Money Laundered Abroad: ACC ill-equipped to probe cases

Money laundering cases are not making much headway for a lack of cooperation from foreign countries, bureaucratic complexities and a shortage of skilled lawyers, said officials of the Anti-Corruption Commission.

For example, since 2018 the ACC has made 34 requests for information on the wealth of 24 persons stashed abroad. To date, it has received no effective response to prosecute the offenders.

"The developed countries talk the talk but are reluctant in providing information on laundered money. They make unnecessary queries to delay the process," said Mahmudul Hossain Khan, ACC's director general for money laundering.

In its requests, the ACC asked the countries to give information on moveable and non-moveable assets worth about $62.6 million, CAD 12.75 million, AUD 12.39 million, SGD 113.722 million, HKD 16 million, JPY 2.62 million, MYR 3.9 million, £59,341, THB 18,000 and Tk 16.8 million.

About Tk 5 lakh crore was laundered to different countries in five years from 2015, according to the Global Financial Integrity's report published in 2021, he said.

Canada, the US, the UK, Singapore, Australia, Malaysia and Thailand are identified as a haven for Bangladeshi money launderers.

Five organisations -– National Board of Revenue, Criminal Investigation Department of Police, Department of Narcotics, Bangladesh Securities and Exchange Commission (BSEC), Department of Environment and ACC -- are tasked to deal with money laundering.

Of these, only the ACC has a separate investigation unit and prosecution team for money laundering cases.

But its jurisdiction is limited: it can only investigate the laundering case related to corruption and bribery, said an ACC official referring to the Money Laundering Prevention Act, 2012.

There is a working committee on the prevention of money laundering to supervise the activities of organisations.

About 80 percent of the laundering takes place through over-invoicing and under-invoicing and the NBR and CID are responsible for monitoring that, said one of the members of the working committee on the condition of anonymity to speak candidly on the issue.

But they rely on public prosecutors who remain burdened with other cases and lack the required skills to deal with money laundering cases.

"ACC is left crippled while others are not given proper support to fight money laundering -- it shows a lack of willingness of a section in the government," he added.

Bangladesh lost approximately $8.27 billion on average annually between 2009 and 2018 from mis-invoicing import-export goods to evade taxes and to illegally move money across international borders, according to the report.

In September last year, the CID estimated that Bangladesh may have lost about $7.8 billion (around Tk 75,000 crore) in remittance between 2021-22 through mobile financial services.

Let alone repatriating the wealth, the investigation authorities face several obstacles to just find out about the money is laundered abroad, the official said.

Initially, the ACC requests the Bangladesh Financial Intelligence Unit (BFIU) to confirm the information on wealth laundered abroad. The BFIU collects it from its counterparts abroad.

"But there is an embargo on using this information in public. Therefore, we cannot use it before the court," Khan said.

In such instances, as per the United Nations Convention against Corruption, the ACC files Mutual Legal Assistance Requests (MLAR) to the respective countries for information.

"The ACC cannot file the MLAR directly to the authority concerned either," Khan said, while pointing out 12 steps to obtain information.

The first step entails writing to the home ministry, which forwards the letter to the foreign ministry. If the foreign ministry finds the request implementable, it sends it to the respective authority of the foreign country through embassies.

The respective country's authority sends a reply via its foreign ministry.

Bangladesh's foreign ministry gets the information from the embassy and channels it to the home ministry. Investigators get a reply only when Bangladesh's home ministry sends it to the ACC or other investigation agencies.

"It's a lengthy process. It becomes lengthier when the responding authority seeks supportive information," said an investigation officer.

The ACC had filed an MLAR to Japan about laundered money in January 2020.

"In response, the country's authority asked us to refile requests in the Japanese language," he said, adding that the ACC requested both Dhaka University's Institute of Modern Languages and the local Japan International Cooperation Agency office for translation.

But the ACC's request was refused.

"Another reply came from Cyprus partly in the Greek language," he said, adding that out of the 34 requests so far they got just two responses and even then the responses did not inform much.

The main drawback of MLAR is that a country is at liberty to accept or refuse Bangladesh's request, according to ACC officials.

"Not only foreign offices, local offices often do not give importance to our requests. It seems to us they assume regular follow-up as an extra burden," said an investigation officer.

To quicken the process, the anti-graft watchdog in September 2021 wrote to the cabinet division to take measures for Mutual Legal Assistance Treaty (MLAT) with the countries where huge amounts of money are laundered, Khan said.

The home ministry is now finalising the draft treaty. At present, Bangladesh has MLAT with only two countries: India and South Africa.