Over 50 ex-ministers, MPs, tycoons among targets of Tk40,000cr foreign asset recovery

Highlights:

• Government targets Tk40,000cr undeclared foreign assets with new penalty law
• Over 50 individuals issued notices; most explanations deemed unsatisfactory
• Penalties equal to overseas assets will be recovered from local holdings
• New law covers former citizens and undeclared foreign wealth of Bangladeshis
• Investigations found passports, properties and assets across multiple countries
• Experts warn recovery is difficult and requires strong documentation

The government has launched an unprecedented drive to seize domestic assets from powerful individuals including former ministers and lawmakers, leading business figures, bank owners and members of influential families after tracing over Tk40,000 crore in undeclared foreign wealth.

This is the first time the government is using new law to claim an equivalent penalty from their local holdings.

Several tax zones in Dhaka have already issued notices to more than 50 individuals and institutions, Ahsan Habib, director general of the National Board of Revenue's (NBR) Central Intelligence Cell, told The Business Standard.

Some of the accused sent representatives to explain the origin of their offshore wealth, but officials say most explanations were rejected as "unsatisfactory", he added.

If the individuals fail to pay within the stipulated deadlines – or decline to appeal – the government will initiate recovery proceedings under the Public Demands Recovery Act, officials said.

One of the largest cases uncovered so far involves over Tk4,000 crore in foreign assets linked to a single businessman. The authorities have demanded an equivalent amount from his domestic holdings as penalty.

A Dhaka tax commissioner, requesting anonymity, said seven individuals were initially served notices seeking explanations of assets traced abroad.

Infograph: TBS

"Their representatives appeared, but the explanations were deemed unacceptable. Fresh notices were issued in October imposing penalties equal to the market value of the overseas assets," he said.

If payments are not made, the commissioner added, the authorities will proceed to confiscate domestic assets after completing required legal steps.

Former NBR chairman Muhammad Abdul Mazid welcomed the initiative.

"Time will tell how successful the government will be," he said. "But enforcement must continue to send a strong message to money launderers. For years, neither the government nor its institutions took decisive action, enabling illicit transfers to flourish."

What the law says

The 2023 Income Tax Act introduced a provision allowing authorities to impose penalties equal to the value of any undeclared foreign asset held by a Bangladeshi taxpayer. The rule also applies to individuals who have since renounced Bangladeshi citizenship.

This clause was added after earlier governments struggled to repatriate smuggled funds from abroad. Section 21 of the Act empowers tax officers to impose a penalty equal to the market value of any unexplained overseas asset.

During the previous administration, numerous influential figures – including members of the S Alam family – obtained foreign citizenships. Until 2023, the law prevented Bangladesh from recovering smuggled assets from those who had surrendered their passports.

Following the political transition in August 2024, the interim government amended the Act to include anyone who "was or is Bangladeshi by birth", enabling enforcement even against former citizens.

Tracing Tk40,000cr abroad

On 17 August, the chief adviser's office announced that the Central Intelligence Cell had identified Tk40,000 crore in foreign assets owned by Bangladeshis. The information came from investigations in seven cities across Singapore, the UK, the UAE, the US and Australia, as well as intelligence gathered from other international sources.

Investigators also identified 352 passports purchased with illicit funds across nine countries, including Antigua and Barbuda, Dominica, Grenada, North Macedonia, Malta and Türkiye.

Central Intelligence Cell chief Ahsan Habib told Chief Adviser Muhammad Yunus that the findings represented only the "tip of the iceberg".

A White Paper report released after the interim government took office estimated that nearly Tk28 lakh crore had been smuggled out of Bangladesh over the past 15 years.

Govt's recovery process

Officials said the government's recovery process is moving in phases. Tax zones first issued notices to the accused individuals, seeking explanations for the foreign assets traced in their names.

When the responses were found unsatisfactory, the zones issued formal demands, seeking penalties equivalent to the market value of the assets.

A tax commissioner, speaking to TBS on condition of anonymity, said the individuals have been given one month to pay the penalty. He said they may either settle the amount or file appeals within the deadline.

"If they file appeals, the matter will move through legal procedures, and it is difficult to predict how long that might take," he said.

Asked what would happen if the accused neither appealed nor paid voluntarily, he said the authorities would issue additional notices and then begin recovery under the Public Demands Recovery Act.

A first for Bangladesh

Bangladesh has never before attempted recovery on this scale. The first case under the new law emerged in 2023 when a Bangladeshi national was found to own undisclosed property in the UK.

The asset was identified through social media posts. The individual failed to provide a credible explanation and was issued a penalty equivalent to the property's value. Recovery remains pending as the case is still in court.

Experts say recovery won't be easy

Iftekharuzzaman, executive director of Transparency International Bangladesh (TIB), told TBS, "Even if the tax authorities collect taxes or fines, there must be measures to ensure that no one escapes accountability if money laundering is involved."

He added, "Those accused must be brought under trial in accordance with the Anti-Money Laundering Act. Under the law, proven money laundering can lead to fines up to three times the laundered amount, confiscation of domestic assets, and up to 14 years in prison. Therefore, the accused individuals and institutions should be investigated and prosecuted through the Commission and other relevant authorities."

A senior FCA at a leading chartered accountancy firm told TBS that credible documentation is crucial because any claim must be established on that basis.

"Recovery through legal channels will not be possible if proper documents for overseas assets are unavailable," he added.

He further said recovery will be unrealistic if the individual has no assets under their name in Bangladesh. He said the prospects are also limited if the local assets are mortgaged to a bank.

However, the former DG of the NBR's intelligence cell believes that if an asset is mortgaged, the government's claim should still take priority.

Mostafa Abid Khan, former member of the Bangladesh Trade and Tariff Commission, said it remains uncertain whether money laundering issues can be addressed through tax policy.

He questioned whether the tax department can impose penalties at market value simply because an overseas asset was not declared in local filings. He said the asset may not involve laundering, or foreign taxes may already have been paid.

Md Alamgir Hossain, former NBR member for tax policy, told TBS that every country has its own legal framework to deter money laundering. The law adopted in Bangladesh may act as a deterrent, discouraging people from laundering funds in future.