Move to empower ACC to probe all trade-based money laundering cases

Infographic: TBS

The government is granting the Anti-Corruption Commission (ACC) power to investigate all types of trade-based money laundering cases, enhancing its authority. The commission would be able to unearth crimes related to capital market fraud, illicit transfer of funds abroad, money laundering through export-import activities and illegal financial practices like hundi.

Currently, the ACC has the authority to investigate just one of the 27 types of offences identified in the Money Laundering Prevention Act. It can only probe money laundering offences arising from bribery and corruption of public servants.

The agency cannot investigate allegations of money laundering against citizens who are not government employees.

As part of the effort, a process is underway to amend relevant law and regulations.

Citing surveys conducted by international agencies including PricewaterhouseCoopers and Global Financial Intelligence, ACC officials say 80% of money laundering from Bangladesh is done under the guise of imports and exports.

But due to clipping the wings of the ACC through various legal amendments over the years, the agency currently lacks the authority to investigate such allegations.

According to the current legislation, the Bangladesh Securities and Exchange Commission (BSEC) possesses exclusive jurisdiction to investigate crimes pertaining to insider trading and market manipulation within the capital market.

The National Board of Revenue (NBR) and the Criminal Investigation Department (CID) can investigate money laundering through tax evasion, and local or foreign currency smuggling.

Twists and turns

On 21 June, the Financial Institutions Division of the Ministry of Finance issued a letter to the Bangladesh Financial Intelligence Unit, urging them to initiate the necessary amendments to equip the ACC for combating money laundering crimes.

This aligns with a previous letter dated 30 May from the Cabinet Division to the Financial Institutions Division, emphasising the need to grant the ACC the authority to investigate all types of crimes outlined in the Money Laundering Prevention Act.

On 11 December last year, an inter-ministerial meeting was conducted, chaired by Sheikh Mohammad Salim Ullah, secretary of the Financial Institutions Division. Its primary agenda was to amend the existing act and regulations to authorise the ACC to investigate all categories of crimes specified under the law.

As per the meeting minutes, the High Court in 2017 stated that the ACC should investigate all money laundering offences. But the watchdog encountered challenges in implementing this ruling due to its limited jurisdiction.

The ACC then wrote to the Cabinet Division, requesting for necessary powers to investigate all types of crimes specified in the Money Laundering Prevention Act, according to the meeting minutes.

The Act, when passed in 2002, did not specify any investigative agency.

Through an amendment in 2009, the Act entrusted the investigation solely to the anti-graft body.  For the first time, 16 types of crimes were included in the Act and the ACC was given jurisdiction to probe all of them.

In 2012, following the repeal of the previous Act, the government introduced a new anti-money laundering act that specifically outlined 27 criminal offences.

Additionally, the ACC and any other agency authorised by the ACC were designated as the investigative bodies under the new legislation.

In 2015, the Act underwent further amendments, resulting in the jurisdiction of the ACC being limited to only cases related to bribery and corruption of government officials.

The responsibility for investigating other crimes was assigned to various agencies, such as the CID, the NBR, the Department of Narcotics Control, the Department of Environment, and the BSEC, as stated in the Money Laundering Prevention rules formulated in 2019.

In 2015, the Asia-Pacific Group on Money Laundering (APG) gave Bangladesh the lowest rating in terms of investigating money laundering because the ACC itself did not file money laundering cases except for those related to bribery and corruption.

However, ACC officials said apart from bribery and corruption cases, the commission has investigated and prosecuted some money laundering cases including the ones involving UniPay2U and Destiny.

At the inter-ministerial meeting last year, they said the Money Laundering Act 2012 opened a pathway for the ACC to investigate money laundering crimes other than graft and corruption cases. But, from 2012-2015 no information on such crimes was shared with the agency by other government agencies.

Can the change bring success?

Iftekharuzzaman, executive director of the Transparency International, Bangladesh (TIB) told The Business Standard, "We think that ACC should have the power to investigate all types of money laundering related crimes.

"When the Money Laundering Prevention Act was first enacted, the ACC had this jurisdiction. We do not know why the powers of the ACC were later curtailed."

He further said that money laundering will not stop even if the ACC has the power to investigate all types of crimes identified in the act.

"But we think the ACC should have the power to investigate such cases along with other agencies. And if the ACC conducts investigations in coordination with other agencies, success can come in preventing money laundering," said the TIB boss.

The experts also emphasised that the ACC would require a skilled and trained workforce capable of effectively addressing the complexities of trade-based money laundering.

ACC officials claim to have achieved greater success than any other investigative agency in the recovery of funds laundered abroad through legal means.

But Nasir Uddin, former commissioner of the agency, said it still lacks skilled manpower to deal with all the money laundering crimes.

"I worked in the ACC for five years. The capacity of the agency has improved compared to that time, but it still has some lacking," he said.

"Trade-based money laundering is a highly complex matter requiring specialised expertise. In the past, there have been challenges in conducting efficient investigations related to this issue. The ACC lacks trained manpower in this regard. There are also doubts about whether the officers who are trained have necessary skills," he said