Bangladesh

Sanctions

No

FATF AML Deficient List

No

Higher Risk

Not on EU White list equivalent jurisdictions
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
Failed States Index (Political Issues)(Average Score)

Medium Risk

Non - Compliance with FATF 40 + 9 Recommendations
US Dept of State Money Laundering Assessment

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ANTI-MONEY LAUNDERING

 

FATF Status

Bangladesh is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Latest FATF Statement:  14 February 2014

The FATF welcomes Bangladesh’s significant progress in improving its AML/CFT regime and notes that Bangladesh has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in October 2010. Bangladesh is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Bangladesh will work with APG as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report.

 

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Bangladesh was undertaken in 2019. According to that Evaluation, Bangladesh was deemed Compliant for 8 and Largely Compliant for 26 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 3 of the Effectiveness & Technical Compliance ratings.

 

US Department of State Money Laundering assessment (INCSR)

 

Bangladesh was deemed a Jurisdiction of Concern by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -

While Bangladesh is not a regional financial center, its geographic location, seaports, and long porous borders with India and Burma make it a transshipment point for drugs produced in both the “golden triangle” of Southeast Asia and the “golden crescent” of Central Asia. Drug trafficking, corruption, fraud, counterfeit money, gold smuggling, and trafficking in persons are the principal sources of illicit proceeds. Bangladesh is also vulnerable to terrorism financing, including funding that flows through the hawala/hundi system and by cash courier. The Bangladesh-based terrorist organization Jamaat ul-Mujahideen Bangladesh has publicly claimed to receive funding from Saudi Arabia.

The Bangladeshi economy relies heavily on remittances, with remittances through official channels reaching over $15.3 billion in calendar year 2015. According to the central bank, the share of remittances transmitted through the formal sector is increasing although there remains widespread use of the underground and illegal hawala/hundi alternative remittance system.

Black market money exchanges remain popular because of the limited convertibility of the local currency, cash-based economy, and scrutiny of foreign currency transactions made through official channels. Alternative remittance and value transfer systems also are used to avoid taxes and customs duties. Additional terrorism financing vulnerabilities exist, especially the use of non-governmental organizations (NGOs), charities, counterfeiting, and loosely-regulated private banks.

 

SANCTIONS

There are no international sanctions currently in force against this country.

 

BRIBERY & CORRUPTION

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           26

World Governance Indicator – Control of Corruption             19

According to all major ranking institutions, Bangladesh routinely finds itself among the most corrupt countries in the world. Corruption is pervasive at all levels of society and companies have reported being subjected to costly and unnecessary licence and permit requirements. Reasons often include low salaries and weak institutional capacities. The Code of Criminal Procedure, the Prevention of Corruption Act, the Penal Code and the Money Laundering Prevention Act criminalise attempted corruption, extortion, active and passive bribery, bribery of foreign public officials, money laundering and using public resources or confidential state information for private gain. Nevertheless, anti-corruption legislation is inadequately enforced. Facilitation payments and gifts are illegal, but common in practice. For further information - GAN Integrity Business Anti-Corruption Portal

 

ECONOMY

Bangladesh's economy has grown roughly 6% per year since 1996 despite political instability, poor infrastructure, corruption, insufficient power supplies, slow implementation of economic reforms, and the 2008-09 global financial crisis and recession. Although more than half of GDP is generated through the services sector, almost half of Bangladeshis are employed in the agriculture sector, with rice as the single-most-important product.

Garment exports, the backbone of Bangladesh's industrial sector, accounted for more than 80% of total exports and surpassed $25 billion in 2015. The sector continues to grow, despite a series of factory accidents that have killed more than 1,000 workers, and crippling strikes, including a nationwide transportation blockade implemented by the political opposition during the first several months of 2015. Steady garment export growth combined with remittances from overseas Bangladeshis - which totaled about $15 billion and 8% of GDP in 2015 - are the largest contributors to Bangladesh's sustained economic growth and rising foreign exchange reserves.

Agriculture - products:

rice, jute, tea, wheat, sugarcane, potatoes, tobacco, pulses, oilseeds, spices, fruit; beef, milk, poultry

 

Industries:

jute, cotton, garments, paper, leather, fertilizer, iron and steel, cement, petroleum products, tobacco, pharmaceuticals, ceramics, tea, salt, sugar, edible oils, soap and detergent, fabricated metal products, electricity, natural gas.

Exports - commodities:

garments, knitwear, agricultural products, frozen food (fish and seafood), jute and jute goods, leather

 

Exports - partners:

US 13.9%, Germany 12.9%, UK 8.9%, France 5%, Spain 4.7% (2015)

Imports - commodities:

cotton, machinery and equipment, chemicals, iron and steel, foodstuffs

Imports - partners:

China 22.4%, India 14.1%, Singapore 5.2% (2015)

Investment Climate  -  US State Department

Bangladesh, the world’s eighth most populous country, offers promising opportunities for investment, especially in the energy, power, pharmaceutical, information technology, telecommunications, and infrastructure sectors as well as in labor-intensive industries such as readymade garments, household textiles, and leather processing. With over six percent annual growth sustained over the past two and a half decades, a large, young and hard-working workforce, strategic location, and vibrant private sector, Bangladesh is likely to attract increasing investment in coming years.

In January 2016, Prime Minister Sheikh Hasina inaugurated a high-level Investment and Policy Summit to address concerns that foreign investors have about Bangladesh’s investment climate and to announce multibillion dollar foreign investments in the energy sector. In March 2016, the Ministry of Commerce launched a new Bangladesh Trade Portal with the aim of providing an online center to assist investors in navigating the country’s trade and investment regulations.

The Government of Bangladesh actively seeks foreign investment, particularly in the apparel industry, energy, power, and infrastructure projects. It offers a range of investment incentives under its industrial policy and export-oriented growth strategy with few formal distinctions between foreign and domestic private investors. According to the central bank of Bangladesh, the country received $1.8 billion in foreign direct investment (FDI) FY 2014-15, up from $1.4 billion in the previous year.

Bangladesh has made gradual progress in reducing some constraints on investment, but inadequate infrastructure, limited financing capabilities, governmental and bureaucratic delays, and corruption continue to hinder foreign investment. Slow adoption of alternative dispute resolution mechanisms and sluggish judicial processes impede the enforcement of contracts and the resolution of business disputes. 2016 has so far been free of the significant political violence, uncertainty and disruptions to business operations seen during the first quarter of 2015 as a result of the one-year anniversary of 2014’s controversial national elections.

On June 27, 2013, President Obama announced his decision to suspend Bangladesh’s trade benefits under the Generalized System of Preferences (GSP) in view of insufficient progress by the Government of Bangladesh in affording Bangladeshi workers internationally recognized worker rights. At the time of the announcement, the Administration provided the Government of Bangladesh with a 16-point action plan outlining next steps as part of a longstanding effort to meaningfully address worker rights and safety problems in Bangladesh. The Government of Bangladesh is making progress towards meeting the requirements contained in the plan. Once fully implemented, the plan would provide a basis for the President to consider reinstating GSP trade benefits.

On November 25, 2013, the U.S.-Bangladesh Trade and Investment Cooperation Forum Agreement (TICFA) was signed in Washington, D.C. The agreement provides a mechanism for both countries to meet regularly and identify obstacles to increasing bilateral trade and investment and how to overcome those obstacles. The successful inaugural TICFA Council meeting was held in Dhaka on April 28, 2014, with a subsequent positive TICFA Council meeting held in Washington, D.C. from November 23-24, 2015 and both countries plan to continue TICFA meetings to advance bilateral economic relations. There is significant demand in major Bangladeshi cities for U.S. consumer products, and U.S. franchises are establishing a presence.

Total Foreign Direct Investment (FDI) in Bangladesh increased by 18.7 percent from FY 2014 to FY 2015. Sustained economic growth, an expanding energy sector, a demographic dividend, and increased reforms of the RMG sector are resulting in substantial interest in investing in Bangladesh. Government policies are generally in favor of increased economic growth, but are hampered by slow and incomplete implementation issues involving the regulatory and rule of law environment.

 

 

Country Links
Bangladesh Bank
Bangladesh Financial Intelligence Unit (BFIU)
Office of the Registrar of Joint Stock Companies and Firms
Other Useful Links
FATF
US State Department
Transparency International
World Bank
CIA World Factbook

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