Regulators indifferent

Huge money flowing out of country illegally

12 August 2014 Kazi Zahidul Hasan

When the illegal outflow of capital from Bangladesh is going on unabated, the regulatory bodies are yet to come up with any effective measure to prevent the crime posing a potential threat to the country's future economic prospect, experts and official said.
They said, local businessmen, industrialists, politicians and high government officials have siphoned off huge money to various countries in the recent years taking advantage of poor oversight by the country's regulatory bodies, including Bangladesh Bank (BB), the Anti-Corruption Commission (ACC) and the National Board of Revenue (NBR).
The money has been flown out of the country through under and over invoicing, forgery, misuse of financial system and hundi, they added.
"Indifference among the regulatory bodies is evident and therefore it impaired the task of prevention of money laundering," former BB governor Dr Salehuddin Ahmed told The New Nation yesterday.
He added, even they are not serious about collecting information regarding the illicit fund transfer by the vested groups.
"A coordinated effort among the relevant government agencies is a must to curb the criminal offense," he said, adding, "Once they step forward with a coordinated effort, it would be easy for them to prevent the illegal capital outflow, specially taking place through under and over invoicing".
Dr Salehuddin further said that a continuous revision of banking data relating to fund transfer, import payment and export receipt by the businessmen and industrialists could help the central bank to detect the cases of money laundering.
"Illegal fund transfer through 'hundi' by the corrupt businessmen, government officials and politicians could also be prevented once BB authorities can effectively pursue the foreign governments in light with the existing memorandum of understanding (MoU) earlier Bangladesh signed with them," he opined.
He also suggested the central bank authorities to take support of the intelligent agencies to detect the people who are engaged in illegal hundi business.   
Bangladesh can now take the global support in fighting against money laundering, terrorist financing and other financial crimes as it got the membership of Egmont Group, formed with financial intelligence units of various countries.
Referring to media reports, he said, "Bangladeshi citizens have made illicit transaction to buy homes and accumulate wealth in various countries in the recent years. "The regulatory bodies can also seek such information from the members of Egmont Group countries to detect the cases of money laundering," he added.
When asked, he said, money laundering takes an 'alarming turn' now and if the trend could not be prevented immediately, it will have a disastrous impact on the economy.    
"Apart from the coordinated efforts of relevant agencies, a strong political will is necessary to prevent capital flight from Bangladesh," said a former adviser of the caretaker government Dr A B Mirza Azizul Islam.
Expressing disappointment over the rising trend of capital flight, he said, "The economy will bear the brunt of it if the government fails to arrest this ominous trend immediately."
"Curbing the crime is not enough," he said, adding, "The relevant government agencies should also work sincerity to bring back the stolen money in to the country."  
The central bank cannot detect the illegal outflow of capital transferred through hundi process. But, it could trace the cases of money laundering when it took place in banking channel, said BB spokesperson M Mahfuzur Rahman.
"A section of corrupt businessmen are used to launder money through under and over invoicing at import and export level. Preventing such illegal practice is the task of customs department, it is not the jurisdiction of the central bank," he added.
When asked, he said, we have learnt that a section of local businessmen, industrialists and politicians have bought homes in the countries like Malaysia, Singapore, Canada and the United Arab Emirates taking advantage of those countries second home project. "They might not transfer the money through banking channel to avail the facility, he said, adding, "They might be siphoned off the money through under and over invoicing or hundi."    
"We have already discussed the matter with the high officials of those respective countries in various international forums, but they refused to provide such information excusing legal barriers in their countries," said the BB spokesperson.  He, however, said that governments of those countries would only provide the information after signing of a mutual cooperation agreement with them.
"The central bank is trying to sign such deals with the Swiss and other governments of those countries so that the stolen money as well as other information relating to illegal transfer of capital by Bangladesh nationals could be brought back," he added.
ACC Chairman M Badiuzzaman said, the anti-graft body has given special emphasis on money laundering inquiries and investigation in the year 2013 and it conducted 118 inquires relating to money laundering during the year.
"We received complaints that many Bangladeshi citizens bought homes and apartments in foreign countries through illicit fund transfer. These complaints were in general, not specific. If we get specific complaint against any Bangladeshi citizen, then we will take the matter seriously," he added.
The ACC chief, however, refused to make any comment regarding indifference among the regulatory bodies.  
Admitting the matter, a senior NBR official said, "Preventing the incidences of illicit financial flow from the country is a huge task and to implement the task successfully, all the regulatory bodies should work together under an umbrella."
"But, the fact is that, all of them are now working haphazardly and finally such kind of work fails to bear any fruit," he added.      
According to a study conducted by the Washington based Global Financial Integrity (GFI), a staggering amount to the tune of $16.77 billion (equivalent to Tk 1,286 billion) has been flown out of the country in ten years from 2002 to 2011 through illegal money transfer.    

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