Money laundering via fake import papers -The Asian Age
Mammoth sums of money are being laundered to foreign countries from Bangladesh under cover of imports, relevant sources have informed. Letters of credit (LC) are being opened in banks but the goods named on the documents are not being imported.
Rather rejected metals, rods, cement, rice, lentil and other cheap materials have been found inside containers several times instead of the products named on import-related papers.
Money launderers most of the time utilize false shipment papers, fabricated invoices and erroneous letters of credit for conducting illegal money transfer.
In this way 6 lakh crore taka has been laundered to overseas destinations reportedly during last ten years. Economists and financial think-tank have over and over again urged the regulatory institutions to dismantle this racket but no effectual move has been yet executed by the authorities concerned.
Bangladesh Bank and Customs Intelligence and Investigation Directorate have found several fake bills of entries and other forged import-associated documents which are frequently used for money laundering, financial sources have reported.
The central bank has allegedly found anomalies with the letters of credit opened in a number of banks which are Basic Bank, Bangladesh Commerce Bank, Social Islami Bank, Al Arafah Islami Bank, Dhaka Bank, Standard Bank, City Bank, Premier Bank and National Bank.
Allegations show that some business organizations are affiliated with these suspicious letters of credit such as Beximco Fashion, Fiaz Enterprise, Agri Economy Bangladesh, Gardenia Corporation, Intramex Textile, Agro BD, AB Corporation, Aramit Thai Aluminium, SR Metal Industries, Yasir Enterprise and Sheba Enterprise. The central bank has reportedly told all banks not to allow these companies to open new letters of credit until further orders.
Financial experts have said that an influential flock of money launderers have been transferring big amounts of money from Bangladesh to other countries in unauthorized ways but the masterminds of this illegal trade have not yet faced any actions.
Economic scholars have blamed the extensively augmenting figures of defaulted loans as one of the major reasons behind money laundering. Bangladesh Bank's Governor Fazle Kabir has gone through severe resentment from economists and prominent citizens for this reason. The recent gold scam in Bangladesh Bank has further downgraded the credibility and esteem of the central bank and its chief, sources from banking administration have said.
Some politicians and intellectuals have meanwhile called upon the government to dismiss Finance Minister AMA Muhith for the ongoing financial havoc throughout banks. Import costs have abnormally increased in recent times. The central bank's reserve has come under pressure due to the payment of excessive import bills. Trade deficit has crossed all past records too. Economic analysts have termed these things as irreversible perils for the country.
Investments and employment are not showing any healthy signs though imports have mounted which is very unnatural and ominous according to financial scholars.
Reliable sources have said that Beximco Fashion has opened letters of credit of 36 lakh dollars in Janata Bank from January last year till April this year. 36 lakh dollars are equal to almost 30 crore 24 lakh taka. Import bills have been meanwhile paid but Beximco has not yet shown any documents to Janata Bank to prove that the imported products have arrived in the country.
Bangladesh Bank has already sent letters to Janata Bank on this issue. Bangladesh Bank decided to fine Janata Bank 10 lakh taka in this connection though the monetary penalty was waived in Bangladesh Bank's board meeting later on. However, Salman F Rahman, Vice Chairman of Beximco Group has denied these allegations. He has said that all necessary papers have been submitted to the bank.
Banking sources have stated that SA Traders opened letters of credit of 1 crore 50 lakh taka in Basic Bank, Gulshan branch but no goods were imported to Bangladesh against the LC though money has been sent abroad from the bank.
Fiaz Enterprise and another 16 companies have allegedly transferred 177 crore taka to foreign addresses in the same way from Gulshan and Shantinagar branches of Basic Bank. Basic Bank's officials have said that they are not being able to find those clients now.
AB & D Corporation opened an LC of 8 crore taka in January last year in a state-owned bank for importing industrial machineries. Afterwards rejected metals were found inside the container of this company instead of industrial machineries reportedly.
Discarded rods and cement were found inside the imported containers of some more companies. SS Corporation has imported lentil in the name of importing industrial equipment. Approximately 175 crore taka was transferred abroad in this way in light of allegations. Last year sand was found inside the imported container of Agro BD according to commercial sources.
Agri Economy Bangladesh opened an LC of 6.5 crore taka in a government bank in 2015 to import cold storage instruments from India but no such products in actuality were brought into the country within the given timeframe.
International Chamber of Commerce (ICC), which is an organization of business assemblages from all parts of the world, recently unfolded that Bangladesh has made a world record in 2017 by opening the highest number of letters of credit (LCs). Such an enormous number of LCs is totally unnatural and suspicious according to economists.
Former finance adviser to caretaker government Dr. Mirza Azizul Islam said to The Asian Age, "Allegations about doubtful import papers have been coming up from some angles for a few years. Fake import papers have all the likelihood to be connected with money laundering. Money laundering will continue to rise if firm actions are not taken right now. All import-related papers need to be verified rigidly."
Dr. Zahid Hossain, Lead Economist, World Bank, Bangladesh Office told The Asian Age, "In most cases people transfer money to foreign countries when domestic political stability is at risk. Capital flight also increases due to absence of investment-friendly atmosphere.
Trade deficit has meanwhile reached around 11 billion dollars. Bangladesh Bank and National Board of Revenue (NBR) have the authority to keep surveillance on all banks but it is unfortunate if institutions like the central bank and NBR come under the influence of commercial banks."
Dr. Iftekharuzzaman, Executive Director, Transparency International Bangladesh (TIB) said to The Asian Age, "Continuous money transfer to overseas locations without appropriate documents is an inevitable mark of corruption. The authorities cannot stop these scams without establishing accountability and good governance."