Money laundering refers to illegal transfer of money from one place to another. It also indicates hiding of the source of money. Money laundering is a transnational organised crime. On the other hand, terrorist financing is an issue of high concern in the present-day the world. Some people combine money laundering and terrorist financing together. Terrorists need money for financing their activities. Funding is a lifeline of terrorist activities.
There are mechanisms to prevent money laundering, both at domestic and international levels. In Bangladesh, we have three institutions which work for stopping money laundering. These are the Bangladesh Bank (BB), the CID (Criminal Investigation Department) and the Anti Corruption Commission (ACC).Through STR (Suspicious Transaction Report), the BB can track and monitor terrorist financing with the help of the CID. If a client's transaction increases unusually, then the bank can ask the client to explain the reasons behind such unusual increase of transaction. The bank will send a message to the central bank for inquiry and the BB will ask the police for a quick investigation. Through this system, we can stop money laundering and the BB is working in this regard. The central bank not only helps the government to make laws but also it trains its officers on money laundering practices. The BB trains its senior officers so that they can make a quick response and find out the original report of transaction of a client.
In international arena, we have the United Nations (UN), the US treasury and the Financial Action Task Force (FATF) to stop money laundering and terrorist financing. The UN has different conventions, protocols and the Security Council resolution to combat terrorist financing and money laundering. We have international conventions on transnational organised crimes which define money laundering and terrorist financing as punishable crimes. When a state signs the convention, it becomes mandatory to obey it. Under this convention, the state must reform its domestic mechanism for updating it to the international standard. The US Treasury mainly indicates the American central bank. Beside the UN, the US treasury is working worldwide to combat money laundering and terrorist financing. It has a financial crime network throughout the world and has large activities to improve financial intelligence. The FATF is a powerful international financial actor. It is mainly a Paris-based organisation but have some regional bodies like APG (Asia Pacific Groups) on money laundering. The organisation works for determining and implementing international standard to stop money laundering and combat terrorist financing. The FATF has 49 recommendations for states to follow if it becomes its member. Among the 49 recommendations, 40 are related to money laundering protection and 9 for combating terrorist financing.
These three institutions jointly create pressure on different states to enact anti- money laundering and terrorist financing laws at the domestic level. They also urge the states to upgrade or reform old laws. The Bangladesh government has recently made two amendments in the Anti-Terrorism Act (2012) and Money Laundering Act (2013), because of the pressure from these three institutions. The pressure was mainly on the Bangladesh Bank and the central bank created pressure on the government to make these two amendments. Many analysts believe that in our country, the Jamaatul Mujahideen Bangladesh (JMB) got funding and became a terrorist group. Terrorists need money to run their activities. If they don't get the money, they cannot continue their terrorist activities.
We need inter-agency collaboration and cooperation among the BB, the ACC and the law enforcement agencies. To stop money laundering and combat terrorist financing, cooperation and collaboration among these three institutions is very urgent. The number of commercial banks is increasing and they have thousands of branches both in urban and rural areas. From rural areas, information may not reach the central bank quickly and the central bank may not respond immediately after getting info. So we need to update the communication channel between all commercial banks and the central bank.
Usually money is transferred through banking channel to provide financing to the terrorist groups. But now-a-days, a new type of strategy has emerged in the Muslim countries. If money is transferred through banking channel, then we can identify, but if someone donates money as charity, we can't trace it because in the charity, the donors may provide cash, not given by cheque. So it is informal as it is out of banking channel. One can't trace it. Wealthy Middle Eastern people may donate during the month of Ramadan in the rural areas. The common people of the rural areas may not know the intention behind such donation. So how can we prevent terrorist financing? The government should take several steps like transaction through banks to stop money laundering and terrorist financing.
The writer is an MSS student, the Dept. of International Relations,    the Dhaka University.                      imranabdulla43@gmail.com
Curbing illegal money transfers
Abdulla Al Imran | Published: May 13, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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