The government is going to bring five major channels including the banking sector under strict monitoring in order to intercept capital flight, sources said.
The National Coordination Committee for Preventing Money Laundering and Terror Finance has taken this decision at its last meeting held recently. If the decision is implemented, profit remitting by mobile operator companies, rental of foreign ships, remitting of salaries of foreign nationals working here, under and over invoicing, and land registration will be monitored to scrutinize the compliance and transparency.
As per the decision, cases will be filed after speedy investigation in connection with money laundering incidents. The committee also decided to take necessary measures against those who illegally remit money abroad through opening fake Letter of Credit (LC) in banks in the name of import, sources said.
Finance Minister AHM Mustafa Kamal recently said that there are two major ways of capital flight -- one is through the banking channel and the other is in the guise of export-import.
Meanwhile, the National Board of Revenue is setting up modern scanner machines in the country’s all ports and will form a specialized cell to ban under invoicing and over invoicing of goods. The 23rd meeting of the national coordination committee was held recently, where Bangladesh Bank Governor Fazle Kabir, NBR Chairman Mosharraf Hossain Bhuiyan, Member Secretary of the committee and Senior Secretary of Financial Institution Division Asadul Islam, and Secretary of Finance Division Abdur Rouf Talukder were present, among others.
According to the meeting sources, the meeting discussed about the possible ways of money laundering and its preventive measures. Apart from this, the government has also been adopting alternative strategies to discourage capital flights. Prime Minister Sheikh Hasina on June 14 in the post-budget press conference told journalists that the government in the proposed budget for fiscal 2019-20 kept the provision for whitening black money through investing it in different business and commercial sectors.
“There are many people who have huge stock of black money and we do not know where they have kept it. Such type of illegal money in general is remitted abroad as they do not have scope to make it visual in the country,” she said. “That is why we have given them the chance to whiten this money through investing it into the country’s trade and commercial sectors in a proper manner,” she said. However, amid the government’s several anti-money laundering moves in the last few years, Bangladeshi nationals’ deposits in the Swiss banks have kept rising.
According to the annual report of Swiss National Bank unveiled two days ago, Bangladeshi nationals deposited a total of Tk 1,274 crore to Swiss Banks in 2018 only. The deposited figure is the highest in a single year as Bangladeshis did not deposit such a big amount in these banks in any past year. According to the annual report, the total deposits of Bangladeshi nationals in Swiss banks as of December 2018 stood at Tk 5,343 crore which was Tk 4053 crore in December 2017. According to this count, the deposit increased by Tk 1,274 crore in a single year.
The Bangladeshi currency is illegally remitted through different channels. Of the amount, a substantial amount is deposited to Swiss banks. Economists said over invoicing a pioneer way of capital flight from Bangladesh to European destinations. Miscreants remit the currency to these countries through Hundi, fabricated business information and over invoicing, they said.
Unscrupulous businesses, personnel involved in export-import procedures, and even some officials of banks and customs departments are the main ringleader of the capital flight syndicate. Financial Market Supervisory Authority (FMSA), and Swiss National Bank are the regulatory bodies that monitor all the activities of banks and financial institutions in Switzerland.
All these banks and financial institutions together under these two regulatory bodies are known as Swiss Bank. Currently, more than 300 banks are in operation in Switzerland. Switzerland is the best country to deposit all types of currency, as the banks of the country keep the information of depositors very confidential. That is why the illegal earnings and tax dodging money are mostly deposited to the banks of the country.
However, the Swiss government changed its policy in 2017 and started announcing the country-base deposits. Due to this reason, the overall deposits to Swiss banks are waning though it is still the first choice for Bangladeshi wealthier people to deposit their illegal money here.