Today jail term for trade-based money launderers
Businesspeople will come to be sentenced to seven years found in prison if they make the incorrect declaration on exports, imports and expenditure abroad as the government has moved to rein in trade-based money-laundering, which costs Bangladesh billions of dollars every year.
The finance ministry issued an order on March 10 to the effect predicated on the FOREX Regulation Act -1947.
The central bank yesterday asked banks to follow the instruction to tackle trade-based money laundering.
The government amended the Act in 2015, keeping a provision to punish money launderers.
In line with the Act, the authorities would have to issue a notification to put into practice the measure. As part of the approach, the ministry has issued the circular.
The provision against the amount of money launderers will be in place until December 2026.
The government is now drawing up a fresh law titled "Foreign Exchange Management Act." The latest provision will be contained in the new act.
"We've been requested the federal government for long to put into practice the provision of regulations to refrain debtors from trade-based money-laundering," said Mustafizur Rahman, a good distinguished fellow of the Centre for Policy Dialogue.
Although the government has spent six years in issuing the notification after enacting regulations, the initiative is time-befitting, he said.
According to the most recent Global Fiscal Integrity (GFI) report, 80 per cent of the total funds laundered out of Bangladesh was done through above- and under-invoicing.
Bangladesh lost an astounding $7.53 billion typically between 2008 and 2017 to trade mis-invoicing, said the GFI report.
Regarding over-invoicing, importers present an inflated selling price concealing the genuine value of the imported goods and companies in the industry invoice of the letters of credit (LCs). They do not bring back the amount of money to the united states and invest abroad in most cases.
Exporters state a lesser price than using the one at the commercial invoice of LCs during under-invoicing. They commit misdeeds to launder the amount of money to foreign countries as well.
Money-laundering is facilitated by collusion between importers and exporters, and lender officials are occasionally forced to try against the law transactions, according to a survey completed by the Bangladesh Institute of Lender Management in 2018.
Misdeclaration of prices of the imported and exported goods is a grave concern for the country, the BIBM said.
The institute carried out another study on the problem in 2019 titled "Addressing Trade-based Cash Laundering in Bangladesh: An Assessment."
It said: "Banking institutions should develop data banks on their own to prevent vast amounts of dollars from getting siphoned out of Bangladesh through trade-based money laundering."
As well, banks must have self-initiatives to create data available to other private banks.
The Finance Act 2020-2021 imposed a penalty against launderers, which reaches least twice however, not exceeding four times the tax evaded by giving misdeclaration on exports, imports and investments in other countries.
