Published in Dhaka Tribune on Tuesday, 6 January 2015.
Suspicious transactions on rise
Jebun Nesa Alo
Total number of Suspicious Transaction Reporting (STR) submitted by the reporting agencies rose by 47.38% to 619 in the fiscal year 2013-14 compared to 420 in the previous fiscal year
The number of suspicious money transactions increased substantially in the last three fiscal years in a row despite having Anti Money Laundering (AML) laws.
Total number of Suspicious Transaction Reporting (STR) submitted by the reporting agencies rose by 47.38% to 619 in the fiscal year 2013-14 compared to 420 in the previous fiscal year.
The number of such reporting increased by 140% in the fiscal year 2012-13 compared to 175 cases in the fiscal year 2011-12, according to the annual report of Bangladesh Financial Intelligence Unit (BFIR), 2014.
Bangladesh Bank Governor Atiur Rahman unveiled the report yesterday at a function held in its headquarters.
Reporting organisations are obliged to submit STRs to BFIU under the provision of Money Laundering Prevention Act, 2012.
Banks are the prime reporting organisations of STR, other reporting organisations, like insurance companies, financial institutions, capital market intermediaries and NGOs also submit STRs.
BFIU received a total of 71 cases of money laundering offences occurred during the fiscal year 2013-14, of which five related to over invoicing, 15 corruption, 11 fraud, 3 financing in terrorism and 9 related to kidnapping.
After analysing the STRs, if it is assumed that there is any element of money laundering related offence and it is necessary to further investigation, BFIR provides information of those cases usually to ACC or CID of Bangladesh police, said the report.
Rigid foreign exchange policy influence people to carry out money through trade misinvoicing, said a senior executive of Bangladesh Bank.
The existing policy does not permit the non-resident Bangladeshis to transfer their proceeds abroad. There is also little chance to outward money for treatment purpose.
There is also very limitations on spending foreign exchange for traveling abroad, he said.
Bangladesh Bank liberalised some rules to carry money out of the country to remove money-laundering tendency.
Non-resident Bangladeshis has been allowed to transfer fund from their accounts in Bangladesh upon the central bank approval. But, in this case, subsistence costs of individual account holders and their family members in their country of residence must be specified.
Bangladesh Bank has recently relaxed its rules doubling business travel quota in foreign exchange for exporters, manufactures and importers.
Under the new provisions, Bangladeshi nationals and foreign nationals working in any business organisations in Bangladesh will be able to spend US$10,000 instead of existing $5000 per year for traveling to the foreign countries.
“We have relaxed some foreign exchange rules gradually in line with our dollar capacity,” said Bangladesh Bank Executive Director Mahfuzur Rahman.
He noted that foreign exchange policy still has some rigidity on spending dollars as its flexibility depends on the country’s dollar reserve.
The total of $1.78bn flown out of Bangladesh in the year 2012 mainly on trade misinvoicing, according to the recently released study conducted by the Global Financial Integrity (GFI), a Washington-based research organisation.
The amount of $593m was laundered in the year 2011. On an average, $1.31bn funneled out of the country per year between 2003 and 2012, according to the report.
Centre for Policy Dialogue (CPD) also claimed recently that over-invoicing in import of a large number of goods increased rampantly. It also demanded to examine that whether flight of capital is taking place through this over invoicing.