http://www.thefinancialexpress-bd.com/2015/03/22/85893 VOL 22 NO 130 REGD NO DA 1589 | Dhaka, Sunday, March 22 2015
Anti-corruption drive: Learning from the Chinese example M S Siddiqui According to the Economic Relations Division (ERD), donors and lenders disbursed $3 billion in the 2013-14 fiscal year. The amount was $2.79 billion the year before. But more money is being siphoned off than what Bangladesh gets as foreign aid. A study has revealed that illicit flight of capital has reached alarming levels, costing as high as 30 per cent of gross domestic product (GDP). A number of international studies have identified that illicit outflow of significant sums occur every year from Bangladesh. On average, $3.1 billion is siphoned out of Bangladesh, the highest among the least-developed countries, according to UNDP. These black monies come from nepotism (for relatives, friends and political affiliates), bribery and fraud. Bangladesh's corruption epidemic is caused by opaque public institutions, lack of protection for anti-corruption actors like whistleblower and widespread government interference in the work of anti-corruption watchdogs. These wealthy people mostly spend their money either on wasteful luxury or siphon it out of the country instead of investing in the domestic economy. According to the latest data of the Swiss National Bank, the deposits made by Bangladesh citizens at various Swiss banks have risen by 62 per cent year-on-year in 2013. The deposits stood at Tk 32.36 billion (372 million Swiss franc) at the end of 2013 calendar year while it was Tk 19.91 billion in 2012. Hundreds of millions of dollars are being laundered through informal channels such as "hundi" goes. This shows that, rich people feel unsafe to keep their deposits in the country. There is a huge difference between the official exchange rate and the kerb market rate in recent times. This is a sufficient proof of money laundering. The official rate of the taka against the dollar is Tk 77, but its rate in the kerb market is Tk 82-84. The government allowed controversial scopes for whitening black money in some budgets. This has hardly worked. In the fiscal 201314, only Tk 2.3778 billion was whitened, with the government getting Tk 450 million in taxes. Bangladesh as a signatory to the United Nations Convention against Corruption (UNCAC) can collect information on stolen assets from other signatories to the UNCAC. As per the deal, every party is bound to help other signatory countries if they seek information over money laundering. Bangladesh has improved the legal system to prevent corruption and money laundering to other countries. The definition of money laundering has been subsequently extended to cover various processes through which the crime is being committed, including 'predicate offences', such as
corruption and bribery, forgery of currencies and documents, extortion, cheating, dealing in illegal arms and drugs, smuggling, abduction for ransom, murder, and the transfer of concealed money to other countries from Bangladesh or receiving such money from other countries into Bangladesh. A number of reforms in laws related to corruption and laundering of money have been undertaken. The Code of Criminal Procedure 1898, the Prevention of Corruption Act 1947, the Penal Code 1860 and the Money Laundering Prevention Act 2002 criminalise attempted corruption, extortion, active and passive bribery, bribery of foreign public officials, money laundering, and using public resources or confidential state information for private gain. The Anti-Money Laundering Law also incorporates provisions to prevent stock market manipulation and a provision that allows documents provided by foreign governments to be admissible in court for bringing back siphoned-off money from abroad. But the drive of the Anti-corruption Commission failed to address the problem of corruption and money laundering due to intervention from the influential persons and inactiveness and nepotism. The Anti-corruption Commission (ACC) Act needs to be further amended to make it more independent of government influence. Bangladesh can learn from the experience of China. As he took executive authority in December 2012, the Chinese President Xi Jinping directed the Central Commission for Discipline Inspection (CCDI) to begin its anti-corruption campaign. The campaign, which has so far concentrated on "tigers and flies" - senior and junior members of government - has snared oil chiefs, heavyweight politicians and a top People's Liberation Army (PLA) general. The "Fox Hunt" is the latest battle in president Xi Jinping's ongoing crusade against government corruption which, he has warned, could lead to the Communist Party's demise. China has launched an international "fox hunt" for corrupt officials, vowing to track fugitives to the four corners of the earth and bring them to justice. It is alleged that Chinese officials have been lining their pockets and skipping the country since the 1980s. China has had many successes in its anti-corruption push. More than 750 errant civil servants were repatriated last year who had fled from China with more than ÂŁ960m, according to figures released recently. Fox Hunt 2014 sounds like the name of a blockbuster movie - one about gangsters or spies. It is the code name for efforts by Chinese CCDI officials to arrest suspected economic criminals in foreign countries. Fox hunting, which originated in the 16th century, is an activity involving the tracking, chase, and sometimes killing of a fox, traditionally a red fox. It is no more a game and banned in all parts of the world. After "beating the tigers" and "catching the flies" within the country under active support from the head of the state, China's anti-corruption campaign rolled out "Fox Hunt 2014." The "Fox Hunt" is a campaign to hunt down officials and senior management of state-owned
enterprises who have fled the country with embezzled or illegally obtained money. The majority of the runaway officials used to work in lucrative departments such as finance, state-owned monopoly enterprises, transportation, land management, construction, taxation, trade, and investment. President Xi Jinping is the hunt organiser and his master of hounds is Wang Qishan, a 66-yearold historian who runs Beijing's feared anti-corruption unit, the Central Commission for Discipline Inspection. Some of the countries responded very positively to China's appeal for help in its anti-corruption drive. Australia has agreed to assist China in the extradition and seizure of assets of corrupt officials who have fled to Australia with illicit funds running into the hundreds of millions of dollars. The joint operation will make their first forfeiture of assets within weeks, having agreed on a priority list of alleged Chinese economic fugitives who have taken residence in Australia identified by Beijing as one of the most popular outlets for corrupt Chinese money. Among the suspects identified are naturalised Australian citizens and permanent residents who for years have laundered money under the guise of being genuine investment or business migrants from China. Similarly, Bangladesh has signed a memorandum of understanding (MoU) with Malaysia for exchange of information relating to money laundering between the financial intelligence units (FIU) of the two country's central banks. The agreement will also help to bring back the money siphoned from Bangladesh to that country. Between 2002, when Malaysia launched its 'second home' programme, and April this year, some 25,500 people from across the world migrated to the country. Of them, 2,874 (11 per cent) are Bangladeshis, according to the Malaysian government website. Let us wait and see the outcome of anti-corruption drive of the Bangladesh government.
The writer is a Legal Economist. shah@banglachemical.com