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FATF Statement re AML Strategic Deficiencies:
Date: 16 February 2012
In October 2010, Bangladesh made a high-level political
commitment to work with the FATF and APG to address its
strategic AML/CFT deficiencies. Since October 2011, Bangladesh
has taken steps towards improving its AML/CFT regime, including
by issuing the Money Laundering Prevention Ordinance, 2012; an
Ordinance to amend the Anti Terrorism Act (ATA), 2009; and the
Mutual Legal Assistance Ordinance Criminal Matters, 2012. In
addition, Bangladesh has reframed its Voluntary Tax Compliance
(VTC) Programme, by issuing a new Statutory Regulatory Order
(SRO), which rescinded the previous VTC programme to address
the FATF concerns expressed in the public statement in the
Chairman’s Summary following the October 2011 plenary meeting.
However, the FATF has determined that certain strategic
AML/CFT deficiencies remain. Bangladesh should continue to
work on implementing its action plan to address these
deficiencies, including by: (1) adequately criminalising money
laundering and terrorist financing (Recommendation 1 and
Special Recommendation II); (2) establishing and implementing
adequate procedures to identify and freeze terrorist assets
(Special Recommendation III); (3) implementing adequate
procedures for the confiscation of funds related to money
laundering (Recommendation 3); (4) ensuring a fully operational
and effectively functioning Financial Intelligence Unit
(Recommendation 26); (5) improving suspicious transaction
reporting requirements (Recommendation 13 and Special
Recommendation IV); (6) improving international co-operation
(Recommendation 36, Recommendation 39 and Special
Recommendation V); and (7) issuing guidance to capital markets
intermediaries to effectively extend the AML/CFT obligations,
including with regard to the VTC program (Recommendation 5).
The FATF encourages Bangladesh to address its remaining
deficiencies and continue the process of implementing its action
plan.
____________________________________________________
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2011:
Bangladesh is not a regional financial center. Pervasive
corruption, drug trafficking, and human trafficking are the principal
sources of criminal proceeds; securities fraud; embezzlement;
and extortion are also notable sources of illicit proceeds.
Bangladesh’s geographic location, including its seaports and long
porous borders with India and Burma, makes it a key
transshipment point for drugs produced in both the ‘golden
triangle’ and ‘golden crescent’ regions, with drugs ultimately
bound for markets in Europe, the United States and Canada.
Bangladesh has a relatively low terrorist financing profile.
However, Bangladesh-based terrorist organization Jamaat ul-
Mujahideen Bangladesh (JMB) has publicly claimed to receive
funding from Saudi Arabia.
The Bangladeshi economy is cash based, and relies heavily on
remittances from expatriate Bangladeshi workers. Money transfers
outside of the formal banking sector, the post office, and licensed
foreign exchange houses are illegal. Nevertheless, the majority of
remittances are done through the underground “hawala” or
“hundi” system. Informal systems are used to avoid taxes,
customs duties, and currency controls, and criminals and criminal
organizations exploit these systems as a low-risk avenue to
conceal the proceeds of crime and to send illicit funds abroad.
Bangladesh is not an offshore banking center and has no
international free trade zones. The Central Bank reports a
considerable increase in remittances sent through official
channels, reaching approximately $10.99 billion between January
and December 2010. The increase is due to competition from
commercial banks through improved delivery time, guarantees,
and value-added services, such as group life insurance. However,
hundi and black market money exchanges remain popular due to
the non-convertibility of the local currency and the intense
scrutiny on foreign currency transactions in formal financial
institutions.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate
crimes: List approach
Legal persons covered: criminally: YES civilly: NO
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: YES
(Please refer to the Department of State’s Country Reports on
Terrorism, which can be found here: http://www.state.
gov/s/ct/rls/crt/)
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Banks, financial institutions, insurance
companies, money changers and remitters; institutions conducting
business under approval of Bangladesh Bank; stock dealers and
brokers, portfolio managers, merchant banks, securities
custodians, asset managers; and non-profit and non-
governmental organizations
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: NO
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Banks, financial institutions, insurance
companies, money changers and remitters; institutions conducting
business under approval of Bangladesh Bank; stock dealers and
brokers, portfolio managers, merchant banks, securities
custodians, asset managers; and non-profit and non-
governmental organizations
Number of STRs received and time frame: 44 in 2010
Number of CTRs received and time frame: Not available
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: Five in 2010
Convictions: One in 2010
Assets forfeited: criminally: 2.32 crore Taka (approximately
$336,200) civilly: Not applicable
RECORDS EXCHANGE MECHANISM:
With U.S.: NO
With other governments/jurisdictions: YES
Bangladesh is a member of the Asia/Pacific Group on Money
Laundering (APG), a Financial Action Task Force (FATF)-style
regional body. Its most recent mutual evaluation can be found
here: http://www.apgml.org/documents/docs/17/Bangladesh%
20ME2%20-%20final120809.pdf
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
The Government of Bangladesh (GOB) has demonstrated a
strong policy level commitment to cooperate with international
partners and strengthen its AML/CFT regime, but effective
implementation remains a significant issue. In late 2010, the GOB
worked with the U.S. Department of Justice to draft stronger
AML/CFT legislation. Also in 2010, the GOB assisted a U.S.
federal court with an asset forfeiture case with ties to Bangladesh
and Singapore. The GOB should continue its work on the
amendments to the Money Laundering Prevention Act (MLPA)
and the Anti-Terrorism Act (ATA), including implementing
mechanisms, and should continue to improve investigation,
prosecution, supervision, and enforcement capacity.
The GOB acknowledges corruption is pervasive in Bangladesh,
and that it undermines effective implementation of AML/CFT
measures. Investigations are compromised by corruption in many
law enforcement organizations, including police and customs. The
GOB has made combating corruption a national priority and has
had success in investigating and prosecuting straightforward
corruption cases. However, the GOB does not yet have sufficient
training or experience to comprehensively pursue complex cases
involving both corruption and money laundering through foreign
jurisdictions or multi-layered investment schemes. The GOB
should continue its aggressive investigations into corruption and
enhance training of investigators so they better understand its
relationship to money laundering and related crimes.
The GOB should amend its legislation, as necessary, to prohibit
“tipping off” and to provide a safe harbor for financial institutions
and their employees who report suspicious activity to the GOB in
good faith. Additionally, Bangladesh should become a party to the
UN Convention against Transnational Organized Crime.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
Bangladesh was not a significant cultivator or producer of
narcotics in 2011. Government of Bangladesh (GOB) officials
charged with controlling and preventing illegal substance
trafficking lack sufficient training, and equipment to address the
growing precursor chemical trafficking situation and the influx of
“yaba” (methamphetamine pills) from Burma. Law enforcement
agencies nevertheless interdicted narcotics, from the Golden
Crescent in South Asia and the Golden Triangle in Southeast
Asia, smuggled into Bangladesh along its porous borders. GOB
law enforcement agencies also continue to assist DEA in
providing critical information related to (express parcel) shipments
containing ephedrine and pseudoephedrine that are sent to
Mexican based methamphetamine trafficking organizations. There
is no direct evidence that corruption in law enforcement agencies
is hampering the country’s drug interdiction efforts in targeting
significant precursor chemicals or yaba traffickers. Bangladesh is
a party to the 1988 UN Drug Convention, the 1961 UN Single
Convention as amended by the 1972 Protocol, the 1971 UN
Convention on Psychotropic Substances, and the UN Convention
against Corruption. On July 13, 2011, Bangladesh acceded to the
UN Convention against Transnational Organized Crime
Assessments conducted by several U.S. agencies in 2009 and
2010 confirmed numerous land, sea and air border security
vulnerabilities in Bangladesh that could be easily exploited by
narcotics traffickers. The Bangladesh Department of Narcotics
Control (DNC) said it was unable to estimate the number of drug
addicts in the country. The NGO community also does not have
reliable numbers, with estimates ranging wildly between 100,000
to 1.7 million addicts out of a population of 160 million. Among
classes of drug users where better estimates are possible, NGO
sources estimate 20,000-25,000 injecting drug users and 45,000
heroin smokers. Other drugs used in Bangladesh were
methamphetamines, marijuana, and the codeine-based cough
syrup phensidyl. Most of the yaba circulating in Bangladesh is
smuggled from neighboring countries such as Burma. The GOB
considers the smuggling, diversion and abuse of pharmaceuticals
originating from India one of the largest drug problems in
Bangladesh. Poor, uneducated, unemployed youth are the group
most under threat of drug abuse in Bangladesh. More than 20
percent of recent drug arrestees are under the age of 16. Street
children, who sometimes come from a drug abusing milieu with
close relatives abusing drugs, and who are lured into selling
drugs, are under especially great risk of debilitating drug abuse.
Among street children who inject drugs, high percentages (65
percent) share needles, and similarly high percentages engage in
either risky sexual behavior or are abused sexually themselves.
The resultant risk of HIV/AIDS transmission in this vulnerable
group is obvious.
The International Narcotics Control Board estimated that small
quantities of cannabis are cultivated in Bangladesh for local use.
The DNC acknowledged that cannabis is cultivated in the hill
tracts near Chittagong, in the southern silt islands, and in the
northeastern region. The DNC also reported DNC officers, in
coordination with other law enforcement officials, eradicated
cannabis crops as soon as crops were located. According to
Central American and United States law enforcement agencies,
Pseudoephedrine shipped from Bangladesh was diverted to
Central America for production of methamphetamine destined
primarily for the United States.
The most frequently abused drugs in Bangladesh are low quality
heroin, phensidyl (illegally smuggled from India) and cannabis.
Heroin was smuggled into Bangladesh by couriers from Pakistan,
by commercial vehicles or trains from India, by trucks or public
transport from Burma and by sea via the Bay of Bengal. The
Chittagong port appeared to be the main exit point for narcotics
leaving Bangladesh. One report from the U.S. Department of
Homeland Security described a chaotic situation at Benapole, the
main land border crossing between India and Bangladesh, which
could easily be exploited by narcotics traffickers. The report noted
examination of luggage items was cursory at best.
Bangladesh law enforcement officials believe that drug abuse,
while previously a problem among the ultra-poor, is becoming a
major problem among the wealthy and well-educated youth as
well. The DNC ran treatment centers in Dhaka, Chittagong,
Rajshahi, Khulna, Jessore and Comilla. A drug addicts’
rehabilitation organization, Ashokti Punorbashon Nibash (APON),
Bengali for the NGO, operates six long-term residential
rehabilitation centers, including the first centers in Bangladesh for
the rehabilitation of female addicts. APON says it is the only
organization that includes street children in its drug rehabilitation
program.
Drug trafficking to Bangladesh and diversion of medicine for
abuse have contributed to a growing addiction problem, especially
among the most vulnerable in society. Problems at Bangladesh’s
ports make drug trafficking more difficult to control. The GOB and
donors, including the USG, will need to focus on these problems
to bring about improvements.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2 Watch List)
Bangladesh is a source and transit country for men, women, and
children subjected to forced labor and sex trafficking. A significant
share of Bangladesh’s trafficking victims consists of men recruited
for work overseas with fraudulent employment offers who are
subsequently exploited under conditions of forced labor or debt
bondage. Bangladeshi children and adults also are trafficked
internally for commercial sexual exploitation, domestic servitude,
and forced and bonded labor. Some children are sold into
bondage by their parents, while others are induced into labor or
commercial sexual exploitation through fraud and physical
coercion. Internal trafficking often occurs from poorer, more rural
regions, to locations with more commercial activity including
Dhaka and Chittagong, the country’s two largest cities. Women
and children from Bangladesh are trafficked to India and Pakistan
for commercial sexual exploitation or forced labor. Many Rohingya
refugees from Burma transit through Bangladesh using unofficial
methods, leaving them vulnerable to traffickers inside Bangladesh
and in destination countries. In 2010, some Rohingya girls were
forced into prostitution.
Bangladeshi men and women migrate willingly to Saudi Arabia,
Bahrain, Kuwait, the United Arab Emirates (UAE), Qatar, the
Maldives, Iraq, Iran, Lebanon, Malaysia, Singapore, Libya,
Europe, and other countries for work, often under legal and
contractual terms. Most Bangladeshis who seek overseas
employment through legal channels rely on the over 1,000
recruiting agencies belonging to the Bangladesh Association of
International Recruiting Agencies (BAIRA). These agencies are
legally permitted to charge workers up to $1,235 and place
workers in low-skilled jobs typically paying between $100 and
$150 per month, but workers are sometimes charged $6,000 or
more for these services. Many Bangladeshi migrant laborers are
victims of recruitment fraud, including exorbitant recruitment fees
often accompanied by fraudulent representation of terms of
employment; high recruitment fees increase vulnerability to debt
bondage and forced labor among transnational migrant workers.
Women typically work as domestic servants; some find themselves
in situations of forced labor or debt bondage where they face
restrictions on their movements, nonpayment of wages, threats,
and physical or sexual abuse. Some Bangladeshi women working
abroad are subsequently forced into prostitution. Some
Bangladeshis have been convicted by foreign governments for
their human trafficking crimes abroad. There are reports of an
increased number of Bangladeshis transiting through Nepal to
obtain Nepalese visas and work permits for employment in the
Gulf, and many of them are likely trafficking victims. Many
Bangladeshi migrant workers – including trafficking victims – were
stranded in Libya in early 2011 due to the civil conflict in that
country. Trafficking victims among these migrant workers may be
particularly vulnerable to being trapped in Libya as a result of the
confiscation of their travel documents and unpaid wages. Some of
these migrants who have been able to return to Bangladesh are
under pressure to repay the high debts they incurred for
recruitment fees.
Bangladesh does not fully comply with the minimum standards for
the elimination of trafficking, and is placed on Tier 2 Watch List for
a third consecutive year. Bangladesh was not placed on Tier 3
per Section 107 of the 2008 Trafficking Victims Protection
Reauthorization Act, however, as the government has shown
evidence of a credible, written plan that, if implemented, would
constitute making significant efforts to bring itself into compliance
with the minimum standards for the elimination of trafficking and is
devoting sufficient resources to implement that plan. The
Government of Bangladesh demonstrated increased attention to
the issue of human trafficking. The government continued to
address the sex trafficking of women and children, drafted and
submitted a comprehensive anti-trafficking law to the cabinet, and
created an interagency task force mandated to monitor recruiting
agencies and address high recruitment fees. The government did
not prosecute or convict those who trafficked men, as well as
those responsible for subjecting Bangladeshi workers to forced
labor overseas through fraudulent recruitment mechanisms. The
government did not report on law enforcement efforts against
Bangladeshi officials who were complicit in human trafficking.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: The Awami League-led government has been
committed to combating domestic and transnational terrorist
groups since coming into power in January 2009. Bangladesh
continued improving its counterterrorism cooperation with its
international partners in 2010. The Bangladesh government's
ongoing counterterrorism efforts have denied space to and
prevented the unfettered operation of transnational terrorists
seeking to establish safe havens in Bangladesh. Denying terrorist
groups freedom of movement, increased counterterrorism
policing, and other law enforcement efforts have hindered terrorist
groups from using Bangladesh as a base of operations or transit
point from which to attack the country’s neighbors.
In October, Bangladesh law enforcement arrested several
individuals alleged to have ties to extremist groups including
Lashkar-e Tayyiba (LeT) and Harakat ul-Jihad-i-Islami/
Bangladesh (HUJI-B).
Legislation and Law Enforcement: The government passed the
Anti-Terrorism Act of 2009 and was in the process of fully
implementing the law, including Bangladesh's first counterterrorist
finance provisions, during 2010. The government has made
numerous well-publicized seizures and arrests of persons alleged
to be associated with terrorist organizations including HUJI-B,
LeT, Jama’at-ul-Mujahideen Bangladesh, and Hizb-ut Towhid.
Few convictions appeared to have resulted from those arrests,
however, as the judiciary has continued to work slowly on cases
involving terrorism due to a lack of prosecutorial capacity and
requisite legal provisions.
Countering Terrorist Finance: The Government of Bangladesh
passed new anti-money laundering and counterterrorist finance
laws in 2009. In 2010, the government was in the process of
implementing these provisions, and examining further areas for
legislative improvements to the Money Laundering Prevention Act
and the Anti-Terrorism Act, actions that reflected Bangladesh’s
receptivity to international peer review mechanisms and the
Financial Action Task Force (FATF) International Cooperation
Review Group process. In November, the government established
the National Coordinating Committee, comprised of all agencies
dealing with the anti-money laundering/countering terrorist
finance issue, to provide operational level coordination and to
develop a national strategy.
Bangladesh is a member of the Asia/Pacific Group against Money
Laundering, a FATF-style regional body, and hosted the annual
conference in Dhaka. During the typologies conference, the FATF
and/or FATF style regional body member countries exchanged
information on significant money laundering and terrorist financing
cases and operations, and discussed effective countermeasures.
Additionally, the Bangladesh Bank (the national bank) and its
Financial Intelligence Unit/Anti-Money Laundering Section led the
government's effort to comply with the international sanctions
regime.
Regional and International Cooperation: U.S. and Bangladeshi law
enforcement agencies cooperated well on several cases related
to domestic and international terrorism. Bangladesh cooperated
with the United States and other international partners to further
strengthen control of its borders and land, sea, and air ports of
entry. Moreover, the Bangladeshis increased their cooperation
with their regional neighbors, most notably with India with whom
they increased information sharing, prisoner exchanges, and law
enforcement cooperation.
Countering Radicalization and Violent Extremism: The Bangladesh
Ministry of Religious Affairs, the Ministry’s Islamic Foundation
Bangladesh, and USAID have cooperated on Bangladesh’s
Leaders of Influence (LOI) project. LOI is a four-year old program
begun in 2007, designed to enhance the capacity of religious and
secular leaders to contribute to national development and
democratic reform efforts. In so doing, LOI set out to preserve and
promote values of democracy, tolerance, diversity, social
harmony, and understanding in Bangladeshi society. Under this
program, at least 20,000 community leaders, including at least
10,000 Imams, will have received training and hands-on
orientation to programs including democracy and governance,
gender equality, health, nutrition, family planning, HIV/AIDS,
employment generation, and disaster management. The basic
assumption underpinning the program has been that the
knowledge of different development aspects, gained through
training and exposure, will help these leaders increase tolerance
and decrease extremism and opportunities for terrorists to recruit
new adherents.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
Date: 16 February 2012
In October 2010, Bangladesh made a high-level political
commitment to work with the FATF and APG to address its
strategic AML/CFT deficiencies. Since October 2011, Bangladesh
has taken steps towards improving its AML/CFT regime, including
by issuing the Money Laundering Prevention Ordinance, 2012; an
Ordinance to amend the Anti Terrorism Act (ATA), 2009; and the
Mutual Legal Assistance Ordinance Criminal Matters, 2012. In
addition, Bangladesh has reframed its Voluntary Tax Compliance
(VTC) Programme, by issuing a new Statutory Regulatory Order
(SRO), which rescinded the previous VTC programme to address
the FATF concerns expressed in the public statement in the
Chairman’s Summary following the October 2011 plenary meeting.
However, the FATF has determined that certain strategic
AML/CFT deficiencies remain. Bangladesh should continue to
work on implementing its action plan to address these
deficiencies, including by: (1) adequately criminalising money
laundering and terrorist financing (Recommendation 1 and
Special Recommendation II); (2) establishing and implementing
adequate procedures to identify and freeze terrorist assets
(Special Recommendation III); (3) implementing adequate
procedures for the confiscation of funds related to money
laundering (Recommendation 3); (4) ensuring a fully operational
and effectively functioning Financial Intelligence Unit
(Recommendation 26); (5) improving suspicious transaction
reporting requirements (Recommendation 13 and Special
Recommendation IV); (6) improving international co-operation
(Recommendation 36, Recommendation 39 and Special
Recommendation V); and (7) issuing guidance to capital markets
intermediaries to effectively extend the AML/CFT obligations,
including with regard to the VTC program (Recommendation 5).
The FATF encourages Bangladesh to address its remaining
deficiencies and continue the process of implementing its action
plan.
____________________________________________________
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2011:
Bangladesh is not a regional financial center. Pervasive
corruption, drug trafficking, and human trafficking are the principal
sources of criminal proceeds; securities fraud; embezzlement;
and extortion are also notable sources of illicit proceeds.
Bangladesh’s geographic location, including its seaports and long
porous borders with India and Burma, makes it a key
transshipment point for drugs produced in both the ‘golden
triangle’ and ‘golden crescent’ regions, with drugs ultimately
bound for markets in Europe, the United States and Canada.
Bangladesh has a relatively low terrorist financing profile.
However, Bangladesh-based terrorist organization Jamaat ul-
Mujahideen Bangladesh (JMB) has publicly claimed to receive
funding from Saudi Arabia.
The Bangladeshi economy is cash based, and relies heavily on
remittances from expatriate Bangladeshi workers. Money transfers
outside of the formal banking sector, the post office, and licensed
foreign exchange houses are illegal. Nevertheless, the majority of
remittances are done through the underground “hawala” or
“hundi” system. Informal systems are used to avoid taxes,
customs duties, and currency controls, and criminals and criminal
organizations exploit these systems as a low-risk avenue to
conceal the proceeds of crime and to send illicit funds abroad.
Bangladesh is not an offshore banking center and has no
international free trade zones. The Central Bank reports a
considerable increase in remittances sent through official
channels, reaching approximately $10.99 billion between January
and December 2010. The increase is due to competition from
commercial banks through improved delivery time, guarantees,
and value-added services, such as group life insurance. However,
hundi and black market money exchanges remain popular due to
the non-convertibility of the local currency and the intense
scrutiny on foreign currency transactions in formal financial
institutions.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate
crimes: List approach
Legal persons covered: criminally: YES civilly: NO
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: YES
(Please refer to the Department of State’s Country Reports on
Terrorism, which can be found here: http://www.state.
gov/s/ct/rls/crt/)
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Banks, financial institutions, insurance
companies, money changers and remitters; institutions conducting
business under approval of Bangladesh Bank; stock dealers and
brokers, portfolio managers, merchant banks, securities
custodians, asset managers; and non-profit and non-
governmental organizations
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: NO
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Banks, financial institutions, insurance
companies, money changers and remitters; institutions conducting
business under approval of Bangladesh Bank; stock dealers and
brokers, portfolio managers, merchant banks, securities
custodians, asset managers; and non-profit and non-
governmental organizations
Number of STRs received and time frame: 44 in 2010
Number of CTRs received and time frame: Not available
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: Five in 2010
Convictions: One in 2010
Assets forfeited: criminally: 2.32 crore Taka (approximately
$336,200) civilly: Not applicable
RECORDS EXCHANGE MECHANISM:
With U.S.: NO
With other governments/jurisdictions: YES
Bangladesh is a member of the Asia/Pacific Group on Money
Laundering (APG), a Financial Action Task Force (FATF)-style
regional body. Its most recent mutual evaluation can be found
here: http://www.apgml.org/documents/docs/17/Bangladesh%
20ME2%20-%20final120809.pdf
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
The Government of Bangladesh (GOB) has demonstrated a
strong policy level commitment to cooperate with international
partners and strengthen its AML/CFT regime, but effective
implementation remains a significant issue. In late 2010, the GOB
worked with the U.S. Department of Justice to draft stronger
AML/CFT legislation. Also in 2010, the GOB assisted a U.S.
federal court with an asset forfeiture case with ties to Bangladesh
and Singapore. The GOB should continue its work on the
amendments to the Money Laundering Prevention Act (MLPA)
and the Anti-Terrorism Act (ATA), including implementing
mechanisms, and should continue to improve investigation,
prosecution, supervision, and enforcement capacity.
The GOB acknowledges corruption is pervasive in Bangladesh,
and that it undermines effective implementation of AML/CFT
measures. Investigations are compromised by corruption in many
law enforcement organizations, including police and customs. The
GOB has made combating corruption a national priority and has
had success in investigating and prosecuting straightforward
corruption cases. However, the GOB does not yet have sufficient
training or experience to comprehensively pursue complex cases
involving both corruption and money laundering through foreign
jurisdictions or multi-layered investment schemes. The GOB
should continue its aggressive investigations into corruption and
enhance training of investigators so they better understand its
relationship to money laundering and related crimes.
The GOB should amend its legislation, as necessary, to prohibit
“tipping off” and to provide a safe harbor for financial institutions
and their employees who report suspicious activity to the GOB in
good faith. Additionally, Bangladesh should become a party to the
UN Convention against Transnational Organized Crime.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
Bangladesh was not a significant cultivator or producer of
narcotics in 2011. Government of Bangladesh (GOB) officials
charged with controlling and preventing illegal substance
trafficking lack sufficient training, and equipment to address the
growing precursor chemical trafficking situation and the influx of
“yaba” (methamphetamine pills) from Burma. Law enforcement
agencies nevertheless interdicted narcotics, from the Golden
Crescent in South Asia and the Golden Triangle in Southeast
Asia, smuggled into Bangladesh along its porous borders. GOB
law enforcement agencies also continue to assist DEA in
providing critical information related to (express parcel) shipments
containing ephedrine and pseudoephedrine that are sent to
Mexican based methamphetamine trafficking organizations. There
is no direct evidence that corruption in law enforcement agencies
is hampering the country’s drug interdiction efforts in targeting
significant precursor chemicals or yaba traffickers. Bangladesh is
a party to the 1988 UN Drug Convention, the 1961 UN Single
Convention as amended by the 1972 Protocol, the 1971 UN
Convention on Psychotropic Substances, and the UN Convention
against Corruption. On July 13, 2011, Bangladesh acceded to the
UN Convention against Transnational Organized Crime
Assessments conducted by several U.S. agencies in 2009 and
2010 confirmed numerous land, sea and air border security
vulnerabilities in Bangladesh that could be easily exploited by
narcotics traffickers. The Bangladesh Department of Narcotics
Control (DNC) said it was unable to estimate the number of drug
addicts in the country. The NGO community also does not have
reliable numbers, with estimates ranging wildly between 100,000
to 1.7 million addicts out of a population of 160 million. Among
classes of drug users where better estimates are possible, NGO
sources estimate 20,000-25,000 injecting drug users and 45,000
heroin smokers. Other drugs used in Bangladesh were
methamphetamines, marijuana, and the codeine-based cough
syrup phensidyl. Most of the yaba circulating in Bangladesh is
smuggled from neighboring countries such as Burma. The GOB
considers the smuggling, diversion and abuse of pharmaceuticals
originating from India one of the largest drug problems in
Bangladesh. Poor, uneducated, unemployed youth are the group
most under threat of drug abuse in Bangladesh. More than 20
percent of recent drug arrestees are under the age of 16. Street
children, who sometimes come from a drug abusing milieu with
close relatives abusing drugs, and who are lured into selling
drugs, are under especially great risk of debilitating drug abuse.
Among street children who inject drugs, high percentages (65
percent) share needles, and similarly high percentages engage in
either risky sexual behavior or are abused sexually themselves.
The resultant risk of HIV/AIDS transmission in this vulnerable
group is obvious.
The International Narcotics Control Board estimated that small
quantities of cannabis are cultivated in Bangladesh for local use.
The DNC acknowledged that cannabis is cultivated in the hill
tracts near Chittagong, in the southern silt islands, and in the
northeastern region. The DNC also reported DNC officers, in
coordination with other law enforcement officials, eradicated
cannabis crops as soon as crops were located. According to
Central American and United States law enforcement agencies,
Pseudoephedrine shipped from Bangladesh was diverted to
Central America for production of methamphetamine destined
primarily for the United States.
The most frequently abused drugs in Bangladesh are low quality
heroin, phensidyl (illegally smuggled from India) and cannabis.
Heroin was smuggled into Bangladesh by couriers from Pakistan,
by commercial vehicles or trains from India, by trucks or public
transport from Burma and by sea via the Bay of Bengal. The
Chittagong port appeared to be the main exit point for narcotics
leaving Bangladesh. One report from the U.S. Department of
Homeland Security described a chaotic situation at Benapole, the
main land border crossing between India and Bangladesh, which
could easily be exploited by narcotics traffickers. The report noted
examination of luggage items was cursory at best.
Bangladesh law enforcement officials believe that drug abuse,
while previously a problem among the ultra-poor, is becoming a
major problem among the wealthy and well-educated youth as
well. The DNC ran treatment centers in Dhaka, Chittagong,
Rajshahi, Khulna, Jessore and Comilla. A drug addicts’
rehabilitation organization, Ashokti Punorbashon Nibash (APON),
Bengali for the NGO, operates six long-term residential
rehabilitation centers, including the first centers in Bangladesh for
the rehabilitation of female addicts. APON says it is the only
organization that includes street children in its drug rehabilitation
program.
Drug trafficking to Bangladesh and diversion of medicine for
abuse have contributed to a growing addiction problem, especially
among the most vulnerable in society. Problems at Bangladesh’s
ports make drug trafficking more difficult to control. The GOB and
donors, including the USG, will need to focus on these problems
to bring about improvements.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2 Watch List)
Bangladesh is a source and transit country for men, women, and
children subjected to forced labor and sex trafficking. A significant
share of Bangladesh’s trafficking victims consists of men recruited
for work overseas with fraudulent employment offers who are
subsequently exploited under conditions of forced labor or debt
bondage. Bangladeshi children and adults also are trafficked
internally for commercial sexual exploitation, domestic servitude,
and forced and bonded labor. Some children are sold into
bondage by their parents, while others are induced into labor or
commercial sexual exploitation through fraud and physical
coercion. Internal trafficking often occurs from poorer, more rural
regions, to locations with more commercial activity including
Dhaka and Chittagong, the country’s two largest cities. Women
and children from Bangladesh are trafficked to India and Pakistan
for commercial sexual exploitation or forced labor. Many Rohingya
refugees from Burma transit through Bangladesh using unofficial
methods, leaving them vulnerable to traffickers inside Bangladesh
and in destination countries. In 2010, some Rohingya girls were
forced into prostitution.
Bangladeshi men and women migrate willingly to Saudi Arabia,
Bahrain, Kuwait, the United Arab Emirates (UAE), Qatar, the
Maldives, Iraq, Iran, Lebanon, Malaysia, Singapore, Libya,
Europe, and other countries for work, often under legal and
contractual terms. Most Bangladeshis who seek overseas
employment through legal channels rely on the over 1,000
recruiting agencies belonging to the Bangladesh Association of
International Recruiting Agencies (BAIRA). These agencies are
legally permitted to charge workers up to $1,235 and place
workers in low-skilled jobs typically paying between $100 and
$150 per month, but workers are sometimes charged $6,000 or
more for these services. Many Bangladeshi migrant laborers are
victims of recruitment fraud, including exorbitant recruitment fees
often accompanied by fraudulent representation of terms of
employment; high recruitment fees increase vulnerability to debt
bondage and forced labor among transnational migrant workers.
Women typically work as domestic servants; some find themselves
in situations of forced labor or debt bondage where they face
restrictions on their movements, nonpayment of wages, threats,
and physical or sexual abuse. Some Bangladeshi women working
abroad are subsequently forced into prostitution. Some
Bangladeshis have been convicted by foreign governments for
their human trafficking crimes abroad. There are reports of an
increased number of Bangladeshis transiting through Nepal to
obtain Nepalese visas and work permits for employment in the
Gulf, and many of them are likely trafficking victims. Many
Bangladeshi migrant workers – including trafficking victims – were
stranded in Libya in early 2011 due to the civil conflict in that
country. Trafficking victims among these migrant workers may be
particularly vulnerable to being trapped in Libya as a result of the
confiscation of their travel documents and unpaid wages. Some of
these migrants who have been able to return to Bangladesh are
under pressure to repay the high debts they incurred for
recruitment fees.
Bangladesh does not fully comply with the minimum standards for
the elimination of trafficking, and is placed on Tier 2 Watch List for
a third consecutive year. Bangladesh was not placed on Tier 3
per Section 107 of the 2008 Trafficking Victims Protection
Reauthorization Act, however, as the government has shown
evidence of a credible, written plan that, if implemented, would
constitute making significant efforts to bring itself into compliance
with the minimum standards for the elimination of trafficking and is
devoting sufficient resources to implement that plan. The
Government of Bangladesh demonstrated increased attention to
the issue of human trafficking. The government continued to
address the sex trafficking of women and children, drafted and
submitted a comprehensive anti-trafficking law to the cabinet, and
created an interagency task force mandated to monitor recruiting
agencies and address high recruitment fees. The government did
not prosecute or convict those who trafficked men, as well as
those responsible for subjecting Bangladeshi workers to forced
labor overseas through fraudulent recruitment mechanisms. The
government did not report on law enforcement efforts against
Bangladeshi officials who were complicit in human trafficking.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: The Awami League-led government has been
committed to combating domestic and transnational terrorist
groups since coming into power in January 2009. Bangladesh
continued improving its counterterrorism cooperation with its
international partners in 2010. The Bangladesh government's
ongoing counterterrorism efforts have denied space to and
prevented the unfettered operation of transnational terrorists
seeking to establish safe havens in Bangladesh. Denying terrorist
groups freedom of movement, increased counterterrorism
policing, and other law enforcement efforts have hindered terrorist
groups from using Bangladesh as a base of operations or transit
point from which to attack the country’s neighbors.
In October, Bangladesh law enforcement arrested several
individuals alleged to have ties to extremist groups including
Lashkar-e Tayyiba (LeT) and Harakat ul-Jihad-i-Islami/
Bangladesh (HUJI-B).
Legislation and Law Enforcement: The government passed the
Anti-Terrorism Act of 2009 and was in the process of fully
implementing the law, including Bangladesh's first counterterrorist
finance provisions, during 2010. The government has made
numerous well-publicized seizures and arrests of persons alleged
to be associated with terrorist organizations including HUJI-B,
LeT, Jama’at-ul-Mujahideen Bangladesh, and Hizb-ut Towhid.
Few convictions appeared to have resulted from those arrests,
however, as the judiciary has continued to work slowly on cases
involving terrorism due to a lack of prosecutorial capacity and
requisite legal provisions.
Countering Terrorist Finance: The Government of Bangladesh
passed new anti-money laundering and counterterrorist finance
laws in 2009. In 2010, the government was in the process of
implementing these provisions, and examining further areas for
legislative improvements to the Money Laundering Prevention Act
and the Anti-Terrorism Act, actions that reflected Bangladesh’s
receptivity to international peer review mechanisms and the
Financial Action Task Force (FATF) International Cooperation
Review Group process. In November, the government established
the National Coordinating Committee, comprised of all agencies
dealing with the anti-money laundering/countering terrorist
finance issue, to provide operational level coordination and to
develop a national strategy.
Bangladesh is a member of the Asia/Pacific Group against Money
Laundering, a FATF-style regional body, and hosted the annual
conference in Dhaka. During the typologies conference, the FATF
and/or FATF style regional body member countries exchanged
information on significant money laundering and terrorist financing
cases and operations, and discussed effective countermeasures.
Additionally, the Bangladesh Bank (the national bank) and its
Financial Intelligence Unit/Anti-Money Laundering Section led the
government's effort to comply with the international sanctions
regime.
Regional and International Cooperation: U.S. and Bangladeshi law
enforcement agencies cooperated well on several cases related
to domestic and international terrorism. Bangladesh cooperated
with the United States and other international partners to further
strengthen control of its borders and land, sea, and air ports of
entry. Moreover, the Bangladeshis increased their cooperation
with their regional neighbors, most notably with India with whom
they increased information sharing, prisoner exchanges, and law
enforcement cooperation.
Countering Radicalization and Violent Extremism: The Bangladesh
Ministry of Religious Affairs, the Ministry’s Islamic Foundation
Bangladesh, and USAID have cooperated on Bangladesh’s
Leaders of Influence (LOI) project. LOI is a four-year old program
begun in 2007, designed to enhance the capacity of religious and
secular leaders to contribute to national development and
democratic reform efforts. In so doing, LOI set out to preserve and
promote values of democracy, tolerance, diversity, social
harmony, and understanding in Bangladeshi society. Under this
program, at least 20,000 community leaders, including at least
10,000 Imams, will have received training and hands-on
orientation to programs including democracy and governance,
gender equality, health, nutrition, family planning, HIV/AIDS,
employment generation, and disaster management. The basic
assumption underpinning the program has been that the
knowledge of different development aspects, gained through
training and exposure, will help these leaders increase tolerance
and decrease extremism and opportunities for terrorists to recruit
new adherents.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
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*Please note that FATF deems that a country has significant aml deficiencies if any
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
| BANGLADESH |
| KnowYourCountry |
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AML News/Updates
November 5, 2011 - At the plenary meeting held in Paris in October,
2011, FATF heard a report on the voluntary tax compliance (VTC)
programme in Bangladesh (which has been enacted since July 2011 and
is currently scheduled to complete in June 2012), and its possible
negative impacts on AML/CFT measures in the country. The FATF also
heard an update from the APG on the reviews and actions that it has
taken in relation to this issue. As there are concerns about the potential
impact of the VTC programme on the effective application of the FATF
standards, the FATF decided to refer consideration of the VTC
programme to the ICRG, in the context of its ongoing process concerning
Bangladesh.
November 5, 2011 - At the plenary meeting held in Paris in October,
2011, FATF heard a report on the voluntary tax compliance (VTC)
programme in Bangladesh (which has been enacted since July 2011 and
is currently scheduled to complete in June 2012), and its possible
negative impacts on AML/CFT measures in the country. The FATF also
heard an update from the APG on the reviews and actions that it has
taken in relation to this issue. As there are concerns about the potential
impact of the VTC programme on the effective application of the FATF
standards, the FATF decided to refer consideration of the VTC
programme to the ICRG, in the context of its ongoing process concerning
Bangladesh.
| Last Updated: 16 April 2012 |