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 participation in the UN Anticorruption Convention and existing anti-corruption laws. The enforcement of these laws is inconsistent, particularly in public procurement and regulatory authorities, leading to substantial GDP losses due to off-the-record payments. While the government claims to be committed to combating corruption, opposition parties allege that the Anti-Corruption Commission is misused for political purposes, and recent changes may weaken institutional safeguards.

Bangladesh, with a population of 170 million, has experienced an average annual GDP growth of 6.5% from 2013 to 2022, but growth is projected to slow to 5.78% for FY2023-2024 due to external challenges like the pandemic and the war in Ukraine. The country has faced a significant decline in foreign currency reserves, dropping from USD 48 billion in August 2021 to under USD 21.8 billion by December 2023, largely due to rising commodity prices and high imports. Despite these challenges, Bangladesh attracted USD 3.48 billion in foreign direct investment in 2022, supported by its strategic location and large workforce.

Bangladesh's investment climate is characterized by a strategic location and a large workforce, attracting significant foreign direct investment, which reached 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. Despite the government's efforts to promote investment through various incentives and agencies, issues like corruption and a sluggish judicial process continue to pose obstacles.