Preventing Trade-based Money Laundering

Banks get more time to implement guidelines

Staff Correspondent

9 March, 2021 12:00 AM printer

Bangladesh Financial Intelligence Unit (BFIU) of Bangladesh Bank has extended the deadline until June 30 next for banks to implement the “Guidelines for Prevention of Trade-Based Money Laundering" considering the Covid-19 pandemic.

A circular signed by central bank General Manager (BFIU) Md Zakir Hossain Chowdhury was sent to the top executives of all the scheduled banks on Monday in this regard.

According to the circular, the decision was taken after several banks sought time in a recent meeting between the BFIU held and senior officials of all banks and following the coronavirus prevalence.

Issuing a circular in December 2019, the BIFU asked all banks to implement the guidelines/manuals by June 1, 2020.

Later, it extended the deadline until November 1, 2020.

However, a number of banks have achieved little progress in executing the guidelines amid the pandemic.

Criminals change their strategy off and on to divert attention of law enforcement agencies to launder money and finance terrorism. Unless and until society gets affected intensely, it rarely responds.

Likewise, trade-based money laundering drew attention of global bodies not long ago. Only in 2006, the Financial Action Task Force (FATF) recognised trade-based money laundering as one of the major methods by which criminal organisations and terrorist financiers move money for the purpose of disguising its origins and integrating it back into the formal economy.

The term ‘trade-based money laundering and terrorist financing’ refers to the process of disguising the proceeds of crime and moving value through the use of trade transactions in an attempt to legitimise their illegal origins or finance their activities.

Like many countries, Bangladesh is also affected by trade-based money laundering and ensuing illicit outflow.

Against such a backdrop, the BIFU issued the circular on December 10, 2019 asking all banks to implement the guidelines to combat trade-based money laundering.