Surge in secret outflow of funds worries regulator

Bangladesh Bank is set to gear up its activities to curb the illicit outflow of funds through establishing a separate wing, as the financial offence called 'capital flight' accelerates.
The new combat wing of the BB will be created under the Money Laundering Prevention Rules-2013 provisions.
As part of the moves, the Bangladesh Financial Intelligence Unit (BFIU) of the central bank is going to identify the high-risk areas of trade-based money laundering and terror financing by following risk-based assessment procedures.
The latest BB moves came against the backdrop of rising trend in illicit money outflows from Bangladesh, as reported by the Global Financial Integrity (GFI).
The latest findings by the Washington-based GFI that was formed in 2006 to analyse unrecorded money disappearing out of developing countries show that 'illicit financial outflows from Bangladesh averaged, on an annual basis, $1.3 billion between 2003 and 2012.
"We've to plug the loopholes to check the siphoning off money from the country to achieve an optimum economic growth," BB Governor Atiur Rahman said.
He was unveiling the BIFU annual report 2014 at the central bank headquarters in Dhaka Monday.
He also said: "We've to find out the ways of siphoning off money from the country and should take measures to stop outflow of illicit money also for maintaining peace and harmony in Bangladesh."
The central bank as a regulatory body will establish a separate wing for strengthening its anti-money laundering (AML) supervision and combating the financing of terrorism (CFT) shortly.
This was disclosed by Deputy Governor of the BB Abu Hena Mohammad Razee Hassan while speaking at the BIFU report- launching ceremony.
The BIFU has already signed memorandums of understanding (MoU) with 25 countries, including the United Kingdom, Japan, Sri Lanka, India, the Kingdom of Saudi Arabia (KSA), Malaysia and the Philippines, for exchange of information on the money-laundering matters.
 "We're now working to sign such deal with other Middle-East countries to share information on money-laundering issue," said Mr. Razee Hassan, also head of the BFIU.
Bangladesh as a member of the Egmont Group, a forum of the FIUs of different countries, is now empowered to exchange information on money laundering and terror financing among its member-countries.
The Group has now 147 members across the world to promote and enhance international cooperation in anti-money laundering and counter-terrorist financing and to foster the implementation of domestic programess in this field.
Meanwhile, submission of suspicious transaction report (STR) has increased significantly in the fiscal year (FY) 2013-14 compared to the previous fiscal.
The submission of STR shot up 47.38 per cent to 619 in the FY 15 from 420 in the FY 13, according to the BIFU annual report.
On the other hand, the submission of cash transaction report (CTR) increased more than 12 per cent to 3201,929 in the FY 14 from 28 45 479 in the previous fiscal.
Currently, the commercial banks are submitting their both STR and CTR to the central bank through using the digital connectivity.
Under the existing provision, the banks will have to submit CTR on both withdrawal and deposit within the third week of the next month.  
The commercial banks have to report if an amount of Tk 1.0 million, or above, is deposited or withdrawn in cash from a particular account in a single working day.
Bangladesh has agreed to undergo the 3rd-round Mutual Evaluation in 2015 under the revised Financial Action Task Force (FATF) standards and 2013 assessment methodology, the BIFU report said.
The FATF is an inter-governmental body whose purpose is the development and promotion of policies--both national and international--to combat money laundering and financing of terrorism.
It also said the onsite visit for Bangladesh Mutual Evaluation will take place during October 2015 and the Mutual Evaluation Report will be placed to adopt the APG (Asia-Pacific Group on Money Laundering) annual meeting in 2016.
General Manager of the BFIU Nasiruzzaman also spoke on the occasion.
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