Incidents of money laundering through hundi persist despite extensive government oversight and ongoing crackdown efforts, with various major institutions becoming increasingly involved in the illicit practice, employing various tactics to evade detection.
The disappointing news is that in some cases, investigative officers have filed charges in court with evidence in criminal cases. The court has also given verdicts against the offenders. However, these skilled criminals are undermining the economic backbone of the country with various tactics.
Md Jahurul Haque, Commissioner of the Anti-Corruption Commission, said to Bangladesh Pratidin, "Corrupt individuals are very powerful, but not above the law. They hire top lawyers and delay cases in higher courts."
He further stated, "In cases of money laundering, we have a success rate of around ninety percent. Although there may be some delays in filing cases, we will continue to work within the bounds of the law. When we win cases in court, the country wins. Our fight against corruption will continue, and corruption will not be spared, not even in the future."
According to officials, based on the information available, the highest amount of money laundering from Bangladesh occurs in London, followed by Dubai and Malaysia. However, they believe that coordinated efforts are urgently needed to combat money laundering. They suggest that all relevant organizations should work together under a unified unit dedicated to anti-money laundering efforts for success.
Economists argue that to overcome the dollar crisis and tackle the issue effectively, a zero tolerance policy should be enforced against smuggling or money laundering. Closing loopholes will stabilize the country's dollar market. For this, it's important to bring those involved in money laundering to justice rather than relying on minor fines. Establishing precedents in court is essential.
The Crime Investigation Department (CID) of the police has revealed that money laundering is taking place across the country through various mobile financial service (MFS). More than 5,000 agents involved in the hundi (informal money transfer) business have been identified. From July 2021 to July 2022, hundi operators have successfully smuggled around 7.8 billion dollars, which is equivalent to 75,000 crore Bangladeshi taka.
According to CID sources, organized hundi operations involve collecting foreign currency earned by Bangladeshis living abroad and converting it into local currency without sending it back to the country. The culprits operate in three groups:
The first group operates abroad and collects foreign currency from expatriates, providing it to those in Bangladesh who want to engage in money laundering.
The second group includes money launderers and their associates in Bangladesh who receive the foreign currency and provide it to the MFS agents in local currency.
The third group consists of MFS agents in Bangladesh who receive the foreign currency from those residing abroad and convert it into local currency using unlawful means.
These networks continuously exploit the MFSs to facilitate the illegal transfer of billions of dollars. With the assistance of MFS agents, smugglers also engage in various illegal activities abroad, including online gambling, drug trafficking, gold smuggling, and arms dealing.
A senior CID officer mentioned that out of the 16 individuals arrested in September last year, all were involved with the MFS. Before their arrest, they had managed to smuggle 200 million taka within just four months.
Experts in criminal law argue that the complex issues associated with money laundering cases include legal complications, lengthy investigations, delays in court due to defense tactics, lack of coordination, and adjournments in higher courts. However, they emphasize the need for a "zero tolerance" approach to curb money laundering effectively. Offenders should be treated as criminals, and if necessary, a separate tribunal for money laundering cases should be established to expedite legal proceedings.
According to sources related to the ACC, as of next April, there have been a total of 117 cases related to money laundering. Among these, investigations are ongoing for 83 cases. Chargesheets have been filed for 32 cases, and final reports have been submitted for two cases. In the 83 cases under investigation, 11 suspects have been arrested. There are thousands of allegations yet to be investigated.
In accordance with information from the court sources, in the past 20 years, 752 cases related to anti-money laundering laws have been filed. Among these, investigation reports have been filed for 397 cases. Investigation is ongoing for 355 cases, and final reports have been submitted for 10 cases. In the courts of Dhaka, 56 cases have received verdicts, with 44 cases resulting in convictions.
According to Md Khurshid Alam Khan, a senior lawyer at the ACC, told Bangladesh Pratidin, the main problem lies in the difficulty of gathering evidence. It is often easy to detect and understand money laundering activities, but proving them in court can be quite challenging. The success rate in concluding money laundering cases and obtaining convictions is much higher in cases handled by the ACC compared to those under the jurisdiction of the CID. There are many ongoing investigations and fewer cases concluded by CID.
Khurshid Alam Khan points out that one of the reasons for the lower success rate in CID cases is the absence of their own prosecution wing. He has suggested several times that CID should establish its own prosecution wing for handling money laundering cases, but this has not yet been implemented.
He further mentions that both CID and the customs authorities have jurisdiction over some money laundering cases. Customs authorities primarily deal with cases related to trade-based money laundering, including incidents of under-invoicing and over-invoicing. These cases are investigated and prosecuted by customs and the Anti-Money Laundering Wing (AMLW).
However, Mr. Khurshid Alam Khan believes that customs authorities lack the capacity to handle such cases effectively, and they often transfer these cases to other agencies like the Bangladesh Financial Intelligence Unit (BFIU), ACC, or the CID. He suggests that if customs authorities collaborate with agencies like CID, the overall effectiveness in prosecuting money laundering cases would significantly improve.
Dr. Salehuddin Ahmed, former Governor of the Bangladesh Bank, told Bangladesh Pratidin that to solve the dollar crisis and combat money laundering effectively, Bangladesh should adopt a "zero tolerance" approach towards hundi.
He emphasizes the need to crack down on hundi operators who facilitate illegal remittances and advises that banks should actively engage with expatriates through their agents abroad to collect remittances.
Dr. Salehuddin Ahmed believes that if the agents of banks go to the expatriates (similar to how hundi operators operate), they can collect foreign currency, which will then be legally remitted to Bangladesh.
He points out that many expatriates do not have proper access to remittance services, and the existing services do not adequately cater to their needs. Expatriates often have to travel long distances to remit money, which can be a cumbersome process. Dr. Salehuddin Ahmed suggests that improving remittance services and offering better rates would encourage expatriates to use legal channels for sending money to Bangladesh.
Additionally, he mentions that strict control and regulation should be in place to ensure that hundi operations are minimized. Customized solutions and competitive rates for remittances can help divert funds away from hundi operators. Dr. Salehuddin Ahmed emphasizes that controlling hundi operations and promoting legal remittances should be a priority to address the dollar crisis effectively.
@ The article was published on print and online versions of The Bangladesh Pratidin on September 6, 2023, and has been rewritten in English by Tanvir Raihan.
