Risk Indicators
- FATF/EU Blacklist/Greylist (Lower Concern)
- Terrorism Financing (Medium Concern)
- US Dept of State INCSR
- Proliferation Financing
- Corruption
- Criminality
- Resilience & Governance
- Financial Transparency
- Offshore Finance Centres
- Sanctions
Background
Bangladesh emerged from the historic Bengal delta through a complex succession of regional, imperial, and colonial influences before becoming East Pakistan after the 1947 partition of India. Political tensions between the eastern and western wings of Pakistan culminated in a Bengali independence movement led by the Awami League and supported by India, resulting in independence in 1971. Its post-independence history included coups, military-backed rule, alternating BNP and Awami League governments, and a return to democratic rule under Prime Minister Sheikh Hasina in 2008.
In recent decades, Bangladesh has recorded sustained economic growth, declining poverty, and broader improvements in human development, with anticipated graduation from the UN Least Developed Countries list in 2026. Its strategic environment is shaped by borders with India and Myanmar, as well as a limited connection to Nepal through Indian territory. Conflict in Myanmar’s Rakhine State, the continuing Rohingya influx, cross-border crime, and illicit movements create direct pressures, while India’s ties with Russia introduce more indirect concerns involving EU and US sanctions exposure.
AML & Terrorist Financing
Bangladesh has made notable AML/CFT progress and is no longer subject to FATF monitoring, while remaining in enhanced follow-up with the APG and showing mixed levels of technical compliance. Significant risks persist around corruption-linked laundering, smuggling, drugs, human trafficking, informal value transfer systems, and emerging terrorist-financing threats, including foreign-fighter financing and the misuse of nonprofit channels. Institutions such as the BFIU, Bangladesh Bank, ACC, and specialized law-enforcement units have strengthened the framework, yet challenges involving investigations beyond corruption, asset confiscation, beneficial ownership transparency, supervision of non-bank sectors, and timely prosecutions continue to shape the country’s financial-crime landscape.
Sanctions
Bangladesh implements applicable UN Security Council sanctions, including measures affecting sanctioned vessels, cargoes, and entities connected to regimes such as Iran. In October 2024, its Shipping Ministry warned against involvement with sanctioned maritime shipments, with potential license suspensions and criminal charges, amid concerns involving UAE-linked transfers of Iranian oil and LPG toward Chittagong. No international sanctions are currently in force against Bangladesh, although monitoring gaps, forged documentation, and vulnerable maritime trade routes have drawn scrutiny.
Criminality
Corruption remains a significant obstacle to investment and economic activity in Bangladesh, particularly in public procurement, tax and customs collection, and regulatory oversight, while enforcement of existing laws is inconsistent. The Anti-Corruption Commission, National Board of Revenue, and Department of Narcotics Control have relevant investigative roles, yet concerns persist alongside trafficking, extortion, counterfeit goods, illicit resource extraction, drug markets, cybercrime, and rising financial fraud involving politically connected and mafia-style networks.
Reports
Bangladesh remains a Tier 2 country amid expanded victim identification, trauma-informed training, and formal adoption of a national referral mechanism, while trafficking risks persist across migrant labor, informal industries, child exploitation, online recruitment, and Rohingya communities in Cox’s Bazar. Counterterrorism efforts faced institutional disruption after August 2024, even as authorities filed 40 terrorism cases involving 231 people, maintained watchlist and reintegration initiatives, and continued international cooperation through INTERPOL and regional forums.
Industry/Product Sector Risk
Bangladesh’s industry landscape presents a varied risk profile shaped by a cash-intensive economy, substantial remittance and trade flows, informal value transfer, and significant public-sector and cross-border activity. Banking, trade finance, real estate, securities, remittance services, transportation, construction, and politically connected activity feature among the more exposed areas, while the 2015 NRA highlights corruption, fraud, smuggling, tax evasion, and terrorism-financing concerns across selected sectors. Oversight by Bangladesh Bank, the Insurance Development and Regulatory Authority, and the BFIU provides important context, but uneven supervision, beneficial-ownership transparency, and controls among DNFBPs and emerging payment channels leave considerable detail to explore.
Economy & Investment Climate
Bangladesh combines a large, youthful workforce, strategic access to South and Southeast Asian markets, and an export base centered on garments and textiles with developing opportunities in ICT, pharmaceuticals, infrastructure, and energy. While BIDA, BEPZA, BEZA, and BHTPA promote investment, foreign businesses continue to navigate currency and reserve pressures, banking-sector weaknesses, regulatory uncertainty, infrastructure gaps, and reforms under the Interim Government and Bangladesh Bank.
Cryptocurrency Regulations
Bangladesh maintains a cautious and restrictive posture toward cryptocurrency, with Bangladesh Bank warnings and the Money Laundering Prevention Act of 2012 shaping an environment in which digital assets are not recognized as legal tender and are effectively banned. With no licensed VASPs, dedicated compliance registry, defined tax treatment, or clear rules for exchanges, ICOs, tokenization, or the Travel Rule, oversight remains concentrated around the Bangladesh Bank and BFIU while significant regulatory gaps persist.
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