US doesn’t use sanctions as a political tool: Richard Nephew

This is your first visit to Bangladesh as the US state department coordinator on global anti-corruption. What’s the current level of cooperation between the two countries in terms of curbing corruption and money laundering?

The US and Bangladesh are working together to combat the common problem and challenge of corruption and money laundering. One of the main reasons why I’ve come here is to gain a better understanding of how Bangladesh and its people are coming face to face with corruption. And also to figure out new ways of helping Bangladesh. Right now, we are in good cooperation with each other. Looking into why we should increase this cooperation is also an important objective of my tour.

Money laundering has been a hot topic in Bangladesh in recent times. After his meeting with you, the Anti-corruption Commission’s secretary said you talked about new ways to solve this problem. What new ways were discussed in the meeting?

Those who are involved with money laundering, conduct this crime in many ways. These money launderers use many new techniques and processes. There are many new financial mechanisms and also transit points.

I’ve had a lengthy conversation with the representatives of the Bangladesh government about it. Certainly there are already relationships that exist between the US and the Bangladeshi authorities. Including the financial intelligence units in both of our countries. As all of us are working to address this problem, I think there are ways that we should strengthen that co-operation.

You mentioned that there is already a mechanism with the financial intelligence unit. When we talk about this particular issue, we have a Mutual Legal Assistance Treaty (MLTA) with our neighbouring country India. So are you thinking about putting a similar mechanism in place?

I’m not going to get into any specifics about where certain activities in cooperation could go. It’s worth stating at the outset though that there are already existing relationships, activities and cooperation that exist. The FBI for instance already works closely with colleagues here in Bangladesh.

Is the FBI directly engaged with colleagues here in Bangladesh in the issues of money laundering?

In the instance of fighting crime collectively, an element of which is money laundering. The financial intelligence unit has a relationship with the US FinCEN, which is our financial intelligence unit. There are already a number of different ways in which we are working together, government to government, of course the US embassy is the primary point through a lot of this activities can be pursued.

What does the US do when they find someone engaged in money laundering?

The United States has a variety of tools that we can use. First of all, an asset freeze, where you can, through administrative procedures, tell a financial institution that it shouldn’t allow money to move around any further to avoid it escaping our jurisdiction and of course, so that prosecution can also take place.

Also information sharing from where you might’ve had assets come from. So, there is a lot of different ways you could use to arrest the funds in question, arrest the people in question and then to ensure there is repatriation of the funds. Of course, all these things involve legal rule and having to follow procedures. These activities also require a lot of evidence.

Does US take any punitive action when a person stays in his own territory and transfers the funds to US soil?

The bigger issue of sanctions is that we have the ability through our national legislation to impose sanctions on actors who have engaged in corruption or transfer of funds related to corruption. It’s contained in what we call is the Global Magnitsky Sanctions programme, it’s very explicit that corrupt actors, those who provide material support to them and those who facilitate the transfer of funds, can have sanctions imposed against them.

The United States has used this sanction tool in the past and we will be prepared to use these tools in the future where the facts warrant it. So, Again, I can’t necessarily speak about any specific case, but do we have these tools and will we be willing to use them? The answer is yes.

When the issue of sanction comes up, people in this part of the world feel that it will happen overnight or it could be used as a political tool. Can you shed some light on how you put a particular individual or institution in the sanctioned list?

I think two things. One, it’s very clear, and I say it at the outset, we do not use our sanction tools for political purposes. We do not identify individuals of one political party and decide to impose sanctions against them. Our sanctions programme are conduct based. So if we find that someone, anyone, is involved with significant corruption, we then have the sanction tools that are necessary to impose consequences on them including assets freeze and visa restrictions. So, from that standpoint, while there may be a sense that there is a political element to it, the reason why sanctions are imposed is because bad conduct, is because illicit conduct and try and avoid that conduct from threatening US national security and to avoid the risk that could come from these bad actors getting away with things.

Could sanctions be imposed overnight? We do not describe and discuss in advance the use of the sanction tools that we have. In part because to do so we would give individuals an opportunity to escape and to evade the impact of sanctions. So, when the decision is made that a sanctionable conduct has taken place the US will act when it believes that the evidence is sufficient.

How much time it usually requires to make a conclusive decision on the sanctions?

Sanctions investigations can take a long time because they are part of the rule of law mechanism. They have to based on evidence, they have to be supported and defended in court. So, we don’t do them overnight from the stand point of, today we decided that we are going to impose sanctions and tomorrow we will do so.

There are always evidence, there are always rules and procedures which are followed. But really it depends a lot on the cases in question. In some cases, the evidence is very clear, it’s very concrete, it’s very direct, so investigations can be accomplished very quickly. In other cases, it takes more time. The process starts and stops with evidence being gathered, information being gathered to support a sanction’s decision and then for the action to be imposed as a consequence.

There is a perception in Bangladesh that countries like the US, Canada are safe havens for money laundering. And although the US raises its voice against corruption, it still allows it to happen. What are your views on that?

The United States is very clear like we like other countries still have work to do to address the issue of corruption in our country. That includes the risk that assets could come from other countries into the United States. If you read the US strategy on countering corruption, it’s very clear that one of our priorities is denying safe haven.

It’s just not denying safe haven outside in the rest of the world but also denying it inside the United States. There are a number of regulatory steps that are being undertaken now under existing laws as well as new pieces of legislations that could be passed to try and address the gaps that exist in the regulatory framework. And that’s to avoid precisely this type of problem.

I think one of the main things that we are very clear on is we are willing to be criticised when it comes to the issue of fighting corruption. Because we know that we are not perfect and we know that we got challenges too. And we think that’s why it’s important that investigative journalists, civil society actors and others need to not only have the right to point out where we have issues and flaws and things that could be fixed but actually, frankly, a responsibility to identify those problems so that we can work on them together.

So we think it’s incredibly important that governments embrace and support civil society actors, journalists and others even when they are asking tough questions, because that’s the only way we can fix our common problem of corruption and try and fight it more effectively.

Thank you for giving us your time.

Thank you very much.