The recent report on fake export consignments worth Tk 24 crore might not be large in scale, but it raises concerns about the integrity of Bangladesh’s export system. It is troubling, particularly because this practice has persisted for years despite occasional media commotion and subsequent nugatory efforts by the authorities to curb the trend.
In the latest case of phantom export, this daily identified at least 29 fake consignments associated with at least seven companies between January and June this year. A phantom export is a fraudulent practice through which companies exploit duty-free access to raw materials intended for export-oriented companies and divert the finished products into the local market instead of exporting. Ideally, when bonded goods are diverted back to the domestic market, the said companies have to pay duties and taxes ranging from 89 percent to 159 percent. The seven companies allegedly connected with the latest incident managed to evade these duties and taxes, while claiming the government’s 2 percent export cash incentive. All this was accompanied by fictitious paperwork, and the empty consignments were shown as “cleared” in the customs system, ready to be exported. This raises a serious question about how such consignments could have been in the clear without help from someone inside the customs infrastructure.
Phantom exports have both micro and macro levels of implications for the economy. For instance, it deprives the state of revenues from duties and taxes, while the state loses money in export incentives. Additionally, it contributes to the longstanding unreliability of export statistics in the country. For instance, there is a gap of nearly $4 billion between export figures declared by the Export Promotion Bureau (EPB) and the Bangladesh Bank for the first 10 months of FY2025-26, which negatively impacts the country’s data credibility and chips away at confidence in the country’s institutions.
It is promising that the authorities have started reviewing export records and launched a probe on a small scale. However, there should be a more comprehensive investigation to identify insider networks that possibly function under the cushion of political impunity. There should also be a forensic audit of the Asycuda World system to minimise the chances of digital fraud. We strongly advise the government not to view these cases as isolated incidents, but to look into the historical patterns of fraudulent shipments to stop such practices once and for all. Given the government’s emphasis on ease of doing business, it needs to ensure a trade environment free of corruption. Furthermore, the authorities must ensure that cases filed in relation to ghost shipments in the past are expedited and those responsible are brought to justice.
