However, discussion on money laundering now takes place only once, since GFI didn’t release its report for two years because of the coronavirus pandemic. Another discussion on money laundering has already begun before the Swiss banks report. And several lawmakers deserve credit for it. They gave speeches criticising the government’s inaction on money laundering. The finance minister also had to reply to these discussions in parliament’s budget session. And when the the finance minister himself wants to know the names of the money launderers, questions naturally arise about the commitment of the government in this regard.
The Swiss National Bank released a report titled “Annual banking statistics for 2020” on 17 June. According to the report, deposits by Bangladeshis dropped by 6.6 per cent to 563 million (56.3 crore) Swiss francs or about Tk 52.03 billion (5,203 crore) in 2020. One Swiss franc equals to Tk 92.28. The deposits stood at 603 million (60.3 crore) Swiss francs. Deposits by Bangladeshis had declined for three straight years.
All funds deposited in the Swiss banks are not necessarily illegal money. While money channelled through various illegal means from Bangladesh is stashed away in Swiss banks, Bangladeshis living in various countries ariund the world also make depositsthere. That means there are both legal and illegal money in Swiss banks. However, the Swiss banking system is globally known for protecting clients’ confidentiality as per the law of the country. So the number of secret deposits is more.
A fall in deposits by Bangladeshis in Swiss banks for three straight years does not necessarily indicate a decline in money laundering. The Swiss banks don’t have certain privileges as before. Swiss banks couldn’t reveal any client’s details according to the Swiss Banking Act enacted in 1933. Many things changed after the the Obama government in the US passed the Foreign Account Tax Compliance Act in 2010. As per the law, Swiss banks are to provide some details of their clients now. Like the US, several European countries have also taken various steps to collect information. Even neighbouring India signed an automatic exchange of information framework agreement with Switzerland. As a result, Swiss banks can’t be as secretive as they were before. Swiss banks are facing growing pressure to shift from the secrecy stance. Besides, new places and sources have been created globally to stash laundered money. There are various ways to keep money by opening companies in countries and territories including Cayman Island, Luxemburg, UK, USA, Singapore and Hong Kong. So, Swiss banks don’t dominate in hidden wealth anymore.
The name of more than 50 businesspersons and companies has appeared in Panama Papers and Paradise Papers released by International Consortium of Investigative Journalists (ICIJ). They all siphoned off the money opening offshore companies. Bangladeshi businesspersons also run big businesses in various countries including Singapore, Dubai, Hong Kong, Thailand, UK and USA. Media has reported on Bangladeshis purchasing houses in Malaysia and Canada. Everyone knows about this. So Swiss banks are not the only way to siphon off money anymore.
Reports reveal Tk 50 billion (5,000 crore) is deposited in Swiss banks whereas, according to GFI, on average, $7.53 billion (753.37 crore) equal to Tk 640 billion (64,000 crore) is siphoned off Bangladesh annually. GFI mainly collects data on money laundering from international trade statistics. They have no data on ‘hundi’, an illegal financial instrument to transfer money from place to place. Experts believe the actual figure will surpass Tk 640 billion. And it is possible to build two Padma bridges every year with this Tk 64 billion.
The matter of money laundering was discussed in parliament. Like this time, prime minister Sheikh Hasina joined the discussion on Swiss banks in parliament in June 2017. At that time, she said, “a list is being prepared on whoever makes deposits in Swiss banks and how much. We will surely bring back the country’s money.” The Bangladesh Bank and the National Board of Revenue (NBR) became a somewhat active after the prime minister’s remarks. After that, the Bangladesh Financial Intelligence Unit (BFIU) Bangladesh Bank sent a letter to Switzerland’s financial intelligence unit seeking information on Bangladeshis making deposits in Swiss banks plus singing a memorandum with Swiss National Bank. But no progress has been made so far. The government actually has no effective initiative at all.
Lastly, it can be said the question is about sincerity, determination and political will. The big question is whether the government really wants to catch the money launderers or not. Since we don’t know the answer, the discussion on money laundering will stop this time too after June is over. At one point of the discussion, the government will make some promises like they had made in previous years. Money launderers also know these are just words. So tax evasion will continue. Black money will increase. Bank loans won’t be repaid. Earning from narcotics and arms trade will increase. Government officials will continue to take bribes and carry out corruption. And this money will be laundered to another countries and a portion of it will go to Swiss banks. So there is nothing to be relieved when there is a decline in the funds being kept in Swiss banks.
This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Hasanul Banna