FATF Status

Bangladesh is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 14 February 2014

The FATF welcomes Bangladesh’s significant progress in improving its AML/CFT regime and notes that Bangladesh has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in October 2010. Bangladesh is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Bangladesh will work with APG as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Bangladesh was undertaken in 2020. According to that Evaluation, Bangladesh was deemed Compliant for 8 and Largely Compliant for 27 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 3 of the Effectiveness & Technical Compliance ratings.

Corruption significantly hinders investment and economic growth in Bangladesh, despite the country's commitment to combating it through various laws and its participation in the UN Anticorruption Convention. The enforcement of these laws is inconsistent, with corruption prevalent in public procurement and regulatory authorities, leading to an estimated reduction of GDP by two to three percent due to off-the-record payments. While the Anti-Corruption Commission (ACC) is tasked with investigating corruption, concerns have been raised about its independence and effectiveness, particularly under the current government, which opposition parties claim uses the ACC to target political adversaries.

Bangladesh, with a population of 170 million, has experienced an average annual GDP growth of 6.5% from 2013 to 2022, although growth is projected to slow to 5.78% for FY2023-2024 due to external pressures such as the war in Ukraine. The country has faced significant economic challenges, including a widening current account deficit, currency depreciation, and declining foreign exchange reserves, prompting the government to seek a USD 3.3 billion loan from the IMF to stabilize its economy. Despite these hurdles, Bangladesh remains an attractive destination for foreign direct investment, receiving USD 3.48 billion in 2022, largely due to its strategic location and large workforce.

Bangladesh has made gradual progress in improving its investment climate, attracting USD 3.48 billion in foreign direct investment in 2022, bolstered by its strategic location and large workforce. However, challenges such as inadequate infrastructure, bureaucratic delays, and corruption continue to hinder foreign investment, alongside a banking scandal that has led to a significant rise in nonperforming loans. The government offers various incentives for foreign investment, but the full implementation of these policies remains inconsistent.