Growing TBML concerns as Bangladesh’s foreign trade expands

Trade-based money laundering (TBML) is a growing concern for the Bangladeshi authorities and the country’s banks according to a recent survey.

The survey by the Bangladesh Institute of Bank Management (BIBM) says the issue is particularly serious in the context of the country’s rapidly expanding foreign trade.

Common typologies

The BIBM says TBML typologies commonly employed in Bangladesh include over- and under-invoicing of goods and services and the misdeclaration of goods.

The survey on trade services operations of banks also found instances of the involvement of bank officials in TBML operations.

Case studies

The report cites one case involving several fake firms that misdeclared a shipment of cigarettes, foodstuffs and electrical goods as capital equipment to avoid the hefty duty that should have been paid on the goods that were actually being shipped.

In another case study, one exporter opened letters of credit (L/Cs) using fake documents and fake photographs.

Another exporter opened 49 back-to-back L/Cs but moved the export proceeds out of their account without making payment for the L/Cs. This case required the connivance of bank officials.

Growing concerns

Bangladesh’s external trade has experienced steady growth over the past decade to reach around US$80 billion in the financial year ending September 2017.

As trade volumes increase, so will the number of opportunities for TBML the BIBM survey concluded.



Categories: Trade Based Financial crimes News