Transnational Threat: Bangladesh Perspective
General Aziz Ahmed
“In Bangladesh, money laundering is defined under Section 2(v) of the Money Laundering Prevention Act no 5 of 2012 that says money laundering is the process by which proceeds from a criminal activity are disguised to conceal their illicit origins to legitimize the ill-gotten gains or wealth”. Money laundering is now a grave concern for Bangladesh due to its potentially devastating economic, security, and social consequences. “The Government of Bangladesh promulgated the Money Laundering Prevention Act, 2002 with subsequent amendments in 2008 and 2012 to meet emerging international standards. The main objective of the 2012 Act is to tackle illegal money transfer to different countries. To exercise the powers, and perform the duties, vested in Bangladesh Bank, a separate unit named Bangladesh Financial Intelligence Unit (BFIU) has been established within Bangladesh Bank” (Bangladesh Money Laundering Prevention Act 2012).
BGB-BSF exchange sweets on Independence Day.
The actual figure of money laundered from Bangladesh is difficult to ascertain, and it varies amongst sources. Swiss National Bank Report says “the money laundered from Bangladesh in Swiss Bank amounts 4,064 crores in 2017, Tk. 5,575 crores in 2016 and Tk. 4,423 crores in 2015” (Swiss National Bank Report, 2017). BFIU says “the magnitude (in monetary terms) of money laundering has not yet been estimated so far by any Bangladeshi institutions. However, the United Nations of Office on Drug and Crime (UNODC) has estimated corruption worth in Bangladesh around 3% of its GDP (the current GDP of Bangladesh is $347.991 billion as per World Bank data). Another international institution, Global Financial Integrity (GFI) claims that around 55 billion USD siphoned off from Bangladesh in the last decade. The GFI also claims that 83% of such assets siphoned from Bangladesh in the disguise of Trade Payments, i.e. Trade-Based Money Laundering. In their 2019 Report, the GFI claimed that 5.9 billion USD siphoned out of Bangladesh.
he Bangladesh Financial Intelligence Unit (BFIU) analysis reveals that GFI 2019 report used two sets of data; one in Comtrade Data ( A UN data source) and another Dots Based Data (IMF data) and identified two separate results in the same 2019 report for Bangladesh. In 2019 report, using Comtrade data, reveals that net 3.5 billion USD siphoned off from Bangladesh. However, the same report, using Dots based data, reveals that there had been a net 11 billion USD inflow to Bangladesh. Therefore, the reverse results in the same report also questioned the assessment methodology of GFI. That is why BFIU does not agree with the GFI report” (Interview: Head of BFIU). On the other hand, the seized amount of money by BGB from 2016-2019 is shown below in table 3.4. This does not include the large amount of money laundered through the net banking system and also does not portray the magnitude of physical laundering across the border but only depicts the part of the laundered money that is identified and seized.
There are two kinds of laundering in Bangladesh or more or less around the world. One is laundering by the elite corrupt segment of the society in foreign banks. The other is a transaction by laundering for tax evasion or conducting organized crime. Laundering offers a covert avenue for smugglers, drug and illegal arms traffickers, terrorists, and other TOC groups to make hidden financial transactions required for conducting organized crime. This also facilitates a corrupt segment of public officials, law enforcing agencies, and others in the country for carrying out a monetary transaction to maintain the nexus and links with TOC groups.
Negative impacts of money laundering are multi-faceted in Bangladesh. It adversely affects the collection of government revenue. It deprives the government of its due revenues. Money laundering diminishes government tax revenue which leads to misallocation of resources and transfers economic power from the market, government, and citizens to criminals. Due to real laundering, entrepreneurs operate on loss which distorts the price stability and reduces the private sector investment across the economy. It increases the government development cost as well as capital flight from the country. Corruption and crime increase which creates instability in the law and order situation. The image of the country and its financial institutions will also be challenged.
There are several factors or reasons why money laundering is high in Bangladesh. “The main vulnerability for money laundering in Bangladesh remains the use of the underground hawala or hundi system, used to transfer money and valuables outside of the formal banking system. A segment of wage-earner expatriates uses the unofficial channel of Hundi to remit money back home. Hundi is also a popular mode for fund transfers to organized crime and terrorists. It is reported that every year huge amounts of funds are raised in the Gulf countries in the name of charitable organizations and the fundraiser, often sympathizers to terror groups, have recourse to money laundering for bringing the funds to Bangladesh” (Zohair 2017).
The corrupt segment in political-business or public and private sector is substantial. This segment has developed a culture of earning illegal money through various forms of corruption. Use of authority, influence, and positional capacity in exchange for bribes or financial benefits is widespread in the country. This segment of the society earns a huge amount of illegal money continuously throughout their political, professional, or business life. Consequently, they need to adopt this money laundering crime to legalize their illegal income. Apart from money laundering trends of other financial crimes in vogue in Bangladesh are:
a. “Corruption abuse of public power or position for personal/group financial gain”.
b. “Tax evasion remaining outside the tax net, nondisclosure of actual income, non-payment of income tax, underhand agreements with the tax authority, gross abuse of the tax holiday provisions, etc.”
c. “Loan defaulting, Intentional defaulting, siphoning of money from the authorized ventures for which the loan was taken, etc.”
d. “Regular fraud, pyramid savings schemes, misleading overseas job seekers, etc.”
Illegal Trade of Arms and Ammunition
“Bangladesh is now increasingly being used as a transit route by transnational crime network, terrorist and insurgent outfits for smuggling weapons. Smuggling or trafficking of arms/ammunition started in Bangladesh in the 70s when ultra-revolutionists of the communist parties were procuring arms secretly” (Newsdawan 2011). Intelligence agencies report that illegal arms enter into Bangladesh through 48 points around the bordering areas (Newsdawan 2011). Ramu, Moheshkhali, Inani, Fasiakhali, Anwara, and Shikalbaha are the most prominent points. Intelligence source further reveals that emerging Char islands are being widely used presently for the transportation of illegal small arms. However, area wise entry points of arms trafficking here are as follows (Newsdawan 2011):
a. Western Entry Points: Rajshahi, Dinajpur, Chuadanga, Kushtia, Meherpur, Doulatpur.
b. Eastern/South-Eastern Entry Points: Jointa in Habiganj, Chatak, Akhaura, Bibir Bazar, Chouddogram, Beloniya, Patiya, Srimangal, Kamalganj.
c. South-Eastern Entry Points: Teknaf, Ramu, Patiya, CHT, Khagrachari, Cox’s Bazar, Moheshkhali, Inani, Anwara, Shikalbaha.
d. Northern Entry Points: Tetuliya, Jhinaigati-Sherpur, Haluaghat, Netrokona.
e. Southern Entry Points: Sundarban, Kaikhali, Swandeep, Shatkhira.
“The illegal firearms being trafficked through Bangladesh are mostly made in China, the USA, the Czech Republic, and India. They include eight-shooter guns, sawn-off rifles, light machine guns, pistols and Indian-made arms like pipe guns, one-shooter guns and revolvers, etc.” (SA Terrorism Portal, 2017). Trafficking channel also exists from Pakistan, Afghanistan, and few ASEAN countries. The regional channel and routes of arms trafficking route in and through Bangladesh are shown below in figure 2.8:
Figure 2.8: Arms Trafficking Routes through Bangladesh.
“The traffickers adopt various operational strategies to avoid detection. They often dismantle or knock down the arms into small parts that are assembled later and dispatched to the sales point” (Islam 2017). “According to a report published by the Bangladesh Development Partnership Center (BDPC), at least 40,000 illegal and 25,000 licensed guns are used across the country for criminal activities”. Table 2.5 below shows the types and numbers/amounts of arms and explosives recovered by BGB from 2015 to 2019.
Human trafficking is a crime against humanity. Bangladesh grew as one of the worst sufferers of this trend. Bangladesh is not only one of the source countries but also used as transit points for human trafficking. The UN Protocol defines trafficking as follows: “Trafficking in persons shall mean the recruitment, transportation, transfer, harboring or receipt of persons, using the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person for exploitation. Exploitation shall include, at a minimum, the exploitation of the prostitution of others or other forms of sexual exploitation, forced labor or services, slavery or practices similar to slavery, servitude or the removal of organ” (UNODC on Human Trafficking 2010).
Human Trafficking in Bangladesh has grown to be a lucrative TOC. Trends of human trafficking here can be traced back to the ’50s when child trafficking to Middle East countries spread for use as ‘jockey’ in a camel race. However, over time, this criminal business has taken an acute state in Bangladesh. “Every year, mostly women and children are trafficked predominantly in India, Pakistan, and the Middle East countries. Bangladesh is now a major trafficking hub linking South Asia to the Gulf region through Dhaka –Mumbai-Karachi- Dubai as the primary route of trafficking. Human traffickers use 20 transit points located in 16 districts to smuggle people from Bangladesh to India” (Corraya 2015). Trafficking from Bangladesh to South-East Asian countries using water routes is although a new trafficking channel but getting crowded day by day. Teknaf, Ukhiya, Cox’s Bazar, Moheshkhali are a few of the transit points of this traffic route. Table 3.6 below shows the statistics of human trafficking in Bangladesh from 2015 to 2019.
“The high profit, as well as the low penalty nature of human trafficking business, has made it more attractive to traffickers (criminal gangs) and as well as very large-scale organized crime in Bangladesh” (Chowdhury 2003). “From several studies, it has been found that within, last thirty years, over 1 million children and women were smuggled out of the country. The current UNICEF report reveals that around 400 children and women are trafficked in each month” (Shuvendu 2015).
Several factors facilitate human trafficking in Bangladesh either as a victim or route of transit. The geographical factor is one of the significant issues. Being located between the Gulf region and South-East Asian countries, it provides a suitable place for linking human trafficking on both sides. Poverty is, a prime factor contributing to human trafficking here. “There are 27 million in Bangladesh facing extreme poverty and 31 percent living in chronic poverty in less developed areas” (The Borgen Project 2019). The poor socio-economic condition mainly in the rural areas induces people to migrate to other parts of the world for a job and better life, thus, make them easy prey to the traffickers.
The high rate of unemployment is another dominating factor contributing to human trafficking in Bangladesh. “The unemployment rate is 4.30 percent with an average salary of $60 a month” (The Borgen Project 2019). The high rate of unemployment pushes people in Bangladesh to be affected by an organized chain of human trafficking in two ways. “First; due to limited jobs and resources, one can easily become deceived into becoming a human trafficking victim because they are desperate to obtain a job in any way. Second; lack of employment and opportunities mainly in rural areas pushes the unemployed segment of the society to be involved in this trafficking chain who works as a local agent and collaborators for the traffickers”. Illiteracy and lack of awareness about the suitable opportunities abroad and the objective of the tracking chain also offer wider scope for the traffickers to elude the uneducated mass. Gender discrimination is also a prime factor. Females are still taken away from education at an early stage and are also marginalized in the work or job market. Education and the jobless unattended female segment of the poverty-stricken areas fall easy prey to human traffickers. Lack of accountability of the recruiting agencies is also contributory to human trafficking. A significant number of laborers from Bangladesh go outside every year, particularly in the Middle East, Malaysia, and Singapore. However, there is a lack of accountability of the recruiting agency and recruiting process in the country that also augments the trafficking business here. Above all are the weak administrative and legal steps to enforce strict measures against human trafficking. Due to inherent weaknesses, corruption, and weak administrative culture, strict punitive measures against human traffickers are absent in Bangladesh that helps the rapid spread of human trafficking.
Bangladesh is now a commonly used transit point and route for drug and narcotics trafficking. The proximity of global drug-producing zones, porous border, socio-economic, and cultural factors collectively contribute to the menace of drug trafficking in and through Bangladesh. “Drug trafficking mainly of heroin, hashish, opium, phensidyl, pethidine, or other psychotropic substances like Yaba or methamphetamines and precursor chemicals like acetic anhydride- poses a real challenge to the nation. The Yaba has grown to be a priority concern in Bangladesh. Its consumption has spiraled 2500 percent by 2017 in comparison to 2011” (BDNC Report 2017). The statistics of yearly seized drugs and narcotics by BGB are shown in table 2.7 below.
There are several reasons why drug smuggling is high in Bangladesh. People of Bangladesh have a historical and cultural link to drug abuse from early age. Opium was taken by elite society and dynasties in the Bengal region during the era of kings and emperors. Betel leaf and associated products had been a common addiction amongst grass root level people all around the country since civilization. People still bear the legacy of this drug abuse in the culture, which is diversified with modern drug stuff.
The vulnerability of Bangladesh to drug trafficking and use is enhanced by its geographical location and porous border. Geographically Bangladesh located in-between ‘Golden Triangle (Thailand, Laos, Myanmar)’ and ‘Golden Crescent (Afghanistan, Pakistan, Iran)’– the two largest drug-producing and trafficking zone in the world. Dense drug-producing areas of South East Asian countries are also closer to Bangladesh, as shown in the map below figure 2.9. The proximity of such a global drug producing zone made the drugs widely available to the traffickers to smuggle in and traffic through.
Along with the availability of drugs, the porosity of the Bangladesh border all along the boundary further strengthens the scope of drug smuggling here. Entry points are too many to be effectively checked by border security forces and law enforcing agencies. Even closure of the points in one area offers an easy option for the smugglers to shift the route to another part of the border. Such wider entry options offered by the porosity of Bangladesh’s border are contributory for organized criminals for drug smuggling. Below in table 3.8 are the locations of different major drug smuggling entry points around the bordering areas of Bangladesh from neighboring countries.
“Bangladesh is linked and connected by air, sea, and road communication with almost all the major drug-producing countries of this region. This has placed Bangladesh at a critical geographical crossroad for illicit drugs from Myanmar, India, Pakistan, and Nepal. Encircled by India on three sides, Bangladesh became a ‘launching pad’ for illicit drugs both from India and drug-producing countries beyond its border” (Razidur 2014). With its easy land, sea, and air access, Bangladesh has also become a major transit point for drug trafficking.
Poor socio-economic condition, lack of employment and opportunities, on the one hand, increases drug abuse amongst a frustrated segment of the society. On the other hand, this also forces the vulnerable segment of society to live on drug smuggling and selling.
Poor administration and weak law enforcement against drug smuggling is also a major contributing factor. There are reports of a corrupted segment in the administration and law enforcing agency that has formed a sustainable nexus with drug smuggler who complements each other. Often they are under the shadow of white-collar criminals and political or influential Godfathers who can influence government machinery and even the judiciary. So traffickers are conducting drug trafficking in the country without much fear. Such an environment of impunity helped the steady the growth of drug trafficking in Bangladesh.
Terrorism and Religious Militancy
Although terrorism and transnational crime differ in the objective, both complement with each other in many contexts. Terrorists and Transnational Crime Groups co-operate each other to pursue their objectives. Many terrorist groups exploit transnational crimes for their financial support while transnational criminal gangs take the support of terrorists when they need to use violence to secure their criminal activities. “Bangladesh is affected by terrorism and religious militancy for a long. Both have caused severe damage to the moderate image of the nation. Terrorism, amid its lethal manifestation, has generated insecurity and instability within the state and society.
Several Islamist Militant Groups and their offshoots have sprung up in the country over the last two decades. Harkat-ul-Jehad-al-Islami Bangladesh (HuJI-B), Jamaatul Mujahideen Bangladesh (JMB), Jagrata Muslim Janata Bangladesh (JMJB), Hizbut Touhid, Islami Samaj, Hizb-ut Tahrir, and Allar Dal are under the radar of the law enforcement agencies of the country” (Raman 2014). Of worst concern is that these terrorist and militant entities are interlinked and work in collaboration with other transnational/international terrorist groups.
Virtual Ingress and Cyber Crimes
Information technology is the most remarkable achievement of this century. Information technology facilitates people around the globe to establish and maintain real-time contact. This new space, called “cyberspace”, is no less real than geographic space. This cyberspace has connected people based on education, taste, cause, and culture, ignoring geographical proximity. “Unfortunately, Cyberspace and communities have also paved the way for easy and quick virtual ingress of non-traditional threats targeted to exploit fault lines and vulnerabilities” (Eric 2020).
“Criminal offenses committed against or with the help of computer networks is cybercrime. It is an offense against the confidentiality, integrity, and availability of computer data and systems. The computer may have been used in the commission of a crime, or it may be the target. Extremist groups train their workers for future cyber warfare. Extremist organizations also use the Internet to target their audiences without depending on overt mechanisms” (UNODC on Computer related Offences 2018).
Bangladesh could not yet strictly enforce its newly promulgated Cyber Law. This allows Cybercriminals to easily conduct Cyber Crimes in Bangladesh. Various online communication links and apps like Facebook, Viber, What’s Apps, Telegram, Signals, and many more are widely used by the people of Bangladesh. The trend is on the sharp rise every day. No doubt these have a positive role in social communication, but their use for criminal purposes is also on the rise.
General Aziz Ahmed, BSP, BGBM, PBGM, BGBMS, psc, G, Ph.D, former Chief of Army Staff, Bangladesh Army.