$68.3 billion smuggled out of the country under the guise of trade

Around $68.3 billion has been illegally transferred abroad from Bangladesh in the last decade under the guise of international trade. This money has been laundered mainly by under- or over-stating the value or quantity of imported and exported goods, according to the Washington-based research organization Global Financial Integrity (GFI).

A recently published report by the organization states that between 2013 and 2022, about $68.3 billion has been smuggled out of Bangladesh through trade mis-invoicing—that is, by incorrectly declaring the price of goods. This method is used for tax evasion, profit shifting, or capital laundering.

The report says that this money is usually smuggled out through over-invoicing for imports and under-invoicing for exports. This causes a loss of government revenue on the one hand, and also puts pressure on foreign exchange.

GFI analysis shows that Bangladesh is in the top 10 developing countries in Asia due to this large discrepancy in trade prices.

The study also revealed that a significant portion of the country's illicit money flow occurred during trade with developed countries. Of the total deficit, about $33 billion or $33 billion of manipulation occurred in transactions with the United States and European countries.

The report also said that this risk for Bangladesh is not limited to regional trade; rather, it is closely related to the global supply chain. The trend of such money laundering is relatively high, especially in export-oriented industries and import-dependent sectors.

Although the amount of loss in Bangladesh is significant compared to other countries in South Asia, it is much less than that of India. At the same time, the report mentioned that about $1.06 trillion was laundered from India under the guise of trade.

On the other hand, Sri Lanka has a trade deficit of about $24 billion with developed countries. However, the report states that the impact of this money laundering is relatively more serious there due to the country's fragile economic situation.

Drawing a picture of the entire Asian region, the GFI said that in 2022 alone, about $169 billion was laundered from developing countries in Asia under the guise of trade. While large economies such as China, Thailand and India top the list, such irregularities exist in almost all countries, large and small.

The report warns that trade mis-invoicing is a deep-rooted problem in Asian economies. There has been no clear sign of abating this trend in the past decade.