Bangladesh lost an estimated $68.3 billion, or about Tk 8.37 lakh crore, through trade-related illicit financial flows between 2013 and 2022, according to a report by Global Financial Integrity released on 26 March.
The figure means that, on average, more than $6.83 billion, or roughly Tk 83,700 crore, was siphoned out of the country each year through manipulated trade transactions.
The report analyses how money is moved illegally across borders by misreporting trade data, a method known as trade misinvoicing.
This involves deliberately understating export earnings or overstating import costs to transfer money abroad.
When Bangladesh’s export or import figures do not match those reported by partner countries, the difference is identified as a ‘trade value gap’, which signals potential illicit financial flows rather than confirmed criminal proceeds.
According to the findings, Bangladesh ranks among the top 10 developing Asian countries exposed to such risks, with cumulative gaps reflecting persistent weaknesses in trade monitoring.
On average, these gaps accounted for nearly 16 per cent of the country’s total foreign trade, indicating that a significant portion of cross-border transactions did not pass through the formal financial system.
In Bangladesh›s case, a substantial share of these flows is linked to trade with advanced economies.
The report estimates that about $33 billion, or approximately Tk 4.04 lakh crore, of the total gap occurred in transactions with the United States and European countries.
The report pointed to the garment sector as one likely channel, noting that under-invoicing of apparel exports to Western buyers can hide real earnings abroad.
Over-invoicing of imported capital machinery is another common scheme, often used to divert subsidised loans or foreign exchange out of the country.
The report identifies trade misinvoicing as a major channel of trade-based money laundering, a process where illicit funds are disguised as legitimate trade payments.
In practical terms, exporters may under-declare shipment values and retain part of the earnings abroad, while importers may inflate invoices to move excess foreign exchange out of the country.
These practices enable tax evasion, capital flight and circumvention of foreign exchange regulations.
Additional domestic assessments indicate that illicit financial flows were not limited to trade discrepancies alone.
A government white paper committee reported in December 2024 that about $234 billion, equivalent to roughly Tk 28.08 lakh crore at the then exchange rate, was siphoned abroad between 2009 and 2023 during the Awami League-led government period.
The report attributed the outflows to collusion among politically exposed individuals, business groups, segments of the financial sector and intermediaries, pointing to systemic governance overlooking.
The economic impact of such flows is substantial as it reduces tax collection, narrows fiscal space and limits the government’s ability to invest in infrastructure and public services.
For a smaller economy like Bangladesh, the relative impact is more severe, as the loss of even a fraction of these funds constrains economic stability.
The report further links persistent misinvoicing to weak customs enforcement, limited data-sharing mechanisms and gaps in financial oversight.
High import duties and regulatory restrictions create incentives for traders to manipulate invoices, while insufficient coordination among customs, tax authorities and financial intelligence units allows such practices to continue.
