Pre-shipment inspections on foreign trade were abolished almost two decades ago during the tenure of former finance minister Saifur Rahman. Bank executives now believe that money laundering has increased due to the cancellation of pre-shipment inspections.
So, they have suggested such inspections be reintroduced.
This was called for at an online meeting, on anti-money laundering policies under the guise of trade, with state-owned banks, hosted by the Bangladesh Financial Intelligence Unit (BFIU).
Md Ashadul Islam, senior secretary of the Financial Institutions Division chaired the meeting.
Md Ali Hossain Pradhania, Managing Director (MD) of Bangladesh Krishi Bank, praised the BFIU guidelines. He also stressed the need for container tracking in line with the proposed vessel tracking.
Also, he highlighted the importance of the banks' own database as well as the central common database in preventing over-invoicing and under-invoicing.
The participants said it was difficult to determine the actual cost of capital machinery to prevent trade-based money laundering. At this time, they proposed prices be monitored from a central cell.
Shams-Ul Islam, MD of Agrani Bank, said most of the state-owned banks work with government letters of credit (LCs).
The chances of money laundering are lower in government banks than private banks; however, the government banks get lower ratings.
Md Obayed Ullah Al Masud, MD of Rupali Bank, emphasised the importance of preventing money laundering.
He said, "Curbing money laundering properly will accelerate the country's development."
The MD of Ansar-VDP Unnayan Bank also stressed on the importance of money laundering prevention and implementing the guidelines.
Md Ashadul Islam, senior secretary of the Financial Institutions Division, explained the background of the issuance of this policy.
He said, "Various studies have identified trade-based money laundering as the largest source of money laundering. The BFIU and other concerned agencies can take necessary steps to ensure that bankers are assisted in determining the fairness of commodity prices by setting up a dashboard, or another central database, while maintaining adequate security."
He, however, emphasised the importance of preventing money laundering by any means.
Ashadul Islam said, "It is difficult to recover money and the role of developed countries in repaying the laundered money is not clear. They lack interest and commitment to repayment."
He directed the banks to take effective steps to prevent money laundering by ensuring adequate manpower in the compliance unit and ensuring skilled manpower in foreign trade.
Abu Hena Mohammad Razi Hasan, head of BFIU, said that the Money Laundering and Terrorism Financing Risk Assessment Report – a joint venture of BFIU, ACC and CID – identified money laundering through international trade as a high risk area.
In that context, BFIU, various commercial banks and the National Board of Revenue formed a group, consisting of representatives of the Bangladesh Shipping Corporation, and formulated the guideline.
Participants at the meeting also said that although money laundering in countries like China or India is high, Bangladesh is the first country in South Asia to issue guidelines for commercial banks to prevent trade-based money laundering.
Bangladesh ranks fifth in the world and third in Asia for issuing separate guidelines to prevent trade-based money laundering.