I have the honor to share that we have prepared this project on financial criminology issues and overview of money laundering in Bangladesh perspective. I, Sania Anjuman Nuri, hereby declare that the project report entitled “Financial Criminology: Issue of Money Laundering in Bangladesh Perspective” submitted by me to United International University in partial fulfillment of the requirement for the award of the degree of Bachelor in Business Administration in School of Business and Economics is a report of project work carried out by me under the guidance of Mohammad Tariq Hasan, Assistant Professor (Accounting), SoBE, United International University. And how much knowledge I can use, from my advisor Mohammad Tariq Hasan, to find the consistency in the investigative knowledge about crimes and what business organizations actually face, helps me prepare this report on “Financial Criminology: Issue of Money Laundering of Money in Bangladesh Perspective”.
Background of the Study
Financial Criminology
Money Laundering
Most men, women and children are trafficked for forced labor and forced prostitution. Apart from smugglers and criminals, most of the time militants also use this route to get illegal arms and explosives. And also finds that most of the corruption took place in the public sector.
Statement of the Problem
Research objectives and questions
These institutions are affected by money laundering, and customer confidence is also affected, which is interrelated with the financial activities shown by workers in the financial sector or the government. Money laundering that fuels crimes such as domestic corruption that leads to sustained economic growth.
Motivation of the Study
Risk assessments are identified from national AML/CFT strategies 2015-17, which include CT priorities, but corruption-related AML remains the largest area of unqualified risk. BFIU improvement is needed in the quality and quantity of reporting in the BFIU, although the quality of the BFIU was generally good.
Scope and limitation of the study
Literature Review
Industry Analysis
This money laundering case involves 16 Crescent Group employees and 13 bank officials. [ CITATION Tk919 \l 1033. Prior to this, five more cases indicted against the same person for stockpiling gold ornaments by "smuggling and tax evasion" under the Customs Act of 1969. [ CITATION Apa17 \l 1033. 1,207 branches, including 343, located in urban areas, 862 are in rural areas, and 2 are located abroad to make foreign exchange transfers smoother.
36.48 billion (US$460 million) was illegally distributed by state-owned Sonali Bank's Ruposhi Bangla Hotel branch, a report revealed by the Bangladesh bank. About $101 million was stolen from Bangladesh's foreign exchange reserves on February 4 from an account at the Federal Reserve in New York. It is still not known where he took the money from and where it ended up.
In history, this robbery became one of the biggest bank robberies in Bangladesh. But this is not the first time that about $10 million has disappeared from Bangladesh Bank due to a high-flying cyber scam. Motijheel Farmers Bank branch gave around TK 367 as loan to 10 companies in November 2013 and it became defaulted in 2017.
NAR Sweaters Ltd, Advanced Development Technologies, Abeda Memorial Hospital, Index Housing, Al-Faruque Bags, Nahar Farmers Group, Apollo Trade International, Mollik Aquaculture Farm, Messers Premjoy, Mac Trading and Bangladesh Development Company.
Literature Survey
- Analytical report on money laundering about developed countries
- Analytical report on money laundering about developing countries
- Problems in Financial Sector in Bangladesh
- Risks that are associated with Financial Institutions in Bangladesh
- Money Laundering Risk Indicators in Bangladesh
In Switzerland, questions arise because most people know how to avoid the problems of money laundering by Swiss bankers and other company professionals. In 2020, FINMA banned one of the largest Swiss private banks for failing to combat money laundering between 2009 and 2018. Chile uses as a base for money laundering operations, which is about to increase 33%, reported by Chilean officials in 2012.
Criminals sponsor people in a disguised way so that they can encourage money laundering. Most money laundering cases occur from Kabul International Airport, Herat Airport and other channels from abroad that can harm the Afghan economy. According to the State Department, Mexico's financial system faces billions of dollars of money laundering every year.
Most money laundering cases continue to fail due to regulatory deficiencies, institutional weakness and corruption. Extensive networks of Chinese nationals involved in money laundering are exposed by Europol's operation. The total amount of money laundering corresponds to the entire gross national product of the country in 2017.
Big data analysis violates principles of privacy, sometimes it is used for money laundering for manipulation of customer records. This data includes misinformation or duplicate data that misleads authorities into finding the original source of money laundering. There are some factors that suggest that money laundering cases can occur in any country.
Theoretical Framework of Financial Criminology in Bangladesh
Causes of Money Laundering in Bangladesh
Using legal frameworks or tools to reduce the tax burden is known as tax avoidance or evasion. Black money and illegal transfer of funds or capital outflows from the country are generated by tax evasion. An advantage of indirect taxation is that it is easy to collect tax and it is difficult for taxpayers to avoid tax.
At the same time, the disadvantage of this procedure is that it also increases the scope of tax evasion. This means that most bank depositors do not have a TIN and do not have to pay tax returns, but they pay a higher rate (15%) of tax to the state. [ CITATION Dhi18 \l 1033. Informal employment is a combination of the informal nature of individual work and employment in the informal sector is defined by BBS.
Informal employment has a detrimental effect, that is, this employment is not protected by law, which makes it vulnerable to .. various forms of abuse and manipulation. Informal activities can lead to serious tax revenue constraints as most need a stable tax base in Bangladesh. Sometimes criminals use a head load or cycle rickshaw to transport illegal money or goods, which is known as
There is another type of smuggling and it is known as "technical smuggling" means the trade of larger amounts of money or goods mainly using trucks, let it follow legal channels.
Effects of Money Laundering in Bangladesh
Cleaning of dirty money criminals are mostly used TBML method and increasingly important channel for money laundering. Through fraudulent means, Bangladesh's economy suffers badly as thousands of crores of taka are smuggled out of the country. There are negative impacts on a workplace, including the country's economic effects on profitability and systematic consequences on worker morale due to reduction in productivity.
The country's trade and international capital flows can bias a developing country due to incessant money laundering. Money laundering can also be associated with significant distortions of a developing country's imports and exports. The economic effects are on a wider scale because developing countries often bear the brunt of modern money laundering because the government is still in the process of establishing regulations for their newly privatized financial sectors, which makes the government a prime target.
Money laundering has the power to have potentially devastating economic, security and social consequences. In the case of over-invoicing, there are two losses that Bangladesh faces: one is money laundering and another one is corporate tax avoidance. But if the motive is money transfer abroad, overpricing can be independent of the above taxes and duties.
The Gini coefficient, which represents the income or wealth distribution of a country's residents and is the most commonly used measure of inequality, will increase if a small portion of society controls a significant portion of the economy's money .
Solutions for Reduce Money Laundering in Bangladesh
There are some negative effects of inflation, namely: International competitiveness can be eroded. The cost of exporting goods from abroad may be higher and may also result in a decrease in export demand. After remaining different anti-money laundering rules and regulations, Bangladesh is facing money laundering problems due to lack of political transparency and inadequate coordination with different types of authorities.
In this case, BFIU can apply new and unique strategy so that they can easily tackle the money laundering and terrorism financing issues. For Bangladesh, each bank and other financial institutions can make the best payment control system, or they can make a unit that reports on every kind of financial transactions. There are some benefits of clear and effective internal mechanisms, these are: public signal commitment to integrity and social commitment, prevention and mitigation of liability, prevention of financial losses, continuous improvement in compliance risk management, strong reputation and improvement of organizational culture.
Ethics serves as a guide for everyday moral life and helps us judge whether our behavior can be defensible or not. The internal audit system helps an organization meet its objectives by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of risk management, control and governance processes. Internal audit control determines the nature, timing and scope of internal audit procedures in direct relation to the level of risk, develops a plan for conducting internal audit projects in risk areas to minimize the risk of loss for the company.
This means that all banks and other financial institutions in Bangladesh can assess every 5 years.
Research Methodology
Data Collection
Findings and Analysis of the Study
Descriptive Analysis
Conclusion and Recommendation
Conclusion
Recommendations
Banks and financial institutions can hire a financial analyst to work as a shadow recruiter who can help uncover suspicious sources, transactions and people involved in financial crimes. Bangladeshi banks or financial institutes can use international instruments that can prevent financial crimes and money laundering fraud.
Suggestions for Future Research
