A spate of suicide bombings in Bangladesh last week has apparently prompted the government to push for changes to its Money Laundering Act with the aim of blocking funding for the militant groups thought to be responsible for the attacks.

One area of concern to the authorities is the use of letters of credit (L/Cs) in illicit funds transfers.

Amendments

The authorities say they will amend the Money Laundering Act very soon, with the aims of cutting off sources of funds destined for militants and curbing other forms of illicit funds transfers.

Draft amendments have already been signed off by finance and planning minister, Saifur Rahman, but the changes will have to be approved by the cabinet and parliament.

False quantities

Proposals in the draft include one on post-shipment inspection for bulk imports to verify the quality and quantity of the products.

Rahman is also proposing ways to cut down on illicit funds transfers using L/Cs in cross-border transactions that deliver a much smaller value of goods than that specified on the L/C, thus providing the so-called exporter with potentially substantial sums of cash from the L/C proceeds.

The minister is also concerned that there is no system of issuing arrival reports on imported goods, thus enabling 'exporters' and 'importers' working in connivance with customs officials to illegally transfer money from one country to another via wrongly valued cross-border trades.

Attacks

December has seen an intensification of bomb attacks in Bangladesh that began in August. The attacks are blamed on militants from banned groups, including Jamaat-ul-Mujahideen, which aims to convert the world's third most populous Muslim country into an Islamic state governed by sharia law.

State Minister for Home Affairs Lutfuzzaman Babar said in November that Jamaat-ul-Mujahideen, along with another outlawed Islamist group, Jagrata Muslim Janata Bangladesh, had established a 2,000-strong suicide squad to pursue their quests.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.