*BFIU has no data on capital flight;
*$8.27bn sent abroad annually, claims GFI
* Most LCs on export and import not audited
Jannatul Islam, Dhaka: Illegally laundered money cannot be brought back into the country due to weak regulations and legal frameworks, economists say.
Due to the absence of standard prices for commodities and machinery on international markets, financial institutions are having difficulty controlling capital outflows through trade finance.
As Bangladesh has no jurisdiction over other countries to facilitate money transactions, capital flight continues, said Policy Exchange Chairman Masrur Reaz.
Banks should monitor letters of credit and audited reports of companies. Through random sampling, some LCs can be scanned for suspicious transactions,” Dr Mashur told the reporter.
Syed Mahbubur Rahman, former chairman of the Bangladesh Bankers’ Association (BAB), said banks verify data and price lists with merchants and counterparts through different platforms such as IHSMarkit.
Bankers search the web for relevant information to check data entered into the LCs. It remains a challenge for the banking system to match data with international trends,” Syed Mahbubur Rahman, managing director at Mutual Trust Bank, told the reporter.
Several economists and bankers expressed concern after the Bangladesh Finance Intelligence Unit (BFIU) told the media that the laundered money cannot be brought back.
Additionally, the top intelligence agency for the financial sector claimed there was no evidence of capital outflow when suspicious transactions increased by 62 percent year-on-year.
The BFIU identified 8.57 thousand suspicious transactions in fiscal year 2021-22, up 62.32 percent from 5.28 thousand in 2020-21.
BIBM Director Prof Shah Mohammad Ahsan Habib claims capital flights have continued over the years because money always flows from developing to developed countries.
“BFIU has identified vulnerable areas to combat money laundering. Capital flight, however, has become a normal part of the economy. A stronger KYC management is required and the relationship between both ends must be verified,” Dr Ahsan told the reporter.
Between 2009 and 2018, Bangladesh lost approximately $8.27 billion annually from mis-invoicing of import-export goods and illegally moving money across international borders, according to Global Financial Integrity (GFI).
