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NBR sets all wings to combat money laundering

Probe authority expands amid rising cases of capital flight

Doulot Akter Mala | March 08, 2018 00:00:00

Watchdogs of all wings of the National Board of Revenue (NBR) are now set to sniff out money-laundering offences, as limited probe authority proved insufficient.

Officials said the revenue board now opened up the scope of investigation by empowering all of its wings, including income tax, VAT and customs, to deal with a rising incidence of his financial crime.

Earlier, the investigation authority in such cases of pecuniary offences was confined to its Central Intelligence Cell (CIC).

In an order, dated March 5, 2018, the NBR cancelled its previous order which had only authorised the CIC to conduct investigation into money laundering.

Officials said the previous order, dated October 02, 2016, was against the provision of the Money Laundering Act.

The Customs Intelligence and Investigation Directorate (CIID), during the last one year, had persuaded the NBR to do away with the order.

"As the previous order was not consistent with the Section 2 (Tha) (Aa) of the Money Laundering Prevention Act 2012', the NBR scrapped the letter regarding investigating authority," says the latest order.

The board's administration member, S.M Ashfaq Hussain, dispatched the order to the VAT, customs, income tax and all other relevant offices across the country.

"The money laundering-related investigation and other steps would be taken by the NBR wings concerned -- income tax, VAT, customs or CIC -- which would detect the offence," the NBR letter reads.

In case of request from other entities, excepting the NBR, for investigating a money-laundering case that was detected by the latter, the NBR will hand over investigation authority to its wings as per relevance of the case.

As there was inconsistency between NBR's previous order and the Money Laundering Prevention Act, the CIID has continued investigation into cases of this financial offence despite the NBR letter having given the authority only to the CIC.

However, officials said the CIC was yet to develop its capacity to deal with the money-laundering cases alone on part of the NBR.

Talking to the FE, Dr Moinul Khan, former Director-General (DG) of the CIID, who is now commissioner at the Customs Valuation and Internal Audit (CVIA) Commissionerate, said the CIID investigated 15 such money cases successfully following the money laundering act. The investigations are about to complete.

"The money laundering act decentralised the investigating authority to create more scope of investigating trade-based money laundering," he added.

The CIID is also carrying out dozens of more investigations on money laundering, he said.

The directorate also filed money-laundering cases and took action against Apanjewelers' owners and businessman Musa Bin Shamser successfully, he added.

Earlier, only the Anti-Corruption Commission (ACC) was the sole investigating authority on money laundering. Later, the government amended the act and empowered other entities, including Bangladesh Bank (BB) and the NBR, to investigate cases of money laundering.

Sources said the NBR had empowered CIC only, limiting the scope of investigation, although the money-laundering act decentralised the power for better investigation.

However, the decision created dissatisfaction among the CIID officials as it was conducting several cases under the money- laundering act.

The matter was placed before the customs and VAT association for perusal by the government high-up as the order was repugnant to the law.

An executive order of the NBR cannot defy the provision of the money-laundering act, officials argued.

Every relevant entity should have the authority to investigate money laundering as per their functional powers.

Officials said the CIC, having been empowered by the NBR, had carried out investigation into only one money-laundering case which is now stayed by the court.

Trade-based money laundering is one of the major concerns of Bangladesh in recent times, as various tricks of siphoning off money came to light.

Professor Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), said the tax authority can investigate the money-laundering cases in an integrated way to check trade-based money laundering through under-and over- invoicing.

"However, there should not be any harassment in the process," he added.

According to information carried out in different global reports, around 80 per cent of the money laundering or capital flight of Bangladesh is conducted through trade mispricing by under-and over-invoicing mechanisms, he said.

The NBR made the investigation process of money-laundering cases broad-based that would help easy detection of the offence, the economist noted.

The NBR also opened Transfer Pricing Cell that may also monitor the proper tax payment by foreign companies, he said.

According to a latest report of the Global Financial Integrity (GFI), a Washington-based research and advisory organisation, some $61.63 billion worth of capital had flown from Bangladesh between 2005 and 2014, riding mostly on misinvoicing.

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