Dhaka, Saturday October 9 2010

http://www.thefinancialexpress-bd.com/more.php?news_id=114105&date=2010-10-09

Money laundering is quite an old phenomenon which is commonly known as “hundi” in Bangladesh. The United Nations Convention of 1988 on Illicit Traffic in Narcotic Drugs and Psychotropic Substances termed money laundering as a process of conversion of illicit cash to a less suspicious form, so that the true source of ownership is concealed and a legitimate source is created. Money laundering refers to illegal transfer of fund from one country to another, where not only the non-banking system, but also the recognised banking institutions in some cases may be involved in the process.

Money laundering came into world’s sharp focus when the government of the United States of America declared money laundering as a criminal offence and took some anti-money laundering measures after the terrorist attack on September 11, 2001. The worldwide survey conducted by the inter-government Financial Action Task Force (FATF) on money laundering noted that money laundering was supporting international terrorism, drug trafficking, human trafficking and other serious crimes. In Bangladesh, Bangladeshi workers who work abroad and send their money home through unofficial channels also fall under the ambit of the national anti- money laundering law.

The Anti-Money Laundering Act (AMLA) came into force in Bangladesh on April 5, 2002 as a sequel to worldwide developments and pressures for each national government to introduce and enforce such laws with the aim of preventing money laundering and also ensuring that the offenders under it do not keep and enjoy the benefit of their crimes. Thus, Bangladesh was well ahead of even some other regional countries such as India and Myanmar in complying with the international requirement to introduce such a law. It has been some eight years after the introduction of the AMLA in Bangladesh. However, this country’s head start in introducing the legislation has not meant effective enforcement of it. Some late starters like India are seen to be enforcing their own versions of anti-money laundering acts with greater effectiveness and yields.

It is the careful observation of experts in the field that Bangladesh needs to develop its capacities substantially for anti-money laundering activities in support of the related Act. This paper reported on Tuesday that the Anti-Money Laundering Department (AMLD) of the Bangladesh Bank has decided to bring six more agencies under the AMLA to report on money laundering activities. These are: stock dealers and stock brokers, portfolio managers and merchant bankers, securities custodians, asset managers, non-profit organizations and non-government organizations. The move is aimed to lift the AMLA to international standards. But truly attaining the goal seems to be vitally dependent on AMLD playing a far stronger and assertive role than it so far has done in support of the objectives of the AMLA.

For example, the commercial banks of the country are still not trained well enough to enforce the AMLA. Of course, no one should want that the commercial banks should intrude too much in the privacy of the customers or engage in actions that may appear as harassments to innocent customers while trying to enforce the AMLA. This can be counterproductive for the banking business as a whole. But surely expertise can be built in these banks to very selectively screen out the likely few number of suspects while keeping the greatest number of the banks’ customers happy and not feeling harassed. The AMLD should seek to train up the banks’ management to appropriately play this delicate and dual role. The same kind of capacity-building against money laundering should be achieved in the stock markets and among various market players under the active guidance, supervision and assistance of the AMLD. The AMLD should also strengthen its own abilities through recruitment of specialist staff, increasing international contacts and enhancing the overall efficiency of its members.