IT IS (NOT) SO EASY TO GET AWAY WITH IT
by F R Chowdhury 18 April 2020
Easy money comes in many different ways. From mere theft and robbery to electronic hijacking of central bank, they vary widely in their mode of operation. Drug addiction and smuggling of drugs can destroy a complete generation of young people. Poverty at home is, to some extent, responsible for growth of human trafficking. Corruption not only makes easy money but also prevents its detection and exposure. Another very old established way of making easy money is to take loan from bank and then not to pay it back. Those corrupt people who make such easy money want to keep it initially a secret until some process of transformation when they can justify the newly acquired wealth. This is commonly known as money laundering. It tries to turn black money into white money.
Similarly there are different ways of sending such easy money abroad. One of the most commonly used systems is through the banks by means of both over and under invoicing unless one takes the risk of carrying the money personally during foreign travel. Military dictators (so-called presidents) prefer to make overseas travel either by Government’s VIP plane or by chartered special flight with huge number of diplomatic bags. I hope the readers understand what I am trying to refer to. Economic development cannot be made sustainable unless these loopholes are closed. In brief I tried to explain the problems and shall later discuss as to how these problems can be resolved to common benefit of the people.
It has been a customary practice for the western world to make mockery of corruption in the third world countries. Most of the western countries often forget to look at themselves. They are also to blame to a large extent. I say this because USA, UK, Germany, France and other countries often provide shelter to those corrupt rulers from the poor third world countries. If you look at the nationality and residence permit laws of most of these countries, you will find one of the provisions is linked with amount of money that you can invest in that country. I understand you need to invest at least two million pounds in the UK to get a residence permit. In the United States one can, in certain circumstances, get a Green Card by investing US dollar five hundred thousand only. In other cases, one million dollar of investment with job opportunities for ten persons can get the Green Card. In Peru (South America) a mere US dollar twenty-five thousand can get you a residence permit. The latest I have come to know is that by owning real estate/ property worth US dollar two hundred fifty thousand can get you a residence permit/ nationality of Turkey. This money, in most cases, is nothing other than the money of the poor people of the country of origin of the investor squeezed out by illegal means. Idi Amin got shelter in Saudi Arabia with his money. Zainal Abdin of Tunisia also got shelter in the same way. Last month I read the news about one Gazi family from Bangladesh was now living gorgeous life in Canada after looting a few millions from Basic Bank. Similarly one Prasantha family looted from NRB and they are now having lavish lifestyle in Singapore. The latest trend is to buy property abroad. The preferred destinations are – USA, Canada, Australia, UK and New Zealand. These are the same countries that criticize the non-existence of democracy and human rights situation in the third world. I wonder as to why they do not look at themselves and try to realize how they are also to blame for this deteriorating situation.
The asylum and refugee system in Sweden is very strict. While granting asylum the Swedish authority looks at the gravity of the case. It matters nothing if the asylum seeker is a famous scientist or s/he has lot of money to invest. The UK has one of the strictest set of laws and regulations to combat money laundering. Just to name a few: The Proceed of Crime Act (POCA) 2002, The Serious Organized Crime & Police Act (SOCPA) 2005 and Terrorist Financing & Transfer of Fund Regulations (MLR) 2017. For opening a new bank account it is necessary to give full identity along with those of the person introducing the new client. The bank has to meet the KYC (know your customer) criteria. Similarly lot of questions has to be answered if large amount of money is to be transferred from any account or to be received in an account. UK solicitors are required to question about source of finance if a property is to be purchased by cash transaction (instead of mortgage financing). Despite all the legal hurdles, criminals still find their way to the United Kingdom. The normally enter seeking political asylum and then, in a slow and gradual process, bring all their wealth.
It would be nice for developing countries to have such deterrent laws in their country to ensure that public money acquired through corruption or loan defaulters can have no scope to get away from the eyes of law in their own countries to make new homes abroad. The new immigrants who want to take advantage of investment law must satisfy the host country that the money has been earned through legal means and that there is no investigation pending against them for corruption or loan repayment. These countries could still have laws to cooperate with governments of countries from which the new arrivals take place for the purpose of inquiry/ investigation. Nobody can have any objection against a person as to where s/he wants to reside or where to invest provided no foul play is involved. However, I also admit that in some cases the corrupt government in a third world country may try to get political rivals or opponents back in the country to put them in jail to settle the score. The host country legislation should be so drafted that only those involved in money laundering suffer. There must be accountability at both ends. Criminals involved in money laundering must not be able to gain political asylum. It is for the sake of good name and fame that every host/ developed country must have appropriate legislation and administrative measures in place to ensure that the country does not become a safe haven for criminals. The country must not hesitate to grant asylum to those who fight for human rights and democracy.
Malaysia, Spain, Dubai, Turkey and Switzerland are gifted with God given beautiful locations. They have every right to exploit their asset for economic gain. They have to give residence permit or other facility to attract the richest people of the world. It is in their own interest to generate economic activities. However, the policy and associated legislation must not make it a heaven for the corrupt people. There must be enough check and balance in the system to ensure only genuinely rich people with no question on their source of earning are allowed. These countries must always remain open to cooperate with other governments in any investigation relating to corruption and money laundering.
I shall now talk about offshore account and non-resident bank accounts. I fully agree that multi-national corporations/ companies need to maintain bank accounts in different countries to facilitate their business. Sometimes they are forced by some of those countries to operate accounts in their countries. Private companies where the owners or executives frequently travel abroad may also require operating such account. But what about accounts in a country with which there is no business dealing. In some cases there are accounts in a country where the account holder cannot even travel. Think about a Bangladeshi having an account in Switzerland or Denmark or Cayman Islands. Time has come for the host country to impose restrictions on such banking. The host country should also have the right to divulge such information to the government of the original nationality of the account holder.
Through this article I would like to congratulate PM Imran Khan of Pakistan for raising this issue of money laundering during the 74th UNGA in 2019. He was bold enough to point his finger towards the Western World as to why they do not say a word about those corrupt politician and businessmen who buy their residence permit in their countries and instead go on criticizing the third world for corruption and lack of democracy. It is time the Western World should look at the mirror and see the role played by them. To eliminate corruption, money laundering and terrorist funding the world has to work together instead of blaming each other.
FATF – Financial Action Task Force has failed to do anything. Most people even do not know about their existence. It is certainly not within the means of any NGO or other voluntary organization to deal with the matter. A new IGO (Inter-Governmental Organization) is perhaps necessary with internationally agreed system and procedures unless one of the existing UN agencies with remit to fight financial crime globally can deal with the matter. The International Monetary Fund (IMF) and the Paris based International Chamber of Commerce (ICC) should jointly call a diplomatic conference under UN umbrella to adopt an International Convention on Prevention of Corruption, transfer of black money, money laundering and terrorists funding. The Convention should also decide whether to establish a new specialized agency under the UN for implementation of the Convention or to revamp one of the existing agencies dealing with crime and give it the remit with full powers. The Convention will definitely help growth of accountability at every stage and thereby help flourish democracy and human rights.
Ever since the Pakistan Premier talked about it in the UN, I have not heard any other movement about it. I take the initiative to bring this issue to international focus once again. I hope the readers will like the discussion in this article. The article provides several starting points on which experts can add meat to the bone. Let us make life difficult for corrupt people. There should be no safe haven for them. They should know – it is NOT so easy to get away with it.
London, 15-April-2020 <email@example.com>