Money Laundering Risks: the Sheikh Hasina government of Bangladesh

12 February, 2025

IMPORTANT MONEY LAUNDERING RISK UPDATE FOR MLROs

We are alerting you to an increased risk of potential money laundering connected with former members of the Sheikh Hasina government of Bangladesh.

In August 2024 Sheikh Hasina, the former Prime Minister of Bangladesh, was deposed after mass protests. Key figures from her former regime are now under criminal investigation relating to the siphoning of money out of the country despite the existence of strict currency controls in Bangladesh[1]It has been estimated that between 2009 and 2023, $234 billion was improperly transferred out of Bangladesh to benefit regime insiders.

A recent report by Transparency International UK and several other agencies and organisations, has highlighted a significant risk that former members of this regime will seek to hide and move assets through the acquisition of UK properties. Research has already indicated that the UK has been a key destination country for suspicious funds from Bangladesh with many regime insiders making the UK a second home.

According to reporting in the Guardian[2], a small group of regime insiders already own £400 million worth of UK property which reportedly ranges from high-end luxury property in London to lower value new-build properties across the country (with some being used for the generation of rental income). Many of these property purchases were part-financed by lenders in the UK, Singapore and Switzerland.

Some of the patterns which have been identified have been the use of informal value transfer systems (in this case the Hundi) being used to move money out of the country, trade misinvoicing whereby invoices are manipulated by importers/exporters to move funds across borders illicitly, shell companies being used to manage and obscure wealth from certain jurisdictions[3] and some regime insiders representing that their wealth has been outside Bangladesh such as through real estate business in the UK.

STEPS YOU CAN TAKE

Conveyancing is a high risk sector, and intelligence of this sort is a stark reminder of the need for vigilance and strict compliance with AML and CTF requirements.

We strongly urge MLROs to:

1. Identify their practice’s exposure to relevant transactions or regulated activities relating to clients who:

1. may be under investigation in Bangladesh for corruption-related offences and/or money laundering.
   1. were members of the Hasina Government, or are family members, relatives or known close associates of former members of the Hasina Government.
   1. were business associates of the Hasina Government, state contractors to the Hasina regime, or experienced a significant growth in business during the 16 years that Hasina was in power in Bangladesh. 
2. Ensure robust AML checks are undertaken in relation to clients that fall into the categories set out above, including enhanced due diligence to establish and/or review the source of wealth and source of funds. Bear in mind the paragraph about the patterns which have been established in undertaking your checks.
3. Report suspicious activity to the UK’s Financial Intelligence Unit, and where appropriate under the Defence Against Money Laundering route, especially given the dynamic nature of the situation in Bangladesh.  Doing so will ensure vital information and intelligence from the conveyancers is not missed.
4. Be particularly alert to changes in corporate ownership, or the transfer of assets between corporate groups, associates or family members in relation to these clients especially in relation to property ownership.

The CLC’s Anti-money Laundering Toolkit contains extensive resources to support your compliance with AML and CT, and should you or colleagues need any further support with AML matters, you can contact aml@clc-uk.org.   

[1] Which prohibit the movement of over $12,000 out of the country each year without central bank approval.

[2] https://www.theguardian.com/business/2024/nov/30/money-trail-questions-over-deposed-bangladeshi-elites-400m-uk-property-empire

[3] British Virgin Islands, Isle of Man, Singapore, UAE and the UK.