75pc of money laundering in the country occurs under trade disguise

About 75% of the total money laundering from Bangladesh is conducted through trade channels, with false declarations during import and export processes enabling large sums of money to leave the country, according to a research paper presented at a roundtable on Tuesday.

The study was organised by the Bangladesh Institute of Bank Management (BIBM) and based on data from the National Board of Revenue (NBR).

It also revealed that since the amendment of the Money Laundering Prevention Act in 2015, the Customs Intelligence and Investigation Department has worked on 95 money laundering cases — all linked to trade — involving over Tk320 billion.

The research was compiled from responses of officials from 37 banks and involved experts from BIBM, private banks, and the Bangladesh Financial Intelligence Unit (BFIU). BIBM faculty member Ahsan Habib presented the findings.

“Trade is the preferred channel for money laundering because it allows the movement of large sums more easily compared to other methods,” Habib said. “This makes it attractive for criminals who want to transfer big amounts abroad.”

Deputy Governor of Bangladesh Bank, Nurun Nahar, said, “Money laundering also occurs through under-invoicing of imports and exports, which falls under trade financing. Often, such trade appears legitimate on the surface, but hides illicit activities underneath. It’s a sophisticated form of deception that needs close monitoring.”

According to the report, an average of $8.27 billion was illegally transferred abroad every year between 2009 and 2018 through false trade declarations — roughly 2% of the country’s GDP.

The study also cited data from US-based Global Financial Integrity (GFI), which estimated that between 2009 and 2023, Bangladesh lost an average of $16 billion annually through trade-based money laundering — equivalent to 3.4% of GDP. Most of this involved imports of textiles, consumer goods, and fuel.

The report pointed to significant gaps in the country’s trade-based anti-money laundering safeguards. While all banks surveyed have systems to verify international sanction lists, and 95% carry out traditional name checks, only half have access to price verification databases for imports and exports.

Nurun Nahar warned, “Those involved in laundering money abroad are clever. Simply following rules won’t catch them. Vigilance and smart intelligence are necessary.”

Other speakers at the roundtable included BIBM Chair Professor AK Gangopadhyay, Director General Abdul Hakim, faculty member Ali Hossain, Bangladesh Bank Director AKM Rezaul Karim, and BFIU Director Mostakur Rahman.