Financial instts asked to submit guidelines on money laundering

The Financial Institutions Division of the Finance Ministry has directed the financial institutions to submit their own guidelines on prevention of money laundering by August 31 and get vetting from Bangladesh Financial Intelligence Unit (BFIU).

Most of the money is laundered out of the country through foreign trade. In order to check money laundering, Bangladesh Bank's BFIU has asked financial institutions to draft their own guidelines following BFIU’s directives titled 'Guide Line for Prevention of Trade Based Money Laundering'.

Reliable sources said that a letter has been sent to the financial institutions concerned in this regard.

According to the letter, a decision was taken at a meeting, chaired by the senior secretary of the Financial Institutions Division on March 18, to find a way to recover the money smuggled out of Bangladesh. In line with the decision, BFIU held a meeting with state-owned banks on August 9 to implement a manual titled 'Guide Line for Prevention of Trade Based Money Laundering'. The minutes of that meeting have already been distributed among the institutions concerned.

The letter said that as per the decision taken in the meeting, all state-owned banks will send their own guidelines to the BFIU for vetting by August 31 with the approval of the highest policymaking body namely the Board of Directors of financial institutions including banks.

It was decided in the meeting that all state-owned banks should deploy adequate manpower in the Money Laundering and Counter Terrorism Financing Division considering their branches, manpower, number of customers, scopes of business. If necessary, steps should be taken to ensure adequacy of manpower by recruiting from existing manpower before hiring new ones.

In addition, the Department of International Trade and the authorized dealer branches have been asked to ensure skilled manpower and adequate training.

The Finance Ministry has directed the public sector banks to take all possible steps to stop money laundering from the country through banking channels. The bulk money laundering has been taking place through foreign trade or import-export.

Money is being smuggled by showing low export value or not bringing export value from abroad to the country and also by showing higher import prices. The creation of a central database on price monitoring of goods to curb money laundering through foreign trade was asked to be examined. At the same time, banks have been instructed to set up a database on their own initiative.

The directive was given at a recent meeting between the top executives of the finance ministry, Bangladesh Bank and state-owned banks. Asadul Islam, Senior Secretary of the Financial Institutions Division of the Ministry of Finance, Bangladesh Bank Financial Intelligence Unit (BFIU) chief Abu Hena. Razi Hasan and Managing Directors (MDs) of government banks participated in the meeting.

It has been informed in the meeting that various studies have shown that trade-based money laundering is the most common type of foreign trade from Bangladesh. Money laundering is on the rise, especially in the case of industrial equipment imports. Apart from this, in the case of other imports, money is being siphoned off by showing higher commodity prices and showing lower export prices or not bringing them to the country. A policy has been issued to curb money laundering from BFIU. Banks need to fully comply with this. If its implementation is ensured, it will be possible to prevent trade-based money laundering.

In this regard, Asadul Islam, Senior Secretary Financial Institutions Division, said that various studies have identified trade-based money laundering as a major source of money laundering from Bangladesh inflicting lots of damages to the economy. Banks need to gain sincerity and efficiency in implementing policies to stop money laundering from Bangladesh to aboard.

BFIU chief Razi Hasan said the report, 'Money Laundering and Terrorism Financing Risk Assessment in Bangladesh', a joint venture of BFIU, ACC and CID, identified money laundering through international trade as risky areas.

Banks are being instructed to deal with these risks. If these instructions are implemented and strictly monitored, money laundering will be reduced.

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