Customs detects Tk 382cr money laundering thru RMG exports

The Customs Intelligence and Investigation Directorate (CIID) has unearthed that four Dhaka-based apparel exporters laundered Tk 382 crore using fake documents.

The agency, an office under the National Board of Revenue (NBR), said

Asia Trading, Sabiha Saiki Fashion, Emu Trading Corporation, and Ilham shipped readymade garments valued Tk 382 crore to several countries in 1,762 consignments between 2017 to February 2023.

Although they exported 18,355 tonnes of goods, no US dollar came to the country against the consignments, according to the findings of a probe of the CIID.

"In the past, the CIID detected the imports of various items using fake permits. Such a forgery in the case of exports was never identified," said CIID Director General Mohammad Fakhrul Alam at a press briefing at his office in Dhaka yesterday.

A team of the CIID in Chattogram unearthed the anomalies after a month-long investigation.

"We are working to take legal action against them. Of course, a case will be filed for money laundering," Alam said.

The findings came at a time when the allegation of money laundering and siphoning off money abroad through trade mis-invoicing is rife.

In 2021, the Global Financial Integrity said Bangladesh lost $8.27 billion on average annually between 2009 and 2018 to mis-invoices of the values of import-export goods by traders. The attempts aimed at evading taxes and moving money across international borders illegally.

HOW IRREGULARITIES WERE UNEARTHED

On January 31 this year, a CIID team, acting on a tip-off, seized nine consignments of Sabiha Saiki Fashion at the depot of Summit Alliance Port Ltd in Chattogram and found huge quantities of goods not declared on paper. They also found evidence of using fake documents.

After carrying out primary investigations and cross-checking information with the bank, they came to the conclusion that the proceeds would not come to the country if the products were exported.

An eight-member probe committee was formed to look into the irregularities of the company.

The probe body examined 86 shipments worth $18.45 lakh made by the company between 2021 and 2022. It found that export earnings were not brought back.

A member of the committee, on condition of anonymity, said that Limax Shippers Ltd, a clearing and forwarding agent, processed the consignments.

"Then we collected all export data of the C&F agent and found that the situation was very dire. Initially, we worked on four firms and found out the forgery."

According to customs officials, Asia Trading Corporation exported 46 tonnes of ready-made garments worth Tk 90 lakh to the United Kingdom through Chattogram Port in December 2021.

In order to facilitate the shipment, the exporter used fake documents and the CPC-1072, a custom procedure code used to send samples of goods to buyers.

Asia Trading Corporation also sent goods worth Tk 282 crore in 1,382 consignments to the UK, Singapore, the United Arab Emirates, and Malaysia in the four years from 2018, but no single dollar has been brought back to the country.

According to the CIID, Sabiha Saiki Fashion exported 997 tonnes of goods worth Tk 18 crore, Emu Trading Corporation sent 2,523 tonnes of goods worth Tk 63 crore, and Ilham shipped 660 tonnes of goods worth Tk 17 crore.

They exported garment items to the countries such as the UAE, Malaysia, Singapore, Qatar, the UK, Saudi Arabia and Nigeria. Limax Shippers acted as the C&F agent to perform the customs procedures in favour of the companies, according to the CIID.

Customs detectives say the four firms shipped goods using fake export permits in order to launder money. As there was no bank involved in the process, the proceeds from the shipment would not come to the country.

Officials say customs officials, in general, provide faster services in order to facilitate exports and the firms have taken advantage of that.

They alleged that money launderers used the permits of genuine exporters to secure clearance from the customs department as officials can't verify the authenticity of the bill of exports online with banks.

"They have used fake sales contracts," said one official.

Alam said the CIID was also looking into whether the customs officials who were in charge of the clearance of documents failed in their duties.

"Investigation is going on. All will be brought to book."

Sarfaraz Kader, managing director of Limax Shippers, refused to make any comments.

HOW FRAUDS USUALLY TAKE PLACE

Uttam Chakma, deputy commissioner of the CIID office in the port city, said 12 pieces of information have to be provided while submitting the bill of export on the server of the NBR.

In some cases, the bill of export can be filed without inserting the information if the CPC-1072 and the Special Export Code 20 are used, he said.

But under the special cases, customs officials should check whether the company qualifies for the benefit while carrying out the assessment of the export consignment, he said.

"However, it is very time-consuming to verify the information online, so there is an opportunity to circumvent the eyes of officials. The frauds committed such irregularities using the opportunity."

Mohammad Bashir Ahmed, additional director-general of the CIID, Chattogram, said the gang used the limitation of the NBR server to launder the money.

"We have placed some suggestions to the NBR to prevent such forgeries. Some recommendations are in the process of implementation."