Citizens who own second home abroad to come under scanner

In a bid to stop money laundering, the government has decided to identify the citizens who own a second home abroad and those who have a long-stay visa.

To this end, a study will be conducted by December this year.

The information has been revealed in the "National Strategy for Prevention of Money Laundering and Combating Financing of Terrorism 2019-2021" that was unveiled at a seminar yesterday.

The seminar was organised jointly by the Bangladesh Bank, the Ministry of Finance, and the Ministry of Foreign Affairs at the Intercontinental Dhaka hotel in the capital.

The national strategy has incorporated a detailed action plan to prevent capital flight in the wake of a finding that says around $85.5 billion, which is equivalent to Tk7.26 lakh crore at the current exchange rate of Tk85, was siphoned off from the country through misinvoicing in 10 years from 2006 to 2015.

According to data revealed in the national strategy report, this amount was 17.5 percent of the country's total foreign trade in the period. During the same period, the average trade-based money laundering from developing countries stood at 12.4 percent.

Referring to the Global Financial Integrity (GFI), the national strategy report noted that in 87 percent of the cases money laundering is done through trade misinvoicing in the developing countries. 

The government has framed 11 strategies with a comprehensive action plan to prevent money laundering. 

As part of the action plan, the government will conduct a study to find out the amount of laundered money, how and to which countries those funds have been smuggled out. 

The government will also conduct a study to find out the citizens who have investment visa, second home, long-stay visa and dual citizenship, and how much money they have transferred to get such visa. The study will be conducted by December this year.

Another study will be conducted by December to find out the number of foreign employees working in Bangladesh, and how they are remitting funds to their home countries. 

How the advertisement costs in foreign media are being paid, and how the payments of e-commerce sites are being made will also be scrutinised.

Instances of loan-related corruption, and quick writing off of loans will also be analysed to find out if money is being smuggled in this way. 

As the trade-based laundering is rising at an alarming rate, the government has also taken up an initiative to develop a database in all commercial banks to be confirm about competitive prices of imported and exported goods. 

The deadline for developing the database is December this year.

The strategy report also pointed out that apart from trade-based money laundering, money is being smuggled to countries widely known as tax havens to conceal the sources of proceeds of criminal activities. 

Moreover, multinational companies undertake transfer pricing mechanism to avoid tax or revenue or transfer their profit, said the report. 

Referring to several case studies of trade-based money laundering, the report said that illicit outflow of money from Bangladesh is done through over-invoicing of low-taxed imported goods and services, such as capital machinery, raw materials, computer accessories, software, industrial design, factory installation etc.  

Manipulating description of the imported products or even without importing products payment is made against documents, the report said. 

The lack of access to beneficial ownership information of companies by law enforcement and other relevant authorities is a major impediment. The Companies Act 1994 does not provide the required powers to the Register of Joint Stock Companies for monitoring and supervision of company ownership effectively.

Therefore, the government has decided to amend the company act by December this year to further empower the Register of Joint Stock Companies. 

The finance minister said Bangladesh is under a serious threat of money laundering. He, however, pointed out that Bangladesh alone cannot prevent money laundering, and that the whole world will have to be united for this purpose. 

Mentioning that money laundering is mostly taking place through foreign trade, he said the government is going for full automation to stop over- and under-invoicing in foreign trade. 

Anti-Corruption Commission Chairman Iqbal Mahmood told the seminar that since 2016, his organisation has frozen 165 bank accounts having deposits of $26 million or around Tk221 crore in connection with corruption.

The commission also confiscated 28 buildings and houses, 24 apartments, 77 acres of land, five so-called luxurious vehicles during the period. 

Sharing his own experience, State Minister for Foreign Affairs Shahriar Alam said some Bangladeshis living in a western country were sending money for religious extremists. The Bangladesh government informed the government of that particular country of the matter, but they did not pay any heed to that.

Now that country is also grappling with terrorism, Shahriar Alam said, adding combined efforts are needed to stop money laundering. 

He also said some Bangladeshis living in Singapore were also found sending money to terrorist activists in Bangladesh. When the government informed the Singapore administration of this, they immediately took action to stop laundering of money to Bangladesh. 

Finance Minister AHM Mustafa Kamal attended the seminar as chief guest, while Bangladesh Bank Governor Fazle Kabir moderated the session.