Annually $15b laundered from Bangladesh

Economists suggest how to repatriate siphoned wealth

FE REPORT | Published: November 02, 2024 23:23:55

A grave allegation is brought by the executive chief of Transparency International Bangladesh (TIB) that Bangladesh Bank effectively served as a conduit for corruption, enabling widespread financial misconduct, while other watchdogs also looked on.
Iftekharuzzaman, Executive Director of TIB, speaking Saturday at a seminar titled 'Odious Debt and Recovery of Bangladesh's Laundered Wealth', jointly organised by the Economic Reporters' Forum (ERF) and Sombhabonar Bangladesh, asserted that both Bangladesh Bank and the Bangladesh Financial Intelligence Unit (BFIU)-the primary institutions responsible for transparency in the financial sector-facilitated money laundering rather than curbing it.
He estimates that between US$12 and $15 billion was smuggled out of Bangladesh annually.
"While the banking sector plays a significant role in this outflow, other methods include trade-based money laundering, invoice fraud, trafficking of foreign nationals working in Bangladesh, visa and immigration scams, exploitation of Mobile Financial Services (MFS), and informal transfers via hundi."
To substantiate his contentions he cites Global Financial Integrity's reports which estimates around $9 billion annually is lost to trade misinvoicing, with an additional $3 billion smuggled by foreign nationals, $2.2 billion in visa and immigration-related trafficking, and $7.5 billion laundered through MFS and other channels.
According to Mr Iftekharuzzaman, Bangladesh's financial sector has been severely weakened by a culture of default, corruption, and institutional breakdown.
He feels that structural reform-rather than a mere personnel change-is essential, coupled with public mobilization against corruption.
The anti-graft campaigner notes that reclaiming smuggled funds is a difficult task, requiring not only cooperation among local agencies such as the BFIU, CID, and the National Board of Revenue but also international support and mutual legal-assistance agreements.
Recovering even $100 million within the next two years, he says, would be a significant achievement under current circumstances.
Emeritus Professor Anisuzzaman Chowdhury from Western Sydney University, who delivered the keynote address, highlighted an urgent need for repatriating the laundered money and prosecuting financial criminals.
He criticized the International Monetary Fund (IMF) and other international lenders for financing illegitimate regimes, calling for an independent United Nations-supervised investigation by UNCTAD into the loans granted to past administrations.
Professor Jasim Uddin Ahmed, former Vice-chancellor of Jahangirnagar University, emphasized that failure to recover smuggled assets could pose severe economic challenges.
Economist Naeem Chowdhury further stressed that reclaiming laundered wealth is crucial to attracting foreign investment, which is hindered by Bangladesh's reputation for unchecked money laundering.
ERF President Refayet Ullah Mirdha, in his opening remarks, called for new, stringent money-laundering laws that would allow for the seizure of laundered assets within Bangladesh.
The event was moderated by Greenwatch Dhaka Editor Mustafa Kamal Majumder while ERF general secretary Abul Kashem delivered vote of thanks on the occasion.
The seminar concluded with a consensus on the necessity of robust legal frameworks to combat money laundering and reclaim smuggled wealth, as well as a call for greater accountability within financial institutions.
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