FEID Circular Letter No. 01: Warning against enticing investment proposal from suspicious foreign person/firm

Foreign Exchange Investment Department Bangladesh Bank Head Office Dhaka.

Ref. No. FEID Circular Letter No. 01/2016 Date: 24 Srabon, 1423 Bangabda 08 August, 2016 AD

To the Head Office/Principal Office of all Authorized Dealer Banks engaged in Foreign Exchange Transactions.

Dear Sir,

Regarding caution against enticing investment proposals from suspicious foreign parties.

Entrepreneurs in Bangladesh often receive proposals for seemingly large, attractive foreign investments from parties that are not reputable and legitimate institutions licensed by the Central Bank/financial sector regulatory authority. They approach banks or government ministries/departments to obtain regulatory consent/approval/authorization regarding these proposals.

These fund supply proposals received from persons/institutions with questionable identities are generally incomplete and opaque in nature; from which it cannot be ascertained whether the proposed investment funds are not sourced from criminal or terrorist activities. In many cases, the main purpose of such enticing proposals is not investment, but rather to collect some money under the guise of initial expenses by tempting naive entrepreneurs with the promise of bringing in investment.

2. It would be appropriate to take steps to raise awareness and caution among the respective departments of banks, and among their entrepreneurial client parties, regarding the risk of being deceived or harmed by such enticing proposals. Verifying the authenticity of information regarding the identity, reputation, and legitimacy of the investment fund provider in investment proposals received by clients, and requesting complete information as necessary, will be important for this purpose. If the proposed investment mentions the involvement of a renowned bank/financial institution actively participating internationally in the procedural process, it is desirable to consider any subsequent steps only after confirming the authenticity of that from the said bank/financial institution. If a foreign investment proposal received by a local entrepreneurial client appears suspicious in the initial examination, banks must properly fulfill their responsibility to inform the client about this and provide advice on caution.

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-2- 03. We request you to appropriately inform the respective departments of all your regional and branch managers on this matter, and through them, your entrepreneurial client parties; and we also request you to inform this department about the measures taken within two weeks from the date of this letter.

Yours faithfully,

(A. N. M. Abul Kasem) General Manager Phone: 9530144 E-mail: feid@bb.org.bd