Around US$68 billion has been laundered out of Bangladesh through international-trade channels over the past decade, making trade-based money laundering (TBML) significant conduit for illicit financial outflows, experts say.
They warn that TBML has become a major threat to the national economy by weakening foreign-exchange reserves, reducing government revenue, distorting legitimate trade and investment, and undermining financial stability and governance.
The observations came at a Continuing Professional Development (CPD) programme titled 'Trade-Based Money Laundering: Impact on National Economy - Role of Professional Accountants', organised by the Dhaka Branch Council (DBC) of the Institute of Cost and Management Accountants of Bangladesh (ICMAB) on Wednesday evening in Dhaka.
Speaking as chief guest, Iqtiaruddin Md. Mamun, Head of the Bangladesh Financial Intelligence Unit (BFIU), stressed the need to strike "a very good balance" between facilitating legitimate trade and preventing financial crimes.
"We have to prevent money laundering for the sake of the country's economy, but we must ensure that legitimate trade is not harmed in the process," he told the meet.
Mr Mamun said legal provisions alone were insufficient unless supported by ethical responsibility, adding that the "moral obligation is more important" in tackling financial crimes.
He urged professional accountants to perform their duties as reporting entities by identifying and reporting suspicious transactions to the BFIU.
Presenting the keynote, Md. Rokon Uz Zaman, Additional Director of the BFIU, said TBML became largest avenue for capital flight because trade transactions are comparatively easier to manipulate than other financial channels.
He cited a major fraud case involving fake exports of leather products, where export proceeds worth '13.09 billion taka' became overdue through the use of shell banks in jurisdictions, including Saint Lucia and Gambia.
"The actual market price was four times lower than the declared export price," he said, explaining that the manipulation enabled the perpetrators to fraudulently claim '11.71 billion taka' in government cash incentives.
ICMAB President Md. Kausar Alam described the country's financial sector as being at a "crisis moment", saying that its backbone had been severely weakened by widespread financial crimes.
He called for stronger institutional protection for chief financial officers so they could effectively perform their role as corporate gatekeepers.
Shah Md. Ahsan Habib, Professor at the Bangladesh Institute of Bank Management (BIBM), said banks shared significant responsibility for the persistence of trade-related fraud.
He claimed that '80 to 90 per cent' of trade frauds in Bangladesh involved back-to-back letters of credit (LCs), many of which were based on contracts that lacked legal enforceability.
He warns that unusually close relationships between importers and exporters should be treated as potential warning signs of money laundering.
Managing Director of NRBC Bank PLC Md. Touhidul Alam Khan urged bankers to remain vigilant against suspicious requests for opening LCs, particularly during late-day transactions where clients sought approvals without proper credit assessments despite offering '100-percent' cash margins.
He also emphasised the importance of technological preparedness, saying that financial institutions must strengthen their technological capabilities because money launderers continually adapt to exploit new systems.
Moderating discussions, Md. Maksudur Rahman Sarker, Chairman of the Department of Accounting at the University of Dhaka, said regulators, accountants and civil society all shared responsibility for the systemic weaknesses that had allowed vast sums of money to leave the country.
He questioned whether professionals possessed the courage needed to challenge entrenched corruption.
Presiding over the programme, Mannan Bapari, Chairman of the DBC of ICMAB and Chief Financial Officer of Southeast Bank PLC, noted that previous studies estimated around '75 per cent' of money laundering in Bangladesh was trade-based.
He urged professional accountants to uphold the highest ethical standards and fulfil their responsibility to safeguard the country's economic interests.
The speakers unanimously observed that combating TBML requires coordinated efforts from regulators, professional accountants, bankers, businesses, policymakers and the public.
They stressed the importance of strengthening financial transparency, corporate governance, regulatory compliance and public awareness to effectively detect and prevent trade-based financial crimes.
The programme was attended by ICMAB council members, bankers, academics, financial professionals, students and representatives of public and private organisations.
