The world witnesses that, Bangladesh is currently facing serious liquidity deficit caused by the gross corruption, mismanagement, misappropriation and malpractices in both public and private sectors including the leaders, rulers and policymakers during the last 15 years of the recently ousted regime, which compelled Bangladesh to carry on at least TK 18 laks crores of debt besides encountering huge funds and assets are smuggled.
The Global Financial Integrity (GFI), a Washington-based financial sector research organization, reported that an average of USD 7.53 billion 37 million or Tk 80,000 crores while according to the report of the Daily Star (September 18, 2024) USD 10 billion have been plundered abroad from Bangladesh every year as evidently observed during the last 15 years (2009-2024). The amount smuggled are more than the double of the current national budget of the country.
In reference to the Daily Prothom Alo report (28 August, 2024), during the last 15 years of the recently ousted regime (2009-2024), Bangladesh has lost at least Tk 11 laks crores while according to the Daily Industry report (September 17, 2024) Tk 14 laks crores have been smuggled out, and according to the report of the Bonik Barta (September 18, 2024) and also the Daily Star (September 18, 2024) Tk 17.6 laks crores or about USD 150 billion have been plundered (smuggled) from Bangladesh by politicians, businessmen, individuals, families, companies, institutions, organizations, bureaucrats, police officials, high-ups of banks, NBFIs, insurance companies, mega projects etc and kept them both inside and outside the country in the form of currencies and or assets.
Most of the plundered money have been stored among others in offshore accounts in Switzerland, the US, the UK, Canada, the UAE, East European countries, ASEAN like Singapore, Malaysia, and Thailand. Some of the funds were also invested in properties in Malaysia, India, the UAE, Canada, the UK and the USA. The current interim government is seriously planning to recover those of plundered money to help the country’s economic stability.
Does Bangladesh have regulatory supports or backings in recovering its plundered money or assets? Yes…. Bangladesh has adequate back-up in claiming and recovering back its plundered money and assets through the existing regulatory frameworks, procedures and smart strategies. In recovering the plundered money and asset, Bangladesh in its action plan, requires initiating in establishing a recovery commission comprising of a smart team followed by strategic actions with financial intelligence for detection, legal process for achievable outcome and compliance for accuracy.
There are numerous challenges awaiting in recovering the smuggled money or asset.
Among those challenges are- unseriousness from the right authorities, poor action plan, inaccuracy in intelligence action, unprofessional legal processing, fear and favoring, prioritizing diplomatic or political influences over accurate action plan and legal processing and leniency in auditing and compliance.
There are numerous experiences and cases of several countries where the plundered or smuggled money and or asset have been successfully recovered through the existing legal process. Among them are:
Recently on June 11, 2024, the US ambassador to Malaysia Edgard D Kagan met with Malaysian Prime Minister YAB Dato’ Seri Anwar bin Ibrahim to confirm the return of approximately USD 156 million (RM 721.4 million) to Malaysia, representing the fourth installment of plundered funds, originally more than USD 4.5 billion belonging to 1MDB were allegedly misappropriated by high-level officials of 1MDB and their associates, Low Taek Jho.
In relation to smuggled funds belonging to 1MDB, in 2016, a landmark effort encompassing 41 civil forfeiture actions filed in the US District Court for the Central District of California and one in the US District Court for the District of Columbia by the Money Laundering and Asset Recovery Section (MLARS) of the Justice Department’s Criminal Division led to the seizure of over USD 1.7 billion in smuggled assets.
This is the largest recovery to date under the Department’s Kleptocracy Asset Recovery Initiative. The funds include both funds the Department assisted in recovering and returning and funds finally forfeited. The Department continues to litigate actions against additional assets allegedly linked to this scheme.
The ousted president Ferdinand Marcos and his associates made off with USD 5 to 10 billion in stolen assets in 1986. The Swiss government set a precedent by taking spontaneous action to freeze their Swiss bank accounts and subsequently assist the Philippine government in tracing and recuperating the plundered funds successfully.
In 2016, one of the largest cyber heists in history, hackers smuggled USD 81 million from the Bangladesh bank (BB) and funneled the money through the Philippines' banking system through a black hate scamming. Maia Santos Deguito, a bank manager in the Philippine, was convicted for her role in facilitating the smuggling of these funds. In High Court Division of Bangladesh, Justice Nima Haider and Justice Abu Taher Md Saifur Rahman ruled out in 2016 in a Writ Petition (No 5673) outlining the possible legal process in recovering the smuggled money.
In 2021, Swiss authorities have frozen more than USD 310 million funds smuggled across multiple Swiss bank accounts as part of an investigation into allegations of money laundering and securities forgery linked to the Adani Group lodged in the Swiss criminal court.
The Directorate of Revenue Intelligence (DRI) is in-charge of identifying and recovering smuggled money or asset from or in India. Among other experiences of India in recovering its plundered assets through its legal process is: Bishanath Vottachriya v Union of India (AIR 2014, SC 1003).
In May 18, 2022, (In reference to United States v Sergey Ovsyannikov, et al Justice Eric R Komitee), the US Attorney for the Eastern District of New York, announced that USD 15,111,453.84 in illicit proceeds derived from an international digital fraud scheme has been transferred by Switzerland to the United States government pursuant to a Final Order of Forfeiture entered by United States District Judge Eric R Komitee.
In BOTA Foundation v Government of Republic of Kazakhstan (1999) The Court had ruled out for the recovery of a plundered fund involving the Swiss Bank allegedly amounting USD 84 million.
The Pakistan Supreme Court also decided in Dr Mubashir Hossain and others v Federation of Pakistan (PLD 2010, SC 265) for the recovery of smuggled funds and or assets.
In MANTARA Project (Nigeria) 2017 involving the Swiss Bank allegedly plundered amounting USD 321 million, the court ruled out a verdict for recovering the money or asset smuggled.
As understood that, the money or assets have been plundered from Bangladesh during the last 15 years is more than doble the amount allocated for the national budget, which compelled the country to face high risk in its economic backbone while positioning the country with an uncertain economic catastrophe.
It may be admitted that, the remittance from our real fighters significantly contribute to the sustainability Bangladesh during this catastrophic era. Yet, if the plundered funds or assets (from both the interannually and locally stored unlawfully) can be smartly recovered, may bring a great socio-economic and political impact in the country with long-term effect.
Among the impact are: The country’s economic status may significantly be upgraded, the national debt may with gradual effect be diminished, creating a vibration in the national economy while contributing notably to the GDP to place the country with economic bright future. Corruption, misappropriation and mismanagement may tremendously be reduced. And also a great lesson with a dynamic public awareness for all levels either individual, family, private or public sectors to prevent themselves from such malpractices while creating a mind-set for all to build up a country free from corruption and leading it to be with an economic sustainability.
Among the law and policies may effectively support in claiming and recovering the plundered money or asset are:
The United Nations Convention Anti-corruption (UNCAC), which was adopted by the UN General Assembly in October 2003 and came into force in December 2005.
The Convention establishes the return of smuggled money or assets as its “fundamental principle”. The provisions of Chapter V of the UNCAC (Articles: 31 (3), 51, 53 and 54) provide rules on asset recovery set forth a framework, in both civil and criminal law, for tracing, freezing, confiscating, and returning funds or assets obtained through corrupt acts to be known as plundered funds or assets.
Among the regulatory frameworks may effectively be applied in Bangladesh in an effort of recovering its plundered money or assets are: Anti-corruption Commission Act (2004), Anti- corruption Commission Act (Amendment) 2013, Prevention of Corruption Act (1974), Foreign Exchange Regulations Act (1974), Money Laundering Prevention Act (2012), Money Laundering Prevention Rules (2013), Anti-terrorism Act (2009), Anti-terrorism Rules (2013).
Among the cases, judicial presidents may be applied as a reference in recovering the plundered money or assets are- In BD HC Division: Justice Nima Haider and Justice Abu Taher Md Saifur Rahman ruled out in 2016 in a Writ Petition (No 5673).
In 2016, one of the largest cyber heists in history, hackers smuggled USD 81 million from the Bangladesh bank (BB) and funneled the money through the Philippines' banking system. Maia Santos Deguito, a bank manager in the Philippine, was convicted for her role in facilitating the smuggling of these funds.
In Malaysia, involving 1MDB allegedly amounting to USD 4.5 billion (2009-2015), the US District Court for the Central District of California and others (2016) had decided for the effective recovery of the plundered funds by installment. In this effect the 4th instalment amounting USD 156 million has recently on June 11, 2024 been recovered.
In BOTA Foundation v Government of Republic of Kazakhstan (1999) involving the Swiss Bank allegedly amounting to USD 84 million. In MANTARA Project (Nigeria) 2017 involving the Swiss Bank allegedly amounting to USD 321 million. In 1986, the ousted President Ferdinand Marcos and his associates made off smuggled with USD 5 to 10 billion.
The Swiss government had assisted the Philippine government in tracing and recuperating the plundered funds successfully. In Pakistan, the Supreme Court had ruled out in 2010 in Dr Mubashir Hossain and others v Federation of Pakistan (PLD 2010, SC 265) for possibility of recovering the plundered funds or assets. In India, the Supreme Court had decided in 2014 in Bishanath Vottachariya v Union of India (AIR 2014, SC 1003) in favour of recovering the plundered funds or assets. In the USA in reference to United States v. Sergey Ovsyannikov, et al. Justice Eric R. Komitee), the US Attorney for the Eastern District of New York, announced that USD 15,111,453.84 in illicit proceeds must be returned.
In view of recovering the plundered money or assets, the Bangladesh authority may need to initiate its effective effort by adopting the following smart steps: The Ministry of finance (MoF) may lead the mission, The MoF establishes a Recovery Commission (RC), The RC shall prepare a smart strategic Action Plan and submit it to the RC, The RC establishes two financial intelligence teams (FIT). One of them is local (LFIT) while the other is an international to be fully independent (IFIT). The FIT shall be led by the IFIT while the LFIT shall facilitate as per required by the IFIT aligning with the standard policy.
Among the FIT’s tasks are: Action Plan along with a Schedule to be submitted to the RC, Detecting the actual channel or source the fund is smuggled, Detecting the Culprit who smuggled the fund, Detecting the spot or storage or account the smuggled fund is kept, Determining the exact amount smuggled and or kept in account, Comprehensions Findings and Reporting to the RC, Upon receiving the Findings and Report from the FIT, the RC establishes two legal teams (LT). One of them is local (LLT) while the other is an international to be fully independent (ILT).
The LT shall be led by the ILT while the LLT shall facilitate as per required by the ILT aligning with the standard policy. Among the LT’s tasks are- Action Plan along with a Schedule to be submitted to the RC, Compilation of relevant laws, policies and guidelines, Identifying the Court at both levels, local and regional / international, Initiating the application of claim or legal processing, applying for a “Freezing Order” to the relevant court to be known as “Interim or Interlocutory Injunction”, Upon obtaining the Freezing Order, the LT shall proceed with an application of “Writ of Summon” against the Culprit and the entity or account keeps the smuggled funds or assets, Upon obtaining the order on the Writ of Summon, the LT shall proceed with the application to the relevant Court for a Summary judgement, The trial shall be continued, the LT shall wait for obtaining the final judgement, with the final judgement, the LT shall determine the Bangladesh Government (beneficiary)’s Account where the recovered money or asset to be returned back, based on the judgement obtained, the LT shall make a formal claim the figure from the entity or account the smuggled money or asset is held, the claimed figure shall be returned into the beneficiary’s account as per instruction, the LT shall submit a final report to the RC.
The RC establishes two Audit or Compliance teams (AT). One of them is local (LAT) while the other is an international to be fully independent (IAT). The LT shall be led by the IAT while the LAT shall facilitate as per required by the IAT aligning with the standard policy.
Among the AT’s tasks are: Ensuring the compliance of the activities of the FIT, examining and ensuring the total functions and processing of the LT to be accurately compliance to the standard law and policies, ensuring the exact figure or amount smuggled claimed and returned, a Comprehensive to be prepared and duly submitted to the RC.
The RC shall prepare a comprehensive report and duly submit it to the MoF. Law and Policies in International Level- UNCAC (Ch V), Articles: 31 (3), 51, 53 and 54, in Bangladesh Anti-corruption Commission Act (2004), Anti-corruption Commission Act (Amendment) 2013, Prevention of Corruption Act (1974), Foreign Exchange Regulations Act (1974), Money Laundering Prevention Act (2012), Money Laundering Prevention Rules (2013), Anti-terrorism Act (2009), Anti- terrorism Rules (2013).
Cases or Judicial Decisions are involved with 1MDB (Malaysia) US California District Court (2009- 2015) / USD 4.5 Billion (2016), BOTA Foundation v Government of Republic of Kazakhstan (1999) (Swiss Bank $ 84 mil), MANTARA Project (Nigeria) 2017 (Swiss Bank $321 Mil), Dr Mubashir Hossain and others v Federation of Pakistan (PLD 2010, SC 265), Bishanath Vottachariya v Union of India (AIR 2014, SC 1003), In Bangladesh HC Division: Justice Nima Haider and Justice Abu Taher Md Saifur Rahman ruled out in a Writ Petition (No 5673) 2016.
Recovery Commission can play significant role with following steps- Financial Intelligence (Local/International/Independent) which involves- Detecting the Channel/Source, Detecting the Culprits, Detecting the Spot/Storage, Determination of Figures/Amount, Findings/Reporting. Legal Team (Local/Regional/International) which involves- Compilation to Laws/Policies, Court (Local/Regional/International), Application/Processing, Freezing Order Interim/Interlocutory Injunction, Writ of Summon, Application of Summary Judgement, Trial Process, Judgement, Claim and Credit into account.
Audit Team (Local and International) which involves- Compliance to Law and Policies, Accuracy of Facts and Figures, Monitoring the Process Accuracy, Findings and Reporting.
The total strategic mission of recovering the smuggled money or assets shall be completed by the RC with successful result by preparing a comprehensive report and duly submitting it to the MoF.
It is indeed concluded that, in reference to existing laws, policies, guidelines, standards and successful presidents with experiences from several countries, the Bangladesh authority has its strong foundation in claiming and duly recovering its plundered money or assets, so to boost the country’s economic backbone and positioning it to ambit its brighter economic future in this advanced technological era, enSha Allah (swt).
To achieve its goal, the relevant authority and the action team shall be serious and shall smartly move forward with every action wisely, carefully and accurately so the outcome will be glorious, enSha Allah (swt).
The writer is a Senior Professor of Finance and Investment King Abdu Aziz University Saudi Arabia and can be reached at [email protected]
