A six-point combat is ahead to curb trade-based money laundering amid reports on flight of huge funds from Bangladesh, especially through suspected over-and under-invoicing and misdeclaration.
Sources have said customs intelligence has crafted the action plan of late and recommended for the revenue authority to launch the crackdown as part of moves to rid the country of financial crunch, particularly forex dearth.
Trade-based money laundering through specific nine types of tactics "goes unabated in absence of effective mechanisms" to thwart the practice, officials said.
Under-and over-invoicing, concealment of customs declaration, forgery of export documents, showing fake export, irregularities in export of products by the industries enjoying duty-free benefit under bonded-warehouse schemes have been spotted as major ways of money laundering through trade, says a customs intelligence report.
The customs intelligence wing of the National board of Revenue (NBR) has found out gross irregularities in taking cash incentives by showing "fake and false exports".
To check the bungling in business, the Customs Intelligence and Investigation Directorate (CIID) recently sent the six-point recommendations to the government's revenue authority.
The recommended actions, put forward by Director-General of the CIID Md Fakhrul Alam, include detecting the vulnerable exporting companies and issuing export approval after scrutiny of authenticity of their value of export goods and volume.
Issuing directives to the field-level customs offices across the country to act according has been suggested.
The CIID also suggests coordinated efforts of the NBR, the ministries of finance and commerce, Bangladesh Bank, Export Promotion Bureau, Bangladesh Trade and Tariff Commission (BTTC) and other relevant entities to determine the modalities of action.
Currently, the government provides 1.0-to 20-percent cash incentives against merchandise exports.
In the report, the customs intelligence has cited several cases detected in 2022 and 2021 for suspicious attempt of money laundering.
As reported by the intelligence, ZEE Fashion Trading Export and Import showed weight of each T-shirt ranging from 1.34 to 4.10 kilograms in its seven Bills of Export (B/E) on February 16, 27 and 28 in 2023 and on March 21, September 21, November 28, and December 8 in 2022.
"Generally weight of each T-shirt does not exceed 400 grams but the company shows higher weight," says the CIID about the one case of what it detects as over-invoicing.
On the other side of the two-pronged tool, the declared value of per-piece T-shirt was shown "abnormally low" at some $0.11 to 0.26 in the B/Es.
Considering value of inputs, production cost, price of each T-shirt usually range from 2.0 to 3.0 dollars.
It also mentions Sagar Jute Diversified Industries that declared export of doormat and table-runner (diversified jute products) in two shipments under bills of entry submitted on April 3, 2022. Through physical inspection, customs found 11,884 pieces or 2,068kg higher volume of export declared by the company.
The company was supposed to receive cash incentives at 20 per cent to Tk 1.6 million and Tk 98,376 against its export receivables worth Tk 8.0 million and Tk 8.4 million respectively.
Aluminum ingots exporter Terracotta Trading, in a bill of export dated March 24, 2021, showed 20,110-kg higher volume of export. It was supposed to receive cash incentives worth .03 million against its export proceeds worth Tk 2.5 million.
"The companies declared higher than the actual value," says the report.
Also, the CIID detected 'fake' exports by Ahnaf Corporation with some 111 BEs followed by Jannat Corporation with some 175 and Fatema Corporation some 68. The companies have received cash incentives worth around Tk 170 million showing the export proceeds.
Customs found none of the products having ever entered the port or off-docks for export.
Alleged abuse of bonded-warehouse facility by Piangka Fashion, Showan Knit Composite has been detected with possible amount of cash incentives worth 0.8 million at a rate of 4.0 per cent received.
"By showing 'fake' export certificates, Sabiha Saiki Fashion, Asia Trading Corporation and Emu Trading Corporation siphoned off Tk 7.23 billion," says the report on customs findings.
The companies exported finished goods while declared consignments of samples. The customs found T-shirt, tops, ladies' dress in packages of samples through physical inspection.
Sagar Jute Diversified Industries exported less than its declared volume of jute napkin in three BEs on April 4, 2022. Cash incentives worth Tk 4.7 million at a rate of 20 per cent was taken, the CIID report says.
Golondaz Consortium and Line, S.R Fashion and Design Garden Knitwear allegedly declared less than its actual exports.
A senior customs official says these cases are only the "tip of an iceberg of a massive trend of money laundering from the country by using the tactics".
Other recommendations of the CIID include fixation of category-wise minimum export-value considering value of raw materials, wages, expenditures in factory, relevant production cost.
Also recommended are crosschecking of details of export products and its volume, by bank officials, export-permit issuers, before issuance of permit to verify actual declared value of products.
Taking legal action against the individuals and companies, and also customs officials, found involved in money laundering, and examination or assessment of the products are also among the dos.
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