Misuse of warehousing facilities

At a seminar on "Increasing the cost of doing business", organised recently by the Dhaka Chamber of Commerce and Industry (DCCI), the chairman of   the National Board of Revenue (NBR) accused the businessmen of misusing the bonded warehouse facilities. He said that if the loss of revenue on this account could be plugged, the government could construct two Padma bridges in a single year. He did not elaborate about the revenue loss, but the Bridges Division has recently revised the cost of the Padma Bridge construction to around Tk 280 billion (Tk 28,000 crore). Perhaps this may give an idea of the magnitude of the cost of the alleged misuse of bonded warehouse facilities.
Md. Nojibur Rahman, the NBR chairman, said that a large portion of the imported goods that should remain inside the bonded warehouses find their way to wholesale markets in Islampur in old Dhaka. The allegation is not new but what is new is the magnitude of this illegal operation.
The NBR chairman, however, did not mention that all warehousing facilities are manned by designated officials from the customs authorities to oversee that the warehouse operations conform to normal laws and regulations. Despite such practices of safeguard if the businessmen are indulging in such alleged malpractices they have to have an accomplice. After all, it takes two to tango. The government officials deputed to these jobs are alleged to receive special allowances from the warehouse owners.
This brings us to the issues of governance and accountability. Assuming that the allegations are correct and the NBR chief is within his right to raise this unpalatable truth in public, has he taken the pain to see how the customs officials perform their jobs? Could the businessmen do it without indulgence from officials?
The government provides bonded warehousing facilities to businessmen to import dutiable raw materials and store them in warehouses without paying duty for export-oriented industries as the materials are to be used for manufacturing goods for re-export such as readymade garments.
The NBR chairman has also dropped another quite unexpected and shocking bombshell at the DCCI meeting.  He said, China is the biggest source of import for Bangladesh and customs records say goods worth $8.0 billion were imported from China last year. However, he quoted the Chinese authorities as saying that they exported goods worth $12 billion during the same period. Now his question was: "Where has $4.0 billion gone?" He dropped a broad hint that informal trade between them may be responsible for this.
It is said that informal trade (read smuggling) between India and Bangladesh accounts for about $2.0 to $3.0 billion. Such a large informal trade may be explained because of having thousands of miles of porous border between them.
But coming to Bangladesh-China trade, there is no common border between the two countries and any smuggling of goods from one country to another has to go through a third country. In our case, we have borders with India all around us and a small border with Myanmar. No one can sensibly suggest that such a huge amount of informal trade could be transacted via Indian and Myanmar territories.
One may, however, get a clue from newspaper reports about the laxity of customs practices at our ports of entry - containers full of goods get away without paying normal taxes and duties because of false declarations shown. Those who are to strictly watch such misdeeds are allegedly 'managed'. Besides, illegal unloading of containers full of goods at the outer anchorage by rogue shipping companies can also be held responsible for such predicaments. But the question is: How could this happen in the full glare of multiple agencies working to prevent such practices?  
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