Kazi Zahidul Hasan :
Bangladesh’s overall import rose sharply by over 27 per cent during July-November period of this fiscal even though in a sluggish investment climate is there raising eyebrows from knowledgeable quarter.
They voiced concern of an unabated money laundering in an election year under the cover of rising trade misinvoicing.
A Bangladesh Bnak (BB) official told The New Nation yesterday that import is increasing at an unusual rate since the beginning of current fiscal year when entrepenours imported huge industrial raw materials and capital machiney even opening letter of credits (LC’s) under shady accounts of business firms.
“No doubt the import has picked up. But the concern grows as it does not reflect in the investment front. If the soraing imports channeled perperly through investment why so many people are unemployed?
he questioned. It needs to be investigated what is behind the abnormal import rise.”
Opening of LCs for import of capital machineary and industrial raw materials rose by 34.57 per cent and 15.12 per cent respectively during the July-December period of the current fiscal, according to a BB figure.
When asked, former finance adviser to a caretaker government Dr AB Mirza Azizul Islam said the increase in import means increased investment in the country. If the investment increases, the economy is dynamic. But the investment is not visible in that way. Therefore, it should be examined whether the money is being laundered through under import invoicing.
“Trade-based money laundering is particularly active in Bangladesh given the large size of underground economy. Risk of illicit financial flow remains high in an election year as evident in previous election years,” he added.
Dr AB Mirza Azizul Islam, however, highlighted the constrains of the regulatory bodies to curb the illicit financial flow saying they are yet to devise methods to pinpoint the destination of black money or how the funds are laundered.
“Overall investment remains subdued for the last few years taking a heat from energy crisis, infrastructure bottleneck and political uncertainty.
In this context, a sharp rise in the import has raised concerns of money laundering though trade channels,” said economist Dr Zahid Hussain.
He also said import soared when the local currency is losing ground against the greenback, making import costlier. The regulators should keep a vigil on import due to unabated concerns of money laundering.
According to some estimates, trade misinvoicing accounts for 80 percent of illicit outflows of money from Bangladesh.
Terming the current pattern of import ‘nefarious,’ economist Dr Ahsan H Mansur said, “It is rising at a time when investment demands are not buoyant given the current political uncertainty. As investment is not picking, it creates huge black money on the economy. Dishonest businessmen may be laundering the money taking advantage in a wobbly regulatory regime ahead of the next election.
“High import is being used as a ‘mask’ to generate and transmit of illicit financial flows, particularly if the customs and other enforcement agencies are not alert to prevent the crime,” he added.
In cases of suspicion, Dr Ahsan Mansur said regulators must check with the customs authority of the country of origin as to the accuracy of information provided in the import declaration. The unit value and deviation of unit value from arms-length world prices must be calculated. Any significant deviation should be investigated to detect money laundering.
Bangladesh’s overall import rose sharply by over 27 per cent during July-November period of this fiscal even though in a sluggish investment climate is there raising eyebrows from knowledgeable quarter.
They voiced concern of an unabated money laundering in an election year under the cover of rising trade misinvoicing.
A Bangladesh Bnak (BB) official told The New Nation yesterday that import is increasing at an unusual rate since the beginning of current fiscal year when entrepenours imported huge industrial raw materials and capital machiney even opening letter of credits (LC’s) under shady accounts of business firms.
“No doubt the import has picked up. But the concern grows as it does not reflect in the investment front. If the soraing imports channeled perperly through investment why so many people are unemployed?
he questioned. It needs to be investigated what is behind the abnormal import rise.”
Opening of LCs for import of capital machineary and industrial raw materials rose by 34.57 per cent and 15.12 per cent respectively during the July-December period of the current fiscal, according to a BB figure.
When asked, former finance adviser to a caretaker government Dr AB Mirza Azizul Islam said the increase in import means increased investment in the country. If the investment increases, the economy is dynamic. But the investment is not visible in that way. Therefore, it should be examined whether the money is being laundered through under import invoicing.
“Trade-based money laundering is particularly active in Bangladesh given the large size of underground economy. Risk of illicit financial flow remains high in an election year as evident in previous election years,” he added.
Dr AB Mirza Azizul Islam, however, highlighted the constrains of the regulatory bodies to curb the illicit financial flow saying they are yet to devise methods to pinpoint the destination of black money or how the funds are laundered.
“Overall investment remains subdued for the last few years taking a heat from energy crisis, infrastructure bottleneck and political uncertainty.
In this context, a sharp rise in the import has raised concerns of money laundering though trade channels,” said economist Dr Zahid Hussain.
He also said import soared when the local currency is losing ground against the greenback, making import costlier. The regulators should keep a vigil on import due to unabated concerns of money laundering.
According to some estimates, trade misinvoicing accounts for 80 percent of illicit outflows of money from Bangladesh.
Terming the current pattern of import ‘nefarious,’ economist Dr Ahsan H Mansur said, “It is rising at a time when investment demands are not buoyant given the current political uncertainty. As investment is not picking, it creates huge black money on the economy. Dishonest businessmen may be laundering the money taking advantage in a wobbly regulatory regime ahead of the next election.
“High import is being used as a ‘mask’ to generate and transmit of illicit financial flows, particularly if the customs and other enforcement agencies are not alert to prevent the crime,” he added.
In cases of suspicion, Dr Ahsan Mansur said regulators must check with the customs authority of the country of origin as to the accuracy of information provided in the import declaration. The unit value and deviation of unit value from arms-length world prices must be calculated. Any significant deviation should be investigated to detect money laundering.
