The country lost $ 8.27 billion annually on average between 2009 and 2018 due to the mis-invoicing of the value of goods imported and exported by traders to evade taxes and move money illegally across borders. international, Global Financial Integrity (GFI) said on Thursday.
The average loss of customs and taxes was 17.3 percent of Bangladesh’s trade with all of its trading partners during those years, the IFM said in its latest report, “Trade-related illicit financial flows in 134 countries in development 2009-2018 “.
The Washington-based think tank did not provide data on bogus commercial invoicing in Bangladesh after 2015.
The report comes at a time when illegal money transfers through various channels, including under-invoicing and over-invoicing of internationally traded goods, are said to be rampant in the country due to alleged collusion. between customs officers and dishonest traders.
The GFI report did not have annual data on Bangladesh for 2014, 2016, 2017 and 2018.
The Daily Star emailed GFI’s communications coordinator Lauren Anikis to explain the reason. No response came until this report was tabled last night.
Last year, in a response to an email from the Daily Star, Maureen Heyd, GFI communications coordinator, said she was unsure why reports to UN Comtrade for Bangladesh had been dropped in recent years. years. âThis is unfortunate, as it limits our ability to investigate illicit activities in the Bangladeshi trade,â the response said.
During the period 2008-2017, Bangladesh’s average annual loss from false commercial invoicing was $ 7.53 billion, according to the previous report by GFI, which also did not have data on Bangladesh for 2014, 2016. and 2017.
The GFI report estimated $ 1.6 trillion in potential false trade invoices between 134 developing countries. Of that amount, $ 835 billion in potential bogus trade invoices took place between developing countries and 36 advanced economies in 2018.
Among South Asian countries, Bangladesh lost the third highest amount due to false commercial invoicing. India lost the highest amount, $ 67.49 billion, followed by Pakistan – $ 8.5 billion – per year between 2009 and 2018.
The GFI report contains data for India for all years. In the case of Pakistan, no data was available for the year 2018.
In percentage terms, the average loss due to bad commercial invoicing was 19.8 percent of India’s total trade, Nepal’s 20.2 percent.
GFI President and CEO Tom Cardamone said that at a time when developing countries are scrambling for every penny to fund vaccines and drugs to fight Covid-19, billions of dollars in rights and taxes are not collected.
“It’s absolutely shocking …” he said.
The report says that false commercial invoicing is a persistent problem in developing countries, leading to potentially massive revenue losses and facilitating illicit financial flows across international borders.
He said false commercial invoicing occurs when importers and exporters willfully falsify the declared value of goods on invoices submitted to customs authorities.
This allows traders to illegally move money across international borders, evade taxes and / or tariffs, launder the proceeds of criminal activity, bypass currency controls and hide profits. in offshore bank accounts.
GFI said it looked at official trade data reported to the United Nations to identify value gaps, or mismatches, in the data regarding what two countries reported on their trade.
Towfiqul Islam Khan, a senior researcher at the Center for Policy Dialogue (CPD), said government authorities, especially the Bangladesh Financial Intelligence Unit (BFIU) and the National Board of Revenue (NBR), should implement the measures that they wanted to take it earlier in order to fight against money laundering and bad commercial invoicing.
He said the BFIU had previously developed an anti-money laundering strategy and was planning to take a number of steps.
“We have not seen the implementation of the initiatives,” he said, adding that the NBR should make public the measures it decided to take earlier to prevent the illegal transfer of money through the foreign trade channels.