‘Finding those who launder money isn't a difficult task’
Skip to main content
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Splash
  • Features
  • Videos
  • Long Read
  • Games
  • Epaper
  • More
    • COVID-19
    • Bangladesh
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Subscribe
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
The Business Standard
SUNDAY, MAY 22, 2022
SUNDAY, MAY 22, 2022
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Splash
  • Features
  • Videos
  • Long Read
  • Games
  • Epaper
  • More
    • COVID-19
    • Bangladesh
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Subscribe
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
‘Finding those who launder money isn't a difficult task’

Analysis

Dr Muinul Islam, Economist
08 June, 2021, 10:40 pm
Last modified: 09 June, 2021, 01:32 pm

Related News

  • FBI to help ACC recover siphoned off money to US, Canada
  • We will do everything regarding PK Halder, says Momen after fugitive businessman's arrest in India
  • Bangladesh has become a paradise for money launderers: GM Quader
  • ‘Preventing money laundering is simply a matter of political goodwill’
  • Haji Selim returns to country

‘Finding those who launder money isn't a difficult task’

Previously, sending money overseas used to take place under-invoicing of exports and invoicing of imports. But now the hundi method has gained more popularity

Dr Muinul Islam, Economist
08 June, 2021, 10:40 pm
Last modified: 09 June, 2021, 01:32 pm
Muinul Islam
Muinul Islam

Every year, a large chunk of 'illegal money' or 'black money is being sent to Begum Para of Canada, Malaysia, USA, Australia, to buy real estate/business with the aim of settling down there in the future and never coming back to the country to avoid paying bank loans.

This failure to repay has become a huge problem for us. It is the problem of capital flight. This has originated from the fact that our 13 million emigrants don't send all of their remittances through legal channels.

Previously, sending money overseas used to take place through under-invoicing of exports and over-invoicing of imports. But now the hundi method has gained more popularity. Different countries allow immigration to the entire family if a certain amount of money is transferred. This is prevalent in the US, Canada, Australia, and different parts of Europe.

The corrupted individuals from our country are taking undue advantage of this rule quite regularly. For instance, a lot of the garment owners don't bring a significant portion of the money they earn from exports to our country. They keep it overseas, buy homes and businesses with that, and migrate there with their family. Again, the importers are over-invoicing their imports, taking loans from banks using that, and are doing the same. This is the problem of capital flight.

Our decision of giving people the opportunity to make their black money white by imposing 10% tax is facilitating the process of money laundering as it allows people to legalise the money they have earned through illegal methods. This will encourage them more to engage in corruption and launder money.

This also raises an important question- what wrong the honest taxpayers who are having to pay 20%/25% tax have done for which they are paying higher tax? This is also unconstitutional in accordance with Article 20 (2) of the Constitution of the People‌‌‍'s Republic of Bangladesh, "The State shall endeavour to create conditions in which, as a general principle, persons shall not be able to enjoy unearned incomes, and in which human labour in every form, intellectual and physical, shall become a fuller expression of creative endeavour and of the human personality."

Another popular way to launder money is through Hundi. Bangladeshis living overseas send remittances to their relatives and friends through Hundi. It works as a credit transfer or IOU (I owe you—a document that acknowledges the existence of a debt), and transfers money without actually moving it from one region to another.

So, what has happened is that the remittance that was supposed to come is not coming in foreign currency and the relatives of emigrants are getting this money in local currency, whereas the amount in foreign currency is being laundered abroad. Global Financial Integrity (GFI) is saying that every year, $6-10 Billion is being laundered in this way from Bangladesh, and we have turned into a major player in terms of money laundering.

So, even this year, the $24-25 billion remittance we will receive, a big portion of it will come to Bangladesh through Hundi, just as an attempt by corrupt people to turn their black money into legitimate money.

Capital flight, in particular, is very harmful for us because this money will never come back to our country, and banks will never have a chance of getting the money taken as loans back.

But with money laundering, there is a chance that the money will come back to our country, and it will contribute to our economy. This will be used in investment, plus the family that will be benefited by the remittance money, they will be to improve their overall standard of living. So, it cannot be said that this is entirely bad. But if it is done through taking loans from banks, and not repaying them, then, these banks will be in deep water because of the overwhelming amount of loan defaulters.

Finding those who launder money isn't a difficult task. The government can send research teams to countries where the money is mainly laundered to collect information. Collecting this information isn't difficult but the government is hesitant because mainly those who are affiliated with the government are involved in money laundering.

It is very clear that the people who are engaged in corruption are mainly those who have close ties with our government. So, it is unreasonable to expect that the current government will take steps to collect this information.

Although we are a signatory of the United Nations Convention against Corruption, it is not accidental that we have become the world champion in corruption five times. We are still not in a good position. We still hold the unwanted number one position in corruption in South Asia. Prevalence of corruption here is much more intense in our country than Nepal, India, Pakistan.

Top News

black money / Money laundering

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • VAT on sales of locally-produced APIs likely to go from FY23
    VAT on sales of locally-produced APIs likely to go from FY23
  • Project delays: The Sinohydro case
    Project delays: The Sinohydro case
  • Haji Salim surrenders before court, seeks conditional bail 
    Haji Salim surrenders before court, seeks conditional bail 

MOST VIEWED

  • Illustration: TBS
    How the ban on porn sites spawned a local cybersex industry
  • Anthony Albanese, leader of Australia's Labor Party, shows a thumbs up sign while addressing supporters after incumbent Prime Minister and Liberal Party leader Scott Morrison conceded defeat in the country's general election, in Sydney, Australia May 21, 2022. REUTERS/Jaimi Joy
    In sharp switch, Australia votes for climate action
  • Looking for guidance.Photographer: : Qilai Shen/Bloomberg
    In China tech earnings, numbers no longer matter
  • Cracks in US economy start to show as recession warnings mount
    Cracks in US economy start to show as recession warnings mount
  • Zahid Hussain/TBS Sketch
    Our problematic macroeconomic duo
  • US growth seen outpacing China’s for first time since 1976
    US growth seen outpacing China’s for first time since 1976

Related News

  • FBI to help ACC recover siphoned off money to US, Canada
  • We will do everything regarding PK Halder, says Momen after fugitive businessman's arrest in India
  • Bangladesh has become a paradise for money launderers: GM Quader
  • ‘Preventing money laundering is simply a matter of political goodwill’
  • Haji Selim returns to country

Features

Illustration: TBS

How the ban on porn sites spawned a local cybersex industry

2h | Panorama
3 best affordable sunscreens for all

3 best affordable sunscreens for all

2h | Mode
Warah uses three types of khadi material: a sheer and light one, a medium count and a thicker one.

Warah: Embroidered with culture and womanhood

4h | Mode
Photo: Courtesy

Misfit Technologies: A Singaporean startup rooted firmly in Bangladesh

4h | Panorama

More Videos from TBS

CV or Resume: Which one to create for job application

CV or Resume: Which one to create for job application

3h | Videos
Wheat prices double in India

Wheat prices double in India

17h | Videos
Is Washington-Moscow agreement possible?

Is Washington-Moscow agreement possible?

18h | Videos
Pigeon exhibition for the first time in Gazipur

Pigeon exhibition for the first time in Gazipur

22h | Videos

Most Read

1
Tk100 for bike, Tk2,400 for bus to cross Padma Bridge
Bangladesh

Tk100 for bike, Tk2,400 for bus to cross Padma Bridge

2
A packet of US five-dollar bills is inspected at the Bureau of Engraving and Printing in Washington March 26, 2015. REUTERS/Gary Cameron
Banking

Dollar hits Tk100 mark in open market

3
The story of Bangladesh becoming a major bicycle exporter
Industry

The story of Bangladesh becoming a major bicycle exporter

4
PK Halder: How a scamster rose from humble beginnings to a Tk11,000cr empire
Crime

PK Halder: How a scamster rose from humble beginnings to a Tk11,000cr empire

5
BSEC launches probe against Abul Khayer Hero and allies
Stocks

BSEC launches probe against Abul Khayer Hero and allies

6
The reception is a volumetric box-shaped room that has two glass walls on both the front and back ends and the other two walls are adorned with interior plants, wood and aluminium screens. Photo: Noor-A-Alam
Habitat

The United House: Living and working inside nature

The Business Standard
Top
  • Home
  • Entertainment
  • Sports
  • About Us
  • Bangladesh
  • International
  • Privacy Policy
  • Comment Policy
  • Contact Us
  • Economy
  • Sitemap
  • RSS

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net

Copyright © 2022 THE BUSINESS STANDARD All rights reserved. Technical Partner: RSI Lab