Sensational Money Laundering Under Guise of Exports
A section of Chattogram Seaport. Photo Courtesy: Wikipedia.
Money laundering under the guise of exports is largely an 'open secret' in the country. A class of businessmen, by 'managing' banks, customs, and relevant government officials, continues this illicit activity without hindrance. As a result, substantial amounts of export proceeds never enter the country; in other words, they are laundered.
The veracity of one such recent incident has been found in an investigation by the Bangladesh Financial Intelligence Unit (BFIU). An entity named Best Leather Company Limited exported leather goods worth $2,698,901 (over Tk 33 crore) to Saudi Arabia and the United Arab Emirates. These goods were exported against 16 LCs (Letters of Credit) through the local branch of Islami Bank PLC in Motijheel from December 5, 2019, to April 18, 2021. However, the export proceeds have not been brought back to the country even after five years, despite it being mandatory to do so within 120 days. At the time of the incident, the company's Managing Director (MD) was the current government's State Minister for Textiles and Jute, Shariful Alam, according to relevant sources.
When contacted regarding this matter, the head of the Bangladesh Financial Intelligence Unit (BFIU), Ikhtiar Uddin Mohammad Mamun, told Agamir Somoy on Sunday at his office that they adhere to a policy of 'zero tolerance' against all forms of money laundering. He stated that no one who launders money will be spared. Furthermore, the investigation into Best Leather Company Limited has been completed and sent to the Criminal Investigation Department (CID) of the police for further action. Since the BFIU cannot make arrests, the report, with proven offenses, has been sent to the relevant law enforcement agencies as per regulations.
He said they do not see anyone's identity, only the crime, adding that action is taken against the offender, regardless of who they are. Among these, the investigation and recovery of laundered funds from 11 major groups are progressing rapidly on a priority basis. Letters have been sent to various countries to recover the laundered money.
According to the foreign exchange regulations of Bangladesh Bank, export proceeds must be brought back to the country within 120 days of exporting goods. However, in special cases, with the permission of Bangladesh Bank, a maximum of 210 days can be allowed. If any bank or entity fails to bring back export proceeds on time, it is a direct violation of the Money Laundering Prevention Act, which is a severe punishable offense under the country's existing laws.
State Minister for Textiles and Jute Md. Shariful Alam told Agamir Somoy over the telephone last night, "Best Leather is our family business, which is currently closed. I was a director of the company. That is true. However, I was never in the Managing Director (MD) position. You can verify the documents. It is my brothers' company. They made me a director. As far as I know, the proceeds from the products exported to Saudi Arabia and the United Arab Emirates were brought back to the country according to regulations. However, since you are citing documents, I am looking into the matter further," Shariful Alam added.
"However, the BFIU investigation report reveals that at the time of the incident, the Managing Director (MD) of Best Leather Company Limited was Shariful Alam. His younger brother, Md. Saichum Miah, was the company's chairman, and his other brothers, Md. Nayem Hossain, Md. Abul Kalam Azad, and Md. Abul Kaiyum, were directors of the company.
Multiple members of the joint committee on money laundering, sharing consistent information, stated that under the guise of conducting business in the country, Best Leather Company laundered money to Saudi Arabia and Dubai through an Indian-owned, Dubai-based buyer. As the veracity of the incident was proven, the BFIU sent the case to the CID on April 22 for further investigation. It was mentioned there that the company, through 16 LCs between December 5, 2019, and April 18, 2021, failed to bring back export proceeds amounting to $2,698,901 USD.
A letter signed by Zakir Hossain, Head of the Local Office Branch of Islami Bank and Senior Executive Vice President, stated that updated information regarding the repatriation of export proceeds from the exporting company Best Leather and the amount of money was sent to the CID from Islami Bank's Local Office on April 22 of the current year, in the interest of the investigation. The Acting Managing Director (MD) of Islami Bank, Md. Altaf Hossain, told Agamir Somoy last Saturday, 'I have recently taken charge. I cannot say everything. However, this bank issues LCs in accordance with the rules. It is a normal business activity. It would not be appropriate to say anything right now about the customer's export proceeds not being brought back. But the branch manager can answer better.'
Zakir Hossain, Head of the Local Office Branch of Islami Bank, told Agameer Shomoy, 'Best Leather Company is a good customer of ours. It has a good reputation. Recently, the CID requested information about the company. We provided the information in accordance with the law. When a government agency requests information, it is not possible to refuse to provide it as per the rules.'"
