ALLEGATIONS that apparel factory owners have laundered about Tk 640 billion a year through over-invoicing are of grave concern and it is a welcome piece of news that the Anti-Corruption Commission has set out an inquiry into the allegations. The commission has already set up a four-member committee to look into the allegations and it has already had evidence that an apparel factory has laundered Tk 1.75 billion. The commission’s secretary says that the National Board of Revenue has recently provided the inquiry team with some documents on over-invoicing and that the laundering of money through over-invoicing could be contained if the revenue board regularly provided the commission with information. The secretary further says that the commission has initiated the inquiry as allegations have it that some government officials are involved in the process. All this raises two questions that the commission could have avoided being asked if it had initiated the inquiry earlier, seeking information from the revenue board, which does not seem to be unwilling, to stop illicit capital flight and if it had initiated the inquiry not only because some public servants were involved in the process. The Washington-based Global Financial Integrity in its report for 2008–2017, made public in March 2020, has said that Bangladesh has suffered a value gap of $7.53 billion on an average a year in the period in export and import because of mis-invoicing.
Trade mis-invoicing takes place when importers and exporters falsify prices in import and export invoices for an illicit transfer of value across international borders to evade duties and taxes, launder the proceeds, circumvent currency control and hide profits offshore. The situation warrants the Anti-Commission Commission should not mince words about the inquiry, leading to an investigation and the trial which seem likely, into the allegations especially against entities in the sector that have so far received government benefits on almost every occasion. The apparel sector, in the first of a series of economic measures that the government announced in 2020 to cope with the COVID-19 fallouts, has already received the entire Tk 50 billion allocation for a 2 per cent service charge to pay workers their wages and Tk 55 billion more of the Tk 400 billion fund meant for large industries. The exporters were meant to pay back the money, Tk 105 billion, in 24 months, including six months in grace period and amidst the exporters’ demand for repayment period extension, up to five years as voiced in October 2020, the government has finally decided to extend the period by six more months — two years and a half in all. Allegations, which appear to be well substantiated, of illicit capital flight against actors in the apparel sector, which has received government benefits on almost every occasion, strike a disparaging note. The money given in loans is meant for the development of the sector and not to be laundered abroad.
The Anti-Corruption Commission should, therefore, rise above all interests and hold to account every actor involved in the laundering of money. The commission is further expected to run an impartial inquiry, leading to investigation rolling into trial, into all such allegations and make arrangement for the repatriation of the money laundered. Such examples are not rare and the authorities have already proved that they can so do if they mean to do so.
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