Rise in money laundering

Foreign missions to get income tax, customs wings

National Board of Revenue (NBR) has decided to establish income tax and customs wing in ten foreign missions of the country aiming to check money laundering and evasion of duties, reports UNB.
The wings will be attached to Bangladesh missions in the USA, India, China, Japan, Malaysia, Singapore, South Korea, United Arab Emirates, Italy and Thailand.
The NBR has chosen the missions considering the import and export volume.
“A proposal has been sent to the concerned ministries in this connection,” a senior official of the NBR told the news agency, on condition of anonymity.
The official also alleged that money has been laundered from the country through under-invoicing during export and over-invoicing while importing. He mentioned that a section of dishonest businessmen are involved in money laundering for evading tax.
“So NBR has taken the initiative to contain import and export through false statement, smuggling, money laundering, customs related corruption and financing in terrorism,” the NBR official said.
According to the sources, the NBR has given the proposal to create customs official posts in different missions in 2010. The proposal then got approvals from Internal Resource Division and Public Administration. But the Finance Ministry rejected that proposal.
“Due to the rise of money laundering from Bangladesh, getting advices from the higher section of the government NBR has taken the initiative again,” the NBR official said.
According to a report of US based Global Financial Integrity (GFI), illegal capital flight from Bangladesh increased 33.78 percent year-on-year to $9.66 billion in 2013 through trade under- and over-invoicing and other channels.
Of the amount, $8.35 billion or over 86 percent was siphoned off through trade invoicing, while the remaining $1.31 billion could not be traced in the balance of payments data.
The illegal outflow stood at $7.23 billion in 2012, according to a revised estimate of the GFI report.
The Washington-based research and advisory organisation published the report titled “Illegal Financial Flows from Developing Countries: 2004-2013″ in December last.
On average, $5.59 billion was siphoned out of Bangladesh a year between 2004 and 2013.
This high amount of illegal capital outflow puts Bangladesh at 26th position among 149 countries in the latest GFI ranking of economies exporting illegal capital. Bangladesh was ranked 51st on the previous list.
Trade misinvoicing is defined by GFI as a method for moving money illegally across borders that involves deliberately misreporting the value of a commercial transaction on an invoice submitted to customs.
The GFI report shows that the illegal capital outflow from Bangladesh tripled in 2013 from $3.35 billion in 2004.
According to the GFI, illegal financial flows are illegal movements of money or capital from one country to another.
The organisation classifies this movement as an illegal flow when the funds are illegally earned, transferred or utilised. According to the GFI, measurable illegal flows stem from two sources:
trade misinvoicing and other unrecorded flows.
Trade misinvoicing takes into account export under-invoicing and import over-invoicing, while a second source of illegal flows includes leaks from the balance of payments system.

Rise in money laundering

Foreign missions to get income tax, customs wings

National Board of Revenue (NBR) has decided to establish income tax and customs wing in ten foreign missions of the country aiming to check money laundering and evasion of duties, reports UNB. The wings will be attached to Bangladesh missions in the USA, India, China, Japan, Malaysia, Singapore, South Korea, United Arab Emirates, Italy and Thailand. The NBR has chosen the missions considering the import and export volume. A proposal has been sent to the concerned ministries in this connection, a senior official of the NBR told the news agency, on condition of anonymity. The official also alleged that money has been laundered from the country through under-invoicing during export and over-invoicing while importing. He mentioned that a section of dishonest businessmen are involved in money laundering for evading tax. So NBR has taken the initiative to contain import and export through false statement, smuggling, money laundering, customs related corruption and financing in terrorism, the NBR official said. According to the sources, the NBR has given the proposal to create customs official posts in different missions in 2010. The proposal then got approvals from Internal Resource Division and Public Administration. But the Finance Ministry rejected that proposal. Due to the rise of money laundering from Bangladesh, getting advices from the higher section of the government NBR has taken the initiative again, the NBR official said. According to a report of US based Global Financial Integrity (GFI), illegal capital flight from Bangladesh increased 33.78 percent year-on-year to $9.66 billion in 2013 through trade under- and over-invoicing and other channels. Of the amount, $8.35 billion or over 86 percent was siphoned off through trade invoicing, while the remaining $1.31 billion could not be traced in the balance of payments data. The illegal outflow stood at $7.23 billion in 2012, according to a revised estimate of the GFI report. The Washington-based research and advisory organisation published the report titled Illegal Financial Flows from Developing Countries: 2004-2013 in December last. On average, $5.59 billion was siphoned out of Bangladesh a year between 2004 and 2013. This high amount of illegal capital outflow puts Bangladesh at 26th position among 149 countries in the latest GFI ranking of economies exporting illegal capital. Bangladesh was ranked 51st on the previous list. Trade misinvoicing is defined by GFI as a method for moving money illegally across borders that involves deliberately misreporting the value of a commercial transaction on an invoice submitted to customs. The GFI report shows that the illegal capital outflow from Bangladesh tripled in 2013 from $3.35 billion in 2004. According to the GFI, illegal financial flows are illegal movements of money or capital from one country to another. The organisation classifies this movement as an illegal flow when the funds are illegally earned, transferred or utilised. According to the GFI, measurable illegal flows stem from two sources: trade misinvoicing and other unrecorded flows. Trade misinvoicing takes into account export under-invoicing and import over-invoicing, while a second source of illegal flows includes leaks from the balance of payments system.