Bangladesh ramps up anti-money laundering reforms before global review

Infographics: TBS

Highlights:

• Bangladesh ramps up AML reforms ahead of 2027 APG review
• APG team to assess Bangladesh's preparedness in August
• Govt conducting five national money laundering risk assessments
• Bangladesh targets December deadline for risk assessments
• Govt steps up asset recovery, AML enforcement efforts
• Poor APG rating could hurt investment, trade: officials

Bangladesh has stepped up preparations for a major international assessment of its anti-money laundering (AML) and countering the financing of terrorism (CFT) regime, with the government directing ministries and agencies to strengthen legal, investigative and enforcement capacities ahead of the country's fourth mutual evaluation by the Asia Pacific Group on Money Laundering (APG) in 2027.

As part of the effort, authorities are conducting national risk assessments in five key areas and aim to complete them by December, followed by the formulation of a national risk mitigation strategy. An APG pre-evaluation team is scheduled to visit Dhaka from 11 to 13 August to review Bangladesh's preparedness.

The preparations were discussed at a meeting of the National Coordination Committee (NCC) on AML/CFT, chaired by Finance Minister Amir Khosru Mahmud Chowdhury at the finance ministry today (23 July), officials who attended the meeting said.

Five national risk assessments underway

Bangladesh is assessing risks in five areas: money laundering, terrorism financing, proliferation financing related to weapons of mass destruction, money laundering through NGOs and non-profit organisations (NPOs), and risks associated with virtual assets, cryptocurrencies and digital transactions.

The Anti-Corruption Commission is leading the money laundering assessment, while a committee led by the Ministry of Home Affairs and the Police's Anti-Terrorism Unit is evaluating terrorism financing risks. The Bangladesh Financial Intelligence Unit (BFIU) is assessing risks linked to NGOs, virtual assets and digital transactions, while a Foreign Ministry-led committee is responsible for the proliferation financing assessment.

According to meeting sources, 80-90% of the assessments have been completed. Once finalised by December, the findings will form the basis of a national strategy to mitigate identified risks.

Officials said expanding digital financial transactions would be a key part of that strategy, as digitised transactions make it easier to trace the source, destination and movement of funds. The expansion of Bangla QR and other digital payment platforms is also aimed at strengthening transaction monitoring.

APG team to review preparations

An APG delegation will visit Bangladesh from 11 to 13 August for meetings with the National Coordination Committee, a working committee led by the Financial Institutions Division, and relevant ministries and agencies.

A senior official who attended the meeting said, "The APG team will assess Bangladesh's level of preparedness, priority initiatives and the institutional capacity of the agencies involved. All relevant organisations have been instructed to be ready." 

Bangladesh plans to submit its national risk assessment reports, national strategy and details of its legal and institutional framework to the APG evaluation team by March next year. Virtual discussions will follow before the evaluation team visits Bangladesh in October 2027 to conduct interviews with relevant agencies.

Focus on legal compliance and enforcement

The APG evaluation will follow the methodology of the Financial Action Task Force and assess two key areas: technical compliance, or whether Bangladesh's legal and institutional framework meets international standards, and effectiveness, or how well those laws are implemented.

A secretary who attended the meeting said legal reforms alone would not be enough.

"The evaluation will examine whether suspicious transactions are investigated, prosecutions initiated, illicit assets confiscated and offenders brought to justice," the official said.

Reforms and asset recovery

Referring to reports published by the interim government on large-scale money laundering, officials said the evaluation would assess not only the scale of illicit financial flows but also the effectiveness of the government's response.

To strengthen the AML framework, the government is amending the Money Laundering Prevention Act, the Companies Act and other laws, introducing beneficial ownership disclosure requirements and strengthening the Office of the Registrar of Joint Stock Companies and Firms.

Authorities have also formed joint investigation teams, prioritised 11 major money laundering cases, intensified asset seizure efforts and engaged international law and audit firms to help recover assets transferred abroad.

Officials said the government is pursuing asset recovery through both criminal investigations, led by agencies including the Criminal Investigation Department (CID), and civil proceedings involving international legal and forensic experts.

So far, eight banks have signed non-disclosure agreements with 12 international firms, while engagement agreements have been concluded with two firms. The firms will work on a "no recovery, no fee" basis, meaning they will only be paid if assets are successfully recovered.

The meeting also reviewed international cooperation, information sharing among law enforcement agencies and progress in recovering illicit assets held overseas.

Why the evaluation matters

Officials said a poor APG rating could erode international confidence in Bangladesh's financial system, discourage foreign investment and increase the cost of international trade.

Banks and businesses could face stricter scrutiny in opening letters of credit (LCs) and conducting cross-border financial transactions, leading to higher compliance costs.