Concerns mount over Bangladesh

March 19, 2012

FATF, the world’s leading international watchdog for money laundering, terror funding, and financial standard setting, is concerned that Bangladesh hasn’t done enough to criminalize terrorist financing, and isn’t freezing suspect accounts.

FATF is rightly concerned.  Just take Islami Bank Bangladesh Limited as an example.  IBBL is Bangladesh’s premier sharia bank, and it has used its wealth to fund jihad militants, according to intelligence from Bangladesh’s own interior ministry.  Naturally, a sharia bank that funds terrorism isn’t going to freeze the accounts, or even screen the accounts, of terrorist customers. 

(By the way, IBBL is currently attempting to push farmers into loans that they may not need.  Predatory lending by sharia banks should be condemned as vigorously as predatory lending by conventional banks.)

From Gulf Times on Mar. 4:

Dhaka urged to curb terror financing

By Mizan Rahman

Dhaka—The Financial Action Task Force (FATF), a global body to combat money laundering and terror financing, has asked Bangladesh to freeze terrorist assets and confiscate funds relating to money laundering.

A senior official in the finance ministry said yesterday that Bangladesh might see its place coming down in the global scenario from the current ‘grey list’ to the ‘black list’ if the government failed to implement the action plan of FATF on money laundering by June.

The warning from FATF and its action plan was conveyed to Bangladesh from a recent plenary meeting of the task force, held in Paris in mid-February.

Bangladesh Bank (BB) Deputy Governor Abu Hena Mohammed Razee Hassan led a four-member delegation to the meeting.

“The meeting was a groundbreaking one as it lauded Bangladesh for several steps to combat money laundering and for scrapping the fiscal measure allowing black money in share business,” a delegation member said.

“The FATF has asked us to implement a large number of measures to combat terror financing and money laundering at the earliest possible to avert a possible degradation of our global status from ‘grey list’ to ‘black list,” he added.

According to the action plan, Bangladesh has been asked to adequately criminalise money laundering and terrorist financing, establish and implement adequate procedures to identify and freeze terrorist assets, implement adequate procedures for confiscation of funds related to money laundering, ensure a fully operational and effectively functioning financial intelligence unit, improve suspicious transaction reporting requirements, improve international co-operation in money laundering and issue guidance to capital market intermediaries to effectively extend the anti-money laundering obligations.

The FATF is an inter-governmental body, the purpose of which is to develop and promote policies, both on national and international levels, to combat money laundering and terror financing.

The task force is a ‘policy making body’ which works to generate the necessary political will to bring about national legislative and regulatory reforms.

Earlier, the FATF in a report in 2010, said Bangladesh was still non-compliant in at least 10 key areas in attaining the international standard in the sector of money laundering and terror financing.

The government had formed a national co-ordination council, headed by Finance Minister A M A Muhith, to implement the recommendations of FATF.

A ministry of finance official said a joint effort by ministries of finance and home and central bank is needed to implement the action plan.

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