Over US$49.65 billion has gone out of Bangladesh through trade-based illicit financial flows (IFFs) only in six years, according to an international watchdog’s findings on the money laundering between 2009 and 2015.
The Global Financial Integrity (GFI) in its latest report, published on December 16, calculates the country figure from the value gaps caused by misinvoicing in trade between 134 developing countries and all of their global trading partners.
A USA-based think-tank, GFI also documented around $1.6 trillion worth of value gaps identified in trade between 134 developing countries and all of their global trading partners in 2018–the most recent year for which comprehensive data are available. However, the GFI report didn’t include trade-misinvoicing data of Bangladesh on the years 2014, and 2016 to 2018 for unavailability of sufficient annual trade data of the country to different international organizations.
“There are two major reasons behind the trade-based money laundering from the country – skill and capacity gap of the government to spot under-and over- invoicing that aim to launder money, and the people involved in money laundering are powerful and maintain close ties with the government,” says Transparency International Bangladesh (TIB) executive director Dr Iftekharuzzaman.
He notes that though the government and its relevant departments don’t strongly recognise trade-based money laundering, it has been one of the major ways to siphon off money from the country apart from other means.
“The government authorities dealing with revenue collection, indentifying illegal money flow, and punishing the money-launderers are ill-equipped to trace and prevent illegal transfer of funds using modern technology,” he said.
“So, skill and capacity development of government institutions and political commitment are required to prevent the trade-based money laundering,” Dr Zaman suggests.
Centre for Policy Dialogue (CPD) Distinguished Fellow Professor Mustafizur Rahman says though the GFI report lacks latest money-laundering data on Bangladesh, some of the recent disclosures from government agencies and media reports indicate that money laundering is on the rise.
He mentions that the government has established Transfer Pricing Cell (TPC) under the National Board of Revenue (NBR) to ensure tax compliance in relation to cross-border transactions, but the unit hasn’t been provided with sufficient and skilled workforce and required budget.
