$12-15b laundered annually in last 15 years while cenbank turned blind eye: Iftekharuzzaman

The country lost $12-15 billion annually due to money laundering in the last 15 years while Bangladesh Bank remained complicit by overlooking such activities, said Dr Iftekharuzzaman, executive director of Transparency International Bangladesh (TIB), today (2 November).

The Bangladesh Financial Intelligence Unit (BFIU), which has been created to maintain transparency in the financial sector, was also used to facilitate money laundering activities, said Iftekharuzzaman, who also heads the Anti-Corruption Reform Commission formed by the interim government last month.

"It is possible to recover the money laundered from Bangladesh, but it will be extremely difficult. It can be said that it is almost impossible," he said while addressing a seminar, titled "Odious Debt and Recovery of Bangladesh's Laundered Wealth", in Dhaka.

The seminar was organised by the Economic Reporters' Forum (ERF) and Sombabonar Bangladesh at the auditorium of the ERF office in the capital's Paltan.

Iftekharuzzaman said, "There is no denying that Bangladesh Bank is primarily responsible for pushing the banking sector to the brink. The culture that has developed in these institutions cannot be changed overnight. There is no alternative but to fundamentally reform and overhaul these institutions."

"It's impossible to give an exact figure for how much money has been laundered out of Bangladesh," he added.

Regarding central bank Governor Ahsan H Mansur's recent remarks that tycoons connected to the ousted Sheikh Hasina government syphoned off nearly $17 billion in the last 15 years, the TIB chief said the amount Mansur mentioned could be based on the data of money laundered through the banking sector.

But beyond this, money gets laundered through challan fraud, foreign nationals working in Bangladesh, visa and immigration purposes, mobile financial services (MFS) and other similar channels, and through hundi, he said. "Overall, around $12 to $15 billion have been laundered from Bangladesh every year."

To recover the laundered money, the BFIU, the National Board of Revenue, the Criminal Investigation Department, the Anti-Corruption Commission, and the Attorney General's Office should work together, suggested Iftekharuzzaman.

"The sincerity of the countries where the money has been laundered is also needed. Mutual legal assistance treaties are necessary. If we can recover even $100 million or a penny in the next two years, it would be a surprise," he said.

Emphasising the urgent need to hold financial criminals accountable, he said, "Money launderers must face consequences, and anti-money laundering agencies should be made answerable to prevent future incidents."

Iftekharuzzaman noted that while the government has initiated efforts to curb financial crime, stronger advocacy from civil society and political platforms was necessary to develop a sustainable anti-smuggling system.

He also acknowledged that the central bank has now ramped up its efforts to tackle money laundering and recover laundered funds. "This should be turned into a sustainable system for the future."

Iftekharuzzaman also pointed to conditional requirements imposed by the International Monetary Fund (IMF) aimed at curbing loans to fictitious companies but criticised the lack of action.

"Despite IMF conditions to halt loans to fake and paper-based companies, the practice persists," he said. 

He added that Islami and other banks had allegedly lost funds to paper-based companies in fraudulent schemes – a practice, he noted, which Bangladesh Bank has since acknowledged. Meanwhile, many legitimate companies fulfilling all requirements struggle to obtain loans.

The seminar's keynote paper was presented by Anisuzzaman Chowdhury, Emeritus Professor at Western Sydney University, Australia. 

Other speakers included Professor Jasim Uddin Ahmed, former Vice-Chancellor, and Nayem Chowdhury, economist and founder of Astra Gattaca Oppenheimer in the USA.