Tk 640b siphoned off the country for 'trade'

Bangladesh sees capital flight of $7.53 billion on an average per year due to misinvoicing during import and export.

A report titled ‘Trade-Related Illicit Financial Flows in 135 Developing Countries: 2008-2017’ by the Washington-based research organisation Global Financial Integrity (GFI) published on Tuesday revealed this.

The report shows how money of 135 rising and developing economies has been siphoned off by misinvoicing in last 10 years (2008-2017). It also compared those countries’ capital flight to that of 36 developed economies.

The money has been laundered, hiding the actual prices through misinvoices, according to GFI.

The report does not include Bangladesh’s statistics of 2014, 2016 and 2017 and the estimate has been drawn upon the remaining seven years. The country stands 133th among the 135 developing countries in average money laundering.

Allegations are common regarding money laundering through such misinvoicing in the country. As per the report, misinvoicing is prevalent in about 18 per cent of all the exports and imports of Bangladesh.

According to GFI, flight of funds has increased by such misinvoicing from the country since 2008. The highest amount, $11.51billion flew from the country in 2015 while $5.28 billion, $8.9 billion, $7.09 billion, $8 billion, $7.12 billion and $8.82 billion were siphoned off the country in 2008, 2009, 2010, 2011, 2012 and 2013 respectively.

Many politicians, bureaucrats and businessmen try to launder money as their children stay abroad, said Ahsan H Mansur, executive director of Policy Research Institute. He said those people do not have the confidence to invest funds in the country.

The people involved in capital flight are from the top level of our society, Mansur observed and added that capital flight would continue if good governance is not there.

GFI did not identify the gaps as ‘illicit financial flows,’ but rather labelled them as trade misinvoices. For example, Ecuador’s data show that the country had exported bananas worth $20 million to the US while the US shows it actually imported the item $15 million that year. The misinvoicing consists of a $5 million gap.

A total of $3.29 billion was laundered from Bangladesh to the developed countries per year. In 2015, the amount stood at $4.58 billion while in 2008 it stood at $2.55 billion.

“We’ve received information on a number of launderings in our probes, “Abu Hena Md Razee Hassan, head of Bangladesh Financial Intelligence Unit (BFIU), said. “We’ve submitted this information to the law enforcement for proper action.” He said, “We’ve drafted a policy to prevent money laundering and the banks have been asked to follow these.”

China has been ranked as the top country of value gap in trades with $482.39 billion on an average between 2008 and 2017 while the gap is $81.51 billion for Mexico.

GFI analysed data submitted by countries to the United Nations Comtrade database. It analysed trade between 135 developing countries and 36 advanced economies and found a $8.8 trillion value gap.