Thursday, September 21, 2017 | ePaper

Dead fish across the trial : The money laundering methods in Bangladesh

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Kazi Mokhles Uddin Ahmed :

1. In 2012 International Narcotics Control Strategy Report (INCSR)1 the mark of Bangladesh is in "major money laundering countries" that are in the "Countries/ Jurisdictions of Concern" category are identified and require the country's most attention. Identification as a "major money laundering country" is based on whether the country or jurisdiction's financial institutions engage in transactions involving significant amounts of proceeds from serious crime. Bangladesh as a country or jurisdiction's legal framework to combat money laundering: its role in the terrorist financing problem; or the degree of its cooperation in the international fight against money laundering, including terrorist financing are still in a vulnerable state. These factors, however, are included among the vulnerability factors when deciding whether to place a country or jurisdiction in the international society in relation to cross border business and investment friendly environment put in the question.
Money Laundering
2. In, lay terms  Money Laundering is most often described as the "turning of dirty or black money into clean or white money", If undertaken successfully, money
laundering allows criminals to legitimize "dirty" money by mingling it with "clean" money, ultimately providing a legitimate cover for the source of their illegitimate income. Generally, the act of conversion and concealment is considered crucial to the laundering process.
3. In the Black's Law Dictionary money laundering defines as the act of transferring illegally obtained money through legitimate people or accounts so that its original source cannot be traced.ii In USA Money laundering is a federal crime.iii It is also addressed by state governments through the Uniform Money Services Activ because some money laundering is concluded across national borders, enforcement of money laundering laws often requires international cooperation fostered by organizations such as Interpol.
4. A concise working definition was adopted by Interpol General Secretariat Assembly in 1995, which defines money laundering as: "Any act or attempted act or conceal or disguise the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources". Furthermore, the Joint Money Laundering Sterling Group (JMLSG) of the UK defines it as "the process whereby criminals attempt to hide and disguise the true origin and ownership of the proceeds of their criminal activities, thereby avoiding prosecutions, conviction and confiscation of their criminal funds".
5. A statutory definition of what constitutes the offence of money laundering under Bangladesh law is set out in Section 2 (V) of the Money Laundering Prevention Act, 2012 which is read as follows: "Money Laundering" means - (i) knowingly moving, converting, or transferring property involved in an offence for the following purposes:(1) concealing or disguising the illicit nature, source, location, ownership or control of the proceeds of crime: or (2) assisting any person involved in the commission of the predicate offence to evade the legal consequences of such offence; (ii) smuggling money or property earned through legal or . illegal means to a foreign country; (iii) knowingly transferring or remitting the proceeds of crime to a foreign country or remitting or bringing them into Bangladesh from a foreign country with the intention of hiding or disguising its illegal source; or (iv) concluding or attempting to conclude financial transactions in such a manner so as to reporting requirement under this Act may be avoided; (v) converting or moving or transferring property with the intention to instigate or assist for committing a predicate offence; (vi) acquiring, possessing or using any property, knowing that such property is the proceeds of a predicate offence; (vii) performing such activities so as to the illegal source of the proceeds of crime may be concealed or disguised; (viii) participating in, associating with, conspiring, attempting, abetting, instigate or counsel to commit any offences mentioned above.
6. However, an Indian court in Kalcilda Wallang vs U Lokendra Suiam stated that a few disconnected and isolated transactions would not make the plaintiff a person engaged regularly in money laundering business.
Practice and Procedure of Money Laundering in Bangladesh
7. The recent incident of the darkest misuse of the banking system of Bangladesh is the supreme example of money laundering in the history of Bangladesh financial sector. The central bank (Bangladesh Bank) has failed to monitor the state-owned banks who lost several thousand crores in forgeries due to errant directors appointed on political consideration by the government. Sonali Bank Limited faced forgery cases of more than Taka 3,600 crores by Hallmark Group in 2012. BASIC Bank, another scam-hit government bank distributed loans of more than Taka. 5,000 crore violating rules.
8. The method of trial proceeding of the offence of money laundering according to Section 9 of the Money Launde-ring Prevention Act, 2012 states the method of investigation and trial of an offence. Section V of the Money Laundering Prevention Act, 2012 as follows:
"9. Investigation and trial of an offence (1) Notwithstanding anything contained in any other law, the offence under this Act shall be considered as the scheduled offences under the Anti-Corruption Commission Act, 2004 (Act No. V of 2004) and shall be investigated by the Anti-Corruption Commission or any officer of the Commission' empowered by it in this behalf or any officer of any of her investigating agency authorized by the Anti-Corruption Commission.
(2) The offence under this Act shall be tried by a special judge appointed under Section 3 of the Criminal Law Amendment Act, 1958 (Act No. XL of 1958).
(3) For the purpose of the investigation and identification of" property of an accused person. the Anti-Corruption Commission may, besides this Act, 2004 (Act No. V of 2004) and an officer of any other investigating agency authorized by the Anti-Corruption Commission may, besides this Act, also exercise the powers vested in it under the AntiCorruption Commission Act, 2004 and an officer of any other investigating agency authorized by the Anti-Corruption Commission may, beside this Act, also exercise the powers vested in it under any other law.
9. In compliance to the Section 3 of the Criminal Law Amendment Act, 1958 Government appointed special judge to deal with the money laundering crime. However, the procedural backlog and drawbacks making the process lengthy and complicated. The institution of suit, investigation operated by the sole authority of the Anti-Corruption Commission or by their authorised agency or person makes the process delayed.
10. From 2011-2013 disposals and convictions of corruption cases by Special Judges Court in Dhaka and outside Dhaka is not satisfactory as till the year total disposed of are 200 plus whereas convicted only are 80 approx. the complexity of suit instituting procedure and not-friendly environment bars the small and medium value claims throughout the country. There are number of offence of money laundering committed through hundi and intermediary companies which did not come across the justice process of Bangladesh as the practice and procedure is not simplified.
11. In Anti-Corruption Commission vs Unipay 2U Bangladesh Ltd, XI Justice Md Reazul Haque stated that Money Laundering is deemed as a financially based crime. It has potentially devastating economic security and social consequences. From the first information report and charge-sheet it cannot be said that no prima-facie case could be detected against the accused persons.
12. Furthermore, the offence of Money Laundering closely works with criminal jurisdiction. Justice Salma Masud Chowdhury in MD Unipay 2U (BD) Limited vs State stated that the money laundering nature of the crime needs to be examined by the trial court. In her judgment it stated from the perusal of the definition of Money Laundering and the predicate offence it also appears that the matter need to be examined by the trial Court on examination of evidence to reach a decision whether the allegation as brought against the Petitioner is under Money Laundering Prevention Act or not which is not the function of this court under Section 561A of the Code of Criminal Procedure. The disputed matters as presented before us are to be resolved by the trial Court, on hearing the parties and on examination of evidence produced before the Court.
13. To combat and protect the offence of money laundering Section 24 of the Money Laundering Prevention Act, 2012 empowers Bangladesh Bank to establish a separate unit to be called the Bangladesh Financial Intelligence Unit (BFIU) within Bangladesh Bank. Bangladesh Financial Intelligence Unit (BFIU) is the central agency of Bangladesh responsible for analyzing suspicious Transaction Reports (STRs), Cash Transaction Reports (CTRs) & information related to money laundering (ML)/financing of terrorism (TF) received from reporting agencies & other sources and disseminating information/ intelligence thereon to relevant Jaw enforcement agencies. BFIU has been entrusted with the responsibility of exchanging information related to money laundering and terrorist financing with its foreign counterparts. The main objective of the BFIU is to establish an effective system for prevention of money laundering, combating financing of terrorism and proliferation of weapons of mass destruction.
14. BFIU was established in June 2002, in Bangladesh Bank (Central bank of Bangladesh) named as 'Anti Money Laundering Department'. To enforce and ensure the operational independence of FIU, Anti Money Laundering Department has been transformed as the Bangladesh Financial Intelligence Unit (BFIU) in 25 January, 20 12 and has been bestowed with operational independence. BFIU has also achieved the membership of Egmont Group in July, 2013.
15. There are many ways to launder proceeds of crime, methods only limited by the creativity of criminals. While investigators should have a range of potential methods in mind in order to consider the' possibilities, they should not get fixated on the idea that certain methods must be used. The more sophisticated money laundering schemes will often employ not just one of the features referred but rather multiple features. The only certainty is that, to use the metaphor quoted earlier, dead-fish will be dragged across the trail as a means of attempting to deceive the financial investigator as to where the criminal proceeds have gone and as to where money at the disposal of the defendant has come from.
The money laundering methods involved in a particular case will tend to be determined by a number of factors; ie a) The amount of money which requires to be laundered.
The larger the turnover from a criminal enterprise, the greater the need there will be for a more efficient laundering service. This increases the likelihood of corporate entities being necessary, b) The sophistication of the criminal enterprise, where a group has an organised structure with differentiated roles, it is more likely that the laundering will be overseen by someone not involved in the underlying crime, c) The ability to
travel to another jurisdiction to make financial arrangements. d) The network of trusted relationships available to the person with criminal proceeds and e). The type of crime which has been committed where the crime is capable of being committed by an individual alone, the laundering may simply be performed by that individual or by his family. and friends.
16. Where the commission of the crime requires the resources of an organised crime group, then the laundering is likely to be done in a more complex way. The educational, professional and business background of the criminal. A criminal may consider that, given his particular background, he is equipped with the knowledge, skills. and experience to be his own launderer (in the sense of not involving other persons in knowingly assisting in the laundering process). A financial investigator with responsibility for a particular investigation should develop, and regularly update, a working hypothesis as to the money laundering methods which may be being used.
17. Bangladesh is a signatory state of the Vienna Convention and International Convention for the suppression of the Financing of Terrorism, which undoubtedly shows the nations intention to protect the financial crimes. However, the current legal framework, practice and procedure are not adequately strong enough to combat with financial crimes. The author does not purport to provide a comprehensive account of how money laundering is performed. It merely uses examples from case law as illustrations of how it has been attempted in the past. It is a nation's interest to formulate a simplified process to combat offence of money laundering by way of strengthening the authorized institutions.

(Currently works an Associate, Imperidus Law Associate and Faculty of Bangladesh University of Professionals, Barrister-at-Law (Middle Temple), UK ; Advocate, Bangladesh ; LLM (Commercial and E-Commerce Law). University of Heartfordshire. UK ; LLB (Honours), University of London, UK ; LLB (Honours) & LLM, University of Rajshahi, Bangladesh. You can reach author at

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