In Bangladesh, longstanding political corruption, public-sector misconduct, and the widespread practice of bribery remain serious societal issues. Bribes are commonly demanded across various situations, both in the public and private sectors, posing challenges for businesses operating in the country. During internal audits of Bangladeshi subsidiaries, evidence often suggests that companies are compelled to make these payments to navigate operational hurdles.

The forms of payment vary, but cash transactions are particularly difficult to track. Cash payments obscure the details of transactions, leaving limited traceable evidence and complicating efforts to identify improper activity. The government has introduced measures such as digitalization and tax reforms aimed at restricting the deductibility of cash transactions to curb bribery indirectly. However, in fields like customs and business license renewals, bribes are frequently perceived as a necessity for progressing administrative matters, underscoring the depth of the issue.

The government has implemented reforms, such as digitalization and tax amendments that limit deductions for cash transactions, aiming to curb cash-based bribery indirectly. These efforts have contributed to a reduction in such practices, though it remains the case that, particularly in areas like customs and license renewals, business operations are often stalled without bribes.

Bangladesh is not ignoring the issue, especially as it seeks to encourage foreign investment. In 2001, following recommendations from international organizations (such as the IMF and World Bank), which highlighted the adverse impact of corruption on Bangladesh’s economic development and social trust, the government was urged to strengthen its anti-corruption measures. In response, the “Anti-Corruption Commission Act” was passed in 2004, establishing the Anti-Corruption Commission (ACC). The ACC holds the authority to address public and certain private sector corruption issues, especially regarding money laundering and illicit accumulation of wealth, and it also conducts educational and public awareness activities to prevent corruption. However, it often faces limitations due to the requirement of prior government approval for its actions, which restricts its independence and effectiveness.

Both domestic and international evaluations have raised concerns about the ACC’s operational limitations despite its formal independence. Government pressure, insufficient funding, and political influence are said to hinder its effectiveness. For example, investigations into high-ranking government officials require prior approval, and the ACC’s budget and scope of action are often inadequate, especially in handling large-scale corruption and asset recovery within the banking sector, according to Transparency International Bangladesh.

Moreover, the ACC has faced criticism internationally for its perceived political bias. Allegations suggest that it intensifies corruption accusations against opposition groups while appearing lenient in cases involving ruling party affiliates, raising concerns about its independence and impartiality. This perception undermines trust in the ACC and suggests it has not fully met expectations for unbiased anti-corruption efforts. Following a series of political changes in the summer of 2024, there is hope for a restructuring that will enable the ACC to function effectively. Reducing nationwide corruption and the demand for bribes from public agencies would significantly impact internal auditing practices. Our organization will continue to monitor developments closely and share updates accordingly.