Special Correspondent :
Trade misinvoicing has become a major means of moving money illicitly out of the country in absence of effective measures by relevant government agencies causing huge loss to the national economy, say analysts.
They said, the country’s political and economic environment has long been conducive to money laundering, besides corruption, inefficient regulation and improper enforcement of law further intensifying the crime under the cover of trade misinvoicing.
Bangladesh has experienced an illegal financial outflow of US$ 5.9 billion through trade misinvoicing in 2015, according to a recent report by Global Financial Integrity. The report ranks Bangladesh as one of the top 30 countries in terms of illicit financial flows.
“Trade-based money laundering continues to be a growing concern to the Bangladesh economy as large funds flowing out the country every year by this illegal means causing big harm to the national economy,” former Finance Adviser of the Caretaker Government Dr A B Mirza Azizul Islam told The New Nation yesterday.
He said, money is effectively laundered through international trade. But the regulators are largely indifferent in preventing the crime.
“Trade-based money laundering mostly takes place in collusion with manufacturers and export and import firms. A concerted effort of relevant agencies can help prevent the illegal nexus. Besides, the regulators should tighten their belts by enhancing surveillance on vital areas like scrutinise customers, documentation, transactions, payments and shipments to curb the instances of trade misinvoicing,” he added.
When asked, Dr A B Mirza Azizul Islam, said, money laundering from the country takes an ‘alarming turn’ and if the crime goes unchecked, it will have a disastrous impact on the economy.
“Export and import firms are laundering huge fund every year through under and over invoicing. But the regulatory bodies are yet to come up with effective measure to check the routes posing a potential threat to the economy,” former Bangladesh Bank governor Dr Salehuddin Ahmed told The New Nation
He said the blame also lies partly in the sophistication of money launderers, who employ a multitude of methods to make their earnings appear legitimate.
“Companies use banking system to launder money through trade misinvoicing and banks are often unknowingly facilitating these illicit activities in absence of effective oversight,” observed Dr Salehuddin Ahmed.
He also said that the central bank should forced the banks to properly follow the banking regulations and due diligence of the customers and firms involved in the international trade. Besides, they should continuously check banking data relating to fund transfers and import and export payment by the business firms to detect the cases of money laundering.
“Bangladesh Bank should also take pro-active measure to properly investigate suspicious transactions of trading houses with the help of other government agencies. All these measures may have significant impact on checking routes of trade-based money laundering.”
Dr Salehuddin Ahmed also stressed the need for coordinated efforts of concerned regulatory bodies, including Bangladesh Bank (BB), the Anti-Corruption Commission (ACC) and the National Board of Revenue (NBR), to effectively act against the trade-based money laundering.
“A coordinated effort among the relevant government agencies is a must to prevent the illegal capital outflow through trade-misinvoicing,” he added.
Expressing concern over the rising trend of illicit financial outflow, Dr Salehuddin Ahmed said, “The economy will suffer in the long run if the government fails to arrest this phenomenon.”
A staggering amount to the tune of $16.77 billion has been flown out of the country in 10 years from 2002 to 2011 through illegal money transfer, according to an earlier report by the GFI.
