7-yr jail for laundering in the name of foreign trade

Laundering money in the name of foreign trade will be considered a cognisable offence in court from now on, and the punishment will be a seven-year jail term or a fine or both.  

The property of the offender, be it an individual or an organisation, may be confiscated as well.

Earlier, violating the Foreign Exchange Regulation Act 1947 would not be considered a cognisable offence in court. As a result, more than 1,000 cases filed by the central bank are pending and trials are not being held.

The cases filed between 10 March 2020 and 31 December 2026 will now be considered cognisable but previous ones will not be, though the central bank requested the Financial Institutions Division to set the period between 2005 and 2025.

The Financial Institutions Division issued a notification in this regard on 10 March. The notification was issued as a circular by the Foreign Exchange Policy Department of the central bank on Monday.

Serajul Islam, executive director and spokesperson for the central bank, told The Business Standard the amendment to the law would now give the central bank proper control over foreign transactions.

He thinks offenders will become cautious now since there will be legal obligations.

"Earlier, such cases would be pending in court. Courts would not even accept cases. Now that it is a punishable offence, perpetrators will get a strong warning."

Siddiqur Rahman, former president of Bangladesh Garment Manufacturers and Exporters Association and vice-president of the Federation of Bangladesh Chambers of Commerce and Industry, told The Business Standard the business community has not objected to the law.

But it must be ensured that no one is unjustly harassed, he said.

He added that many Bangladeshi companies are now able to invest abroad and money laundering would decline if investment opportunities were made easier.

A large amount of foreign currency is laundered from Bangladesh in the name of imports and exports. Money is laundered by showing higher import volumes or lower export earnings.

A 2019 report by Global Financial Integrity – a Washington-based think tank focused on illicit financial flows, illicit trade, trade misinvoicing, and money laundering – said Tk6.86 lakh crore had been laundered from Bangladesh from 2005 to 2015.

The Bangladesh Bank has filed around 1,000 cases under the Foreign Exchange Regulation Act 1947 to stop money laundering or irregularities done in the name of imports and exports. But the cases could not be disposed of so far due to the weakness of the law.

Sources in the Bangladesh Bank said the unsettled bills of entry related to export earnings or imported goods not arriving in the country involve transactions of several billion dollars.

Moreover, a new law is being drafted as the Foreign Exchange Regulation Act is quite old. It may be completed by this year.