Bangladesh Country Summary

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 the UN Anticorruption Convention and existing anti-corruption laws. Enforcement of these laws is inconsistent, particularly in areas like public procurement and tax collection, with off-the-record payments estimated to reduce GDP by 2-3%. While the government claims to combat corruption, opposition parties argue that the Anti-Corruption Commission is misused for political purposes, and recent changes may weaken its independence.

Bangladesh, with a population of 170 million, is experiencing economic challenges despite a robust recovery from the pandemic, facing issues such as a widening current account deficit and declining foreign exchange reserves exacerbated by external factors like the war in Ukraine. The country achieved an average GDP growth of 6.5% from 2013 to 2022, but growth is projected to slow to 5.78% for FY2023-2024, influenced by reduced demand for its main export, ready-made garments, and rising commodity prices. Foreign direct investment reached USD 3.48 billion in 2022, but ongoing issues such as inadequate infrastructure, bureaucratic delays, and a banking scandal have hindered the investment climate.

Bangladesh's investment climate is characterized by a strategic location and a large workforce, attracting significant foreign direct investment, which totaled USD 3.48 billion in 2022. However, challenges such as inadequate infrastructure, bureaucratic delays, and a lack of effective enforcement of laws hinder foreign investment. While the government offers various incentives for foreign investment, the full implementation of these policies remains a work in progress.