark contrast as there is no effective initiative from the authorities. It is a different issue if one voluntarily brings his or her undisclosed assets back paying the tax imposed in the proposed budget for fiscal year 2022-23.
Nowadays, the money obtained through bank loans is also being sent outside home, just like the money of bribes and corruption. It has been a common scenario for Bangladeshis to invest in so-called second homes in Malaysia and Canada, hotel business in Dubai and Singapore and to get settled in Europe and USA after buying assets there.
The extensive money laundering made the government worried and prompted it to provide a scope for legalizing the undisclosed offshore assets after paying a tax of 7 per cent in the proposed budget for fiscal year 2022-23.
Asked about the issue, Finance Minister AHM Mustafa Kamal, who is also the chief of the national coordination committee, told Prothom Alo that the meetings could not be held regularly due to the Covid-19 pandemic.
“The meeting will be called soon. Importance is now being placed on bringing the laundered money back. We are hopeful of the initiative taken to bring the money back,” he said, adding that the process would be geared up in the coming days.
Other members of the committee are : chairman of Anti-Corruption Commission (ACC), principal secretary of the Prime Minister’s Office (PMO), attorney general, central bank governor, chairman of Bangladesh Securities and Exchange Commission (BSEC), inspector general of Bangladesh Police (IGP), chairman of National Board of Revenue (NBR), and secretaries to Finance Division, Financial Institutions Division, Legislative and Parliamentary Affairs Division, Ministry of Home Affairs, Ministry of Commerce. The chief of Bangladesh Financial Intelligence Unit (BFIU) acts as member secretary.
According to the government regulations, the national coordination committee will formulate and implement policies on prevention of money laundering and terrorist financing. It has been empowered to take any decision in this regard.
Besides, the BFIU has been entrusted with determining a strategy to bring the laundered money back, after reviewing the initiatives that other countries have taken to legalize the undisclosed money kept in the Swiss Bank and in other foreign nations. As per rules, the BFIU had formulated a strategy at the middle of 2020 but it is still awaiting clearance at the finance ministry.
The strategy said there is scope of money laundering through electronic transactions, debit and credit cards, education and medical care fees, in addition to the trade-based methods and hundi. This money are being deposited in bank accounts, statutory deposits (under the immigration scheme) in other countries; and being used to buy houses, hotels and other immovable assets, to do business and other transactions.
It also noted that a total of 4,315 Bangladeshi nationals have availed the facility of Malaysia My Second Home (Mm2h) programme of the Malaysian government from 2003 to 2018. People aged below 50 years need to have Tk 10.5 million in cash to avail the Mm2h facility while those aged above 50 years require Tk 7.4 lakh in cash. Those who migrated to Malaysia permanently took around Tk 20 million each from the country. Thus a total of Tk 85 billion was laundered from the country to the Southeast Asian nation.
Other destinations of undisclosed Bangladeshi assets are Canada, the United States, the United Kingdom, Switzerland, United Arab Emirates, Singapore, Hong Kong, Australia, and various European countries.
Meanwhile, the Swiss National Bank (SNB) said in its annual report that the Swiss banks witnessed the highest deposition from Bangladeshi individuals and institutions in the previous year. At the end of 2021, the amount deposited by Bangladeshis in the banks of Switzerland grew 55 per cent to stand at Tk 82.76 billion (Fr 870 million). The figure was Tk 53.48 billion in 2020.
Collecting primary information and intelligence reports and identifying assets have been described as strategies to recover the laundered money. The next course of action will be confiscation of assets, joint investigation by both countries and initiative to reclaim the laundered money.
However, these are lengthy processes and this is why an initiative can be taken to bring the money back by imposing high tax, it added.