Kazi Zahidul Hasan
A section of businessmen have reportedly been involved with trade-based money laundering, taking advantage of the regulatory bodies’ laxity and poor oversight, sources said.
They said businessmen used to transfer a substantial amount of money abroad every year though banking channels showing inflated prices of imported capital machinery and goods. But the regulatory bodies have not yet been able to take preventive measures against such crimes.
A senior official of Customs Department, preferring anonymity, told The New Nation on Saturday that import of capital machinery has showed an unusual rise in the recent times when a lull in economic activities is prevailing in the country, indicating that the corrupt businessmen siphoning off money from the country using formal trade channels.
“Businessmen are altering the real values and prices of imported capital machinery and goods via over invoicing and thus help them in sending money abroad though banking channel,” he added.
The official further said a section of businessmen involved in under-reporting the value of their imported goods and thus depriving the government of huge revenues.
When asked, he said, the Customs Department is yet to develop a transparent, coherent and fully integrated valuation system of imported capital machinery and goods to check on over and under invoicing due to lack of adequate manpower, technical know-how and logistics.
“Indifference among the agencies concerned is also hampering the efforts of preventing the trade-based money laundering,” he added.
According to an official figure released by Bangladesh Bank (BB), the country’s overall import payment in last fiscal year (2014-15) increased by only 3.0 per cent but the payment for capital machinery imports soared by around 23 per cent.
The BB data showed that despite lower growth in overall import payment, the LC settlement for capital machinery imports increased by 22.97 per cent to $3.09 billion in FY15 from that of $2.52 billion in FY14.
The LC settlement for industrial raw material imports, however, increased by only 3.10 per cent to $15.18 billion in FY15 from that of $14.72 billion in the previous FY.
“Money laundering by the businessmen through formal trade channel is a global phenomenon. It is also happening in our country,” former BB governor Dr Salehuddin Ahmed told The New Nation on Saturday.
He said businessmen have reportedly been transferring huge fund abroad through banking channel by applying the technique of under-and over-invoicing while importing capital machinery and goods.
When asked, Dr Salehuddin Ahmed said, the sudden rise in capital machinery import raised further suspicion that the intensity of such trade-based money laundering is on the rise.
“The issue needs immediate attention from the regulators, including the central bank, otherwise, such a crime would leave significant implication on the national economy,” he warned.
The former BB governor suggested a number of practical steps to be taken to improve the capacity of regulatory bodies to address the threat of trade-based money laundering.
These are: training programmes of concerned officials to better identify trade-based money laundering techniques, effective information sharing among the authorities at the national level, and mutual assistance agreements to strengthen international cooperation. “Establishment of a valuation database and modernisation of Customs Department with adequate investment in information technology can also help reduce the trade-based money laundering,” he added.
When asked, M Mahfuzur Rahman, a spokesperson of BB told The New Nation that a section of businessmen might be involved in money laundering through under and over invoicing at import and export level. “Preventing such illegal practice is the task of Customs Department. It is not the jurisdiction of the central bank,” he added.
He, however, said that the central bank is working sincerely to trace the cases of money laundering in banking channel.
“We have already intensified our surveillance and monitoring on the banks so that BB can prevent money laundering through banking channel,” he added.
Regarding the sudden rise in capital machinery import, M Mahfuzur Rahman said, increase in such import may not the cause of trade-based money laundering, it is on the rise due to recovery in business climate resulted from renewed political stability in the country.
