THE main challenge for the interim government in rebuilding the economy is to bring back the money laundered during the authoritarian Awami League regime toppled on August 5. The economic crisis, especially the dollar shortage, has largely been due to an unabated capital flight. A statement of the chief adviser鈥檚 office on August 31 said preliminary estimates suggest that the total amount of money embezzled could exceed Tk 1 lakh crore. In April, the World Bank reported that around $3.15 billion outflows from Bangladesh occured annually through illegal offshore accounts. A 2021 Global Financial Integrity report says that $61.6 billion was smuggled out of Bangladesh in 2005鈥�2014, and Bangladesh lost $8.27 billion annually because of trade mis-invoicing. The Financial Intelligence Unit in the 2023 annual report also says that money is siphoned off mostly through trade and over-invoicing and it finds 20鈥�200 per cent over-invoicing in some cases. The Financial Intelligence Unit prepared lists of money launderers, reported a significantly high number of suspicious transactions involving capital flight but did very little to hold the perpetrators to account or to recover the money in the past decade. In this context, it is assuring that the interim government considers the recovery of the money laundered and international agencies have expressed interest in helping the government in this regard.
The government has already taken a number of steps to prevent capital flight and recover the laundered money. The National Coordination Committee on Anti-Money Laundering on August 14 said the finance adviser directed authorities to speed up anti-money laundering activities without fear or favour. As part of the efforts, some of the bank accounts of suspected money launderers have been frozen. The head of the committee meant to prepare a white paper on the state of the economy has, however, termed the process of recovering laundered money or identifying assets purchased with laundered money a complex process. It involves massive diplomatic engagement to investigate suspicious cross-border financial transactions and negotiate with host and destination countries. Once the siphoned off money is located, legal action can be taken in the host country and only after securing a decree from the host country can the money or property purchased with laundered money be frozen and sold to repatriate the fund. The decision to work with the US Federal Bureau of Investigation is, therefore, promising. It is also heartening to see that the United Nations Office on Drugs and Crime has offered support for the Anti-Corruption Commission in this regard. Transparency International Bangladesh and other anti-graft bodies urged the United States, the United Kingdom, Switzerland, the European Union, Australia, Singapore, Malaysia, Hong Kong, and the United Arab Emirates to hold the money smugglers accountable and help Bangladesh鈥檚 interim government to repatriate the smuggled money.
It is assuring that the interim government has made laundered money recovery a priority, but to expedite the process, it must improve its expertise considering the complex transnational legal process that involves repatriation of funds.
