by Mohammad Rubaiyat Rahman
Money Laundering is deemed as a finance-based crime that buckles down to conceal, misrepresent and disguise all the details with regard to illegal financial income. In money laundering, the transfer of currency generally takes place outside the conventional banking system in tandem with the unregulated, undocumented as well as illegal businesses. In some parts of South Asia, i.e. in Bangladesh, India and Pakistan, money laundering is known as ‘hawala’ or ‘hundi’. Among the Sri Lankan Tamils, this informal money transfer is commonly familiar as ‘undyial’, the literal meaning of which is ‘piggy banking’.
Article 1 of the European Communities (EC) Directive of March 1990 defines this egregious crime as: ‘the conversion or transfer of property, knowing that such property is derived from serious crime, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in committing such an offence or offences to evade the legal consequences of his action, and the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from serious crime.’
During the 1960s, the vice of laundering was limited to the dictators and panjandrum bureaucrats of the least developed countries that got sovereignty from colonialism. During 1980s, the drug traffickers of Asia and Latin American used it to shroud their illegal monetary gains. Later on, in 1990s the booming influx of economic migrants to developed western states accelerated the scourge of money laundering to everywhere, from up hill to down dale. At the present time the trends of money laundering no longer encompassed dictators, drug traffickers and economic migrants only; rather, corrupt politicians, human traffickers as well as terrorists are using this as a conduit to converse their black money.
Due to the present globalized hi tech vibe in the orb of financial sector, money laundering becomes a truly worldwide industry. Money laundering has devastating economic, security, and social consequences. The developing states, which are used as pivotal conduit for laundered money, are always deemed within the ace of devastating impact. Money launderers are seen to concentrate to those developing countries where financial regulations are tussling with various pitfalls. As fast as the laundered money floods into a state’s economy, its financial problems are seeping into the base of its financial infrastructure and turning it into a decrepit coliseum. The aim of money launderers is neither to invest in the country economy nor to chug through the country economy to a solid footing; rather they ail country economy by the successful cloaking of the origin and ownership of the illegal funds they control. They do it by injecting it directly or indirectly into the economy. Since they are criminals, the laundered money only facilitates the hoodlums seamlessly with access to the proceeds of bout of vices. These proceeds can be used by the launderers to fund crimes as well as to ail the good governance. In the case of Del Agha vs Directorate of Revenue 92 (2001) DLT 762, the Court of India depicts the impact of money laundering upon a country in a very proper manner. The Court opines, it (money laundering) makes the black money handy to the subversive elements engaged in destabilizing and destroying the nation and hence poses economic threat on the country economy which is far more appalling than an armed invasion from across the border.
Bangladesh is currently strengthening its anti money laundering system. In February this year, the National Parliament approved a new bill as to the prevention of the vice of money laundering. Under the rubric of “The Money Laundering Prevention Bill-2012”, the bill is pivotal in significance. The bill not only replaces the present ‘Money Laundering Prevention Act 2009’, at once with the ‘Money Laundering Prevention Ordinance 2012’, but also aims at making an ‘up to the hilt’ law to efface the dynamic crime of money laundering that poses as a thicket upon the economy cornerstone of Bangladesh.
The newly inducted “The Money Laundering Prevention Bill-2012” is one of the steps to tussle the throw of financial terrorism. Money laundering is the life blood for terror organizations, encrusting them from behemoth thrombosis belonging to the traditional banking system. Bangladesh ratifies the UN Vienna Convention 1988 and the UN Terrorist Financing Convention. Bangladesh is a founder member of the Asia/Pacific Group on Money Laundering (APG) which is formed to ensure the adoption, implementation and enforcement of the Financial Action Task Force (FATF) recommendations for reaching universally adopted international anti-money laundering standards within Asia and the Pacific countries. In the FATF meeting, concluded on 16 February this year, the money laundering watchdog placed Bangladesh into the grey-list. Among other South-Asian countries, both Pakistan and Sri Lanka are enmeshed into the black list; while another South Asian neighbour Nepal was given a galling two months timeline to peg down the menace of money laundering and also to escape the threat of being black listed. However, in the recent plenary of FATF in Rome, Nepal has received another year, i.e until July, 2013, for buckling down to address their anti-money laundering loopholes. Nepal’s latterly ongoing political transition issues peg her down to focus on more vital issues than endorsing an up to a hilt anti-money laundering mechanism.
Updating legislation from time to time in line with the changing trends of money laundering would help to wallop the financial terrorism. In the case of Tarique Rahman vs Bangladesh 63 DLR (AD) (2011) 18, Justice Md. Muzammel Hossain opines, ‘The sole object of a repealing and amending act is to get rid of certain provisions of obsolete matter and replacing the same by subsequent amendment of an act … … since right of repeal being inherent in legislature alone.’ Hence, failing to do so would be an economic fiasco for a sovereign state. As metaphor, money laundering and financial terrorism are geographical fault lines those look like small and giddy, but chugs through deeply into the core. For that reason, the seamless viaduct of money laundering and financial terrorism is a dynamic menace which should be tackled in a tenacious and integrated fashion.
Mohammad Rubaiyat Rahman is a law graduate of University of Dhaka. He will be joining the LLM program at SAU in the Monsoon Semester 2012.
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