PMO orders closure of liaison office of a foreign buying house
Thursday, 20 August 2009
Nazmul Ahsan
The Prime Minister's Office (PMO) has ordered immediate closure of a liaison office of foreign buying house in Dhaka due to the latter's alleged involvement in money laundering, tax evasion and non-compliance with foreign currency transaction rules.
The PMO also instructed the Ministry of Foreign Affairs to blacklist 23 foreign nationals, involved with the liaison office of the buying house, named Titanus SA, until recently, and restrict their further entry into the country.
The nationals hailing from Italy, Russia, Bulgaria and China, have recently fled Bangladesh after sensing the possible government's crackdown against them, said the order issued by the PMO.
The Titanus SA Bangladesh liaison office is the representative of Teddy -SPA, an Italian company, operated in the country illegally between 2002 and 2005 before receiving permission from the BoI in 2006, according a report prepared by a government intelligence agency.
The PMO also suggested the Bangladesh Bank to strengthen its monitoring over all foreign liaison offices operating in the country through foreign exchange inspection and vigilance department to ensure transparency in their operations.
More than 100 foreign buying houses have been operating in the country. The buying houses often take the local apparel exporters hostage and force them to pay higher rate of commission and penalty from their export receipts, exporters said.
Besides, a large number of foreign workers are serving in those foreign liaison offices without valid documents such as visa, work permit and permission to set up office here, thanks to lack of monitoring by the government agencies concerned, particularly the home ministry, sources in the industries ministry said.
The PMO asked the foreign ministry to take necessary actions to blacklist the foreign nationals and underscored the need for conducting proper scrutiny by Bangladesh missions abroad at the time of issuing visas.
Citing the intelligence report, the PMO said Titanus had brought a large amount of foreign currency from abroad illegally to bear the expenses of its liaison office in Dhaka defying the instruction of the BB.
Titanus-SA, after carrying out its unauthorized operations between 2002 and 2005, applied for government's permission in 2006.
The company after getting the permission from the Board of Investment (BoI) never complied with foreign exchange regulations, provisions for submission of annual tax returns and payment of income tax and advance income tax against income, staff salaries and house rent, the report said.
'All foreign nationals including 12 Italians have recently fled the country as a number of cases were lodged against them with different police stations in Dhaka and Gazipur,' said the report.
The foreign nationals working with the liaison offices had no valid work permit, the report added.
The foreign buying house did not bring any foreign exchange through official channel to bear the expenses of its office as it is mandatory for any liaison office to bring foreign exchange from its parent office to bear local expenses, said the intelligence report.
The liaison office took about $ 1.6 million from a number of garments exporters as penalty, which is illegal under the prevailing system, the report said further.
A number of garments-Toha garments, Three A Fashion Ltd and Kaisar knitwear ltd, are the victims of the liaison office. They have lodged cases with Ashulia and Joydevpur police stations against the buying house in question, the report said.
The Prime Minister's Office (PMO) has ordered immediate closure of a liaison office of foreign buying house in Dhaka due to the latter's alleged involvement in money laundering, tax evasion and non-compliance with foreign currency transaction rules.
The PMO also instructed the Ministry of Foreign Affairs to blacklist 23 foreign nationals, involved with the liaison office of the buying house, named Titanus SA, until recently, and restrict their further entry into the country.
The nationals hailing from Italy, Russia, Bulgaria and China, have recently fled Bangladesh after sensing the possible government's crackdown against them, said the order issued by the PMO.
The Titanus SA Bangladesh liaison office is the representative of Teddy -SPA, an Italian company, operated in the country illegally between 2002 and 2005 before receiving permission from the BoI in 2006, according a report prepared by a government intelligence agency.
The PMO also suggested the Bangladesh Bank to strengthen its monitoring over all foreign liaison offices operating in the country through foreign exchange inspection and vigilance department to ensure transparency in their operations.
More than 100 foreign buying houses have been operating in the country. The buying houses often take the local apparel exporters hostage and force them to pay higher rate of commission and penalty from their export receipts, exporters said.
Besides, a large number of foreign workers are serving in those foreign liaison offices without valid documents such as visa, work permit and permission to set up office here, thanks to lack of monitoring by the government agencies concerned, particularly the home ministry, sources in the industries ministry said.
The PMO asked the foreign ministry to take necessary actions to blacklist the foreign nationals and underscored the need for conducting proper scrutiny by Bangladesh missions abroad at the time of issuing visas.
Citing the intelligence report, the PMO said Titanus had brought a large amount of foreign currency from abroad illegally to bear the expenses of its liaison office in Dhaka defying the instruction of the BB.
Titanus-SA, after carrying out its unauthorized operations between 2002 and 2005, applied for government's permission in 2006.
The company after getting the permission from the Board of Investment (BoI) never complied with foreign exchange regulations, provisions for submission of annual tax returns and payment of income tax and advance income tax against income, staff salaries and house rent, the report said.
'All foreign nationals including 12 Italians have recently fled the country as a number of cases were lodged against them with different police stations in Dhaka and Gazipur,' said the report.
The foreign nationals working with the liaison offices had no valid work permit, the report added.
The foreign buying house did not bring any foreign exchange through official channel to bear the expenses of its office as it is mandatory for any liaison office to bring foreign exchange from its parent office to bear local expenses, said the intelligence report.
The liaison office took about $ 1.6 million from a number of garments exporters as penalty, which is illegal under the prevailing system, the report said further.
A number of garments-Toha garments, Three A Fashion Ltd and Kaisar knitwear ltd, are the victims of the liaison office. They have lodged cases with Ashulia and Joydevpur police stations against the buying house in question, the report said.