The memorandum of understanding (MoU) struck between the National Board of Revenue (NBR) and the Bangladesh Financial Intelligence Unit (BFIU) at the Bangladesh Bank last Monday has the potential of making some headway in the fight against money laundering and illegal fund transfers, particularly through external trade transactions. However, there are scores of MoUs, signed between parties, both private and public, that have failed to meet objectives and deliver goods. Hopefully, the latest one signed between the NBR and BFIU would be effective enough in the task of combating illegal outflow of funds from the country.
It is difficult to make even a near authentic estimate of the illegal fund outflow. Obviously, the transfer of fund using illegal routes has always been there. But the intensity of the crime, according a relevant global watchdog organisation and the domestic observers, has gone up in recent years. The estimate---over Tk.5.0 trillion--- given by the Global Financial Integrity on the capital flight between 2004 and 2014 is just worrisome. And most part of the fund transfers had taken place through trade transactions such as under- and over- invoicing.
Undeniably, effective cooperation between the NBR and BFIU would help reduce illegal fund flows through trade transactions in which letters of credit (LCs) is considered to be the widely-abused instrument. If the banks took special care about checking the prices quoted in the LCs, the situation would surely improve. Checking price of any product in the international market in this age of information technology (IT) is not a big deal. It can be done in a matter of minutes. What the BFIU will have to do is make it mandatory for all banks to cross-check the prices quoted in the LCs. Similarly, the customs people at the NBR will also have to be adequately watchful.
Here, the NBR's plan to appoint an international accounting firm for gathering information on illegal fund transfers could prove very helpful in combating the crime that has been hurting the country's economic interest seriously. However, the policymakers and relevant others do need to look into a very pertinent question--- why are some people transferring funds abroad in larger volumes these days? Naturally, a section of businesspeople are among the top transferors of funds using illegal means. Besides economic factors, social, political and governance issues might have triggered a feeling of insecurity among them. If not all, at least, some of them, under the circumstances have decided to ensure a safe and secured living abroad. It is, thus, necessary to address those issues to help remove the growing sense of insecurity among all people, including the businesses.
However, any adverse situation does not in anyway justify the criminal act of sending funds abroad illegally when millions of workers toil hard day and night both at home and abroad to fetch foreign currency to meet the country's import and other necessary expenditures. The BFIU reportedly has signed 56 countries on exchange of information and instituted 32 cases to retrieve the funds transferred abroad illegally. These actions do prove that the Unit is proactive. But given the importance of stopping illegal fund transfer, it has to be far more serious, alongwith all other relevant institutions including banks, about fulfilling the task of combating money laundering.
