Honing anti-money laundering capabilities

FE Team | Published: January 06, 2018 18:09:49

The growing menace of money laundering, apart from that of terror financing, is a worrying development. This is more so in a situation where the Finance Minister, who heads a body relevant to these matters, admits the country's lack of preparedness to combat them. Most people are now aware of the humongous size of funds that are being taken out of the country every year using various illicit means, courtesy the Global Financial Integrity (GIF). Between 2004 and 2013, an estimated US$59 billion, as the GIF reported, had flown out of Bangladesh. It was indeed a great shock for all concerned when the content of the GIF report had made newspaper headlines. A part of the flown-out funds was surely generated through criminal activities and laundered with a view to integrating the same into the legal financial system. However, the amount remained unknown. It is widely believed that a fraction of the laundered money might have been used for financing terrorist activities.
As terrorist activities gained strength in recent years, actions were initiated at the international and national levels to counter money laundering and terror financing. Bangladesh also joined the global fight against the growing menace. The Asia Pacific Group (APG) on Money Laundering had given Bangladesh a long list of actions it needed to take to heighten its capabilities to fight money laundering and terror financing activities. Accordingly, the government prepared a national strategic paper (2015-17) which included 138 actions. A report published in this paper last week noted that out of the identified set of actions, 71 have been fully and 36 partially implemented and 31 are not at any stage of execution. In fact, the actions that have been bypassed reportedly include some basic tools that are mandatory to fight the problems of money laundering and terror financing successfully.
The high-level committee asked the agencies concerned last week to implement the remaining actions by March next when work on the preparation of another two-year national strategic paper would begin. The country's lack of preparations relates to delays in investigation and delivering judgment in money laundering and terror financing cases. Besides, the Financial Intelligence Unit (FIU) operating at the central bank has yet to be enabled to gather relevant information from the database of different government agencies. The authorities can hardly show any success in retrieving money laundered abroad.
The truth is that relevant government agencies do neither have capabilities nor are they serious enough to plug the holes that are used in illicit fund transfers. The strategies discussed and ordered for implementation, unfortunately, get stuck up at the lower and field levels. Interestingly, the high-ups who issue instructions, do not take the necessary follow-up actions. Such failures, however, are quite common in the country's administrative arena. The government must not show any laxity in correcting the lapses that have so far been identified. This is an imperative in order to meet both national and international obligations in the matters of anti-money laundering and combat terror financing activities. Otherwise, the country might continue to get unsavoury evaluation at the relevant international forums, including the APG.