Financial fraudulence increasingly frequent during pandemic

The Financial Institutions Division (FID) under the Ministry of Finance believes that financial fraud including money laundering and related cyber-crimes have increased in the banking sector during the coronavirus pandemic due to the limitation of economic activities.

The FID has advised the working committee on money laundering and counter-terrorism financing to work out a plan of action to mitigate risks and reduce fraud in the latest anti-money laundering meeting.

The meeting also revealed that the Bangladesh Financial Intelligence Unit (BFIU) of Bangladesh Bank is playing an important role in this regard. The FID has also emphasized on the coordination between the Criminal Investigation Department (CID) of the police, Directorate of Customs Intelligence, Narcotics Control Department, Bangladesh Securities and Exchange Commission (BSEC).

A meeting has been convened on 15 October (Thursday) to be chaired by Md Ashadul Islam, Senior Secretary of Financial Institutions Division to review these issues and decide what to do to implement effective measures.

According to an FID report, the amount of money deposited by Bangladeshis in Swiss banks has recently increased which indicates that money is being smuggled out of the country.

From February to July, the country's financial activities were limited due to the coronavirus pandemic. During this time, for various reasons, there were some relaxations in the observation and monitoring by the regulatory bodies. As a result, money laundering, financial fraud, and cybercrimes have risen sharply. It is believed that a large amount of money has been siphoned off from the country during this time.

According to the minutes of the meeting, an action plan has been taken to recover the money smuggled out at different times including the money stolen from Bangladesh Bank reserve and those deposited in the Swiss banks. The FID has prepared a report compiling the data of the monitoring reports of various intelligence agencies, reviewing cases related to money laundering, existing legal and institutional frameworks, various complexities of information exchanging information and laws and regulations of different countries. The action plan and report will be presented at the virtual meeting to be held on Thursday.

Head of BFIU Abu Hena Mohammad Razi Hasan said, "We are actually trying to understand the situation and I'm looking for a way to get rid of old cases.”

He also said, "That is why we will have a joint discussion in the upcoming meeting.”

Transparency International Bangladesh (TIB) Executive Director Dr Iftekharuzzaman said to The Business Post that political will is needed first to prevent money laundering. At the same time, the issue of money laundering is inextricably linked with human trafficking, he said. He thinks that if this human trafficking can be prevented, money laundering will be greatly reduced.
Risk of money laundering has increased in Bangladesh, according to the information provided by the Basel Institute on Governance in Switzerland three months ago. At that time, the organization also advised Bangladesh to take immediate and effective steps to prevent human trafficking. The World Bank (WB) at the same time has also taken into account that the risk of money laundering has increased in Bangladesh due to Covid-19 pandemic.

Therefore, the global lender has advised taking effective measures to prevent human trafficking. At the same time, it has been asked to increase supervision in import-export trade as in every year a huge amount of money is smuggled from Bangladesh under the guise of import and export. As a result, the WB has also suggested popularising online secure transactions quickly. Use of cashless transactions has already started to increase in Bangladesh. People are getting accustomed to different types of cards, mobile banking and online transactions during the pandemic. The WB, a global financial institution, has taken this trend positively as provided in the recent evaluation report of the WB on money laundering.

Based on the information provided by the WB and the Basel Institute on Governance in Switzerland, the BFIU, the agencies concerned along with the Money Laundering Prevention Work Committee have conducted a study and prepared an observation report. In this context, an action plan has been formulated to reduce the risk of money laundering and terrorism.

Meanwhile, the WB says that the incidents of human trafficking from Bangladesh has increased to different countries of the world including the Middle East, Europe and the USA. Even a Bangladeshi lawmaker has been found to be involved with human trafficking. MP Papul is in Kuwait jail in connection with the incident and facing trial. The human traffickers also consider import-export as a safe medium for money laundering, according to the WB and the Basel Institute on Governance.

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