Is Bangladesh’s policy response to the growing e-commerce sector compatible with its commitment to fight predicate offences for money laundering?
| Date | 14 April 2023 |
| Pages | 520-531 |
| DOI | https://doi.org/10.1108/JMLC-01-2023-0023 |
| Published date | 14 April 2023 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Md. Zahurul Haq |
Is Bangladesh’s policy response to
the growing e-commerce sector
compatible with its commitment to
fight predicate offences for
money laundering?
Md. Zahurul Haq
School of Law, Universiti Utara Malaysia, Sintok, Malaysia
Abstract
Purpose –This study aims to investigate Bangladesh’s e-commerce regulations in light of the growing
criticism that they are insufficient to curb predicate crimes like fraud and money laundering in the online
marketplace.
Design/methodology/approach –This study used the exploratory design to examine the latest
ministerial directivesand laws governing e-commerce in Bangladesh to determine why they cannotprevent
fraudulentactivities in this promising sector and identify potentialsolutions.
Findings –Bangladesh’s regulatory responses to e-commerce fraud prevention anddetection are reactive
and inadequate.Regulators are unwilling and unable to enforce availablelegal provisions for various reasons,
includinga lack of knowledge and coordination among the agencies.
Research limitations/implications –This paper focusessolely on the legal and regulatory framework
in place to combat e-commerce fraud. Other critical issues, such as consumer rights, privacy and data
protectionin e-commerce, are not addressed.
Practical implications –The findings of this study will assist policymakers in revising current
regulatoryapproaches to e-commerce to protect this sectorfrom criminal abuse.
Originality/value –This study looked into the possibilityof using a proactive risk-based approach in the
e-commercesector, similar to what the Bangladesh FinancialIntelligence Unit does in the financialsector.
Keywords E-commerce, Bangladesh, Money laundering, Fraud, E-commerce policy
Paper type Research paper
1. Introduction
Between March and June 2021, 25 e-commerce platforms in Bangladesh were inundated
with orders totalling Taka 6,050 crore (approximately US$728.91m as of March 2021),
thanks to Ponzi-like swindles that enticed naïve buyers with substantial discounts. The
central bank detected the alleged scams during an investigation that also revealed the
enormous scope of fraud within the growing e-commerce sector in the country. Typically,
monthly transactions for this sector range from Taka Taka 500 to Taka 550 crore
(approximatelyUS$60.24–66.26m as of March 2021) (Uddin and Hasan, 2022).
Until March2021, Evaly –one of the e-commerce platforms involvedin the alleged scam –
owed its customers and suppliers around Taka 403.8 crore (US$48.65m as of March 2021)
while it held assets worth a total of over Taka 65 crore (US$7.83m as of March 2021) only.
Most of its customershad been waiting months for theirorders to arrive, and only a fraction
of them was offered reimbursements as a credit on the platform’s unlicensed digital wallet
JMLC
27,3
520
Journalof Money Laundering
Control
Vol.27 No. 3, 2024
pp. 520-531
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-01-2023-0023
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1368-5201.htm
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