Uncovering the depths of trade-based money laundering: evidence from a seaport in Bangladesh
| Date | 25 May 2023 |
| Pages | 604-618 |
| DOI | https://doi.org/10.1108/JMLC-03-2023-0063 |
| Published date | 25 May 2023 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Md Noor Uddin Milon,Habib Zafarullah |
Uncovering the depths of
trade-based money laundering:
evidence from a seaport
in Bangladesh
Md Noor Uddin Milon
Customs Wing, National Board of Revenue, Dhaka, Bangladesh, and
Habib Zafarullah
Department of Sociology, University of New England, Armidale, Australia
Abstract
Purpose –Money laundering (ML) is a major criminal offence stemming from unethical practices by personnel
on the ground at Chattogram Port, an important import and export facility in Bangladesh. Because money can be
more easily laundered through imports, it is necessary to investigate the dubious process in this sector. This study
aims to identify the items most regularly used for easy ML and the factors contributing to their vulnerability.
Design/methodology/approach –This research uses a qualitative approachand analyses information
from primary sources. Data is obtained from customs officials, port authority personnel, importers and
customs brokers through semi-structured questionnaires. Although thereare many techniques for ML, this
study only found three most overwhelming: under-invoicing,over-invoicing and misdeclaration. A few case
studieshave been used based on newspaper reports and the internet to triangulate the qualitativedata.
Findings –Four import items –food products,garments, capital machinery and chemicals –have a higher risk of
ML. This study also revealed that money launderers prefer under-invoicing food and garment items. Misdeclaration
is more commonly associated with capital machineryand chemical items. Over-invoicing, on the other hand, is only
prevalent in government purchases. The port authorities need to pay particular attention to these issues.
Research limitations/implications –As ML is an ongoing activity that changes over time, the
findings of this research are circumscribed by the data collected at a singlepoint in time. Additionally, this
researchdid notconsider alternative laundering methods.
Practical implications –The research results can provide a basis for creating effective anti-money
laundering(AML) strategies to assist with sustainableeconomic growth.
Social implications –Developing effective AML measures can help combat corruption and establish
good governancein the country and support human well-being.
Originality/value –This paper presents original research findings based on technical analysis. The
ChattogramPort Authority and the National Board of Revenue have accepted and used the main findingsin a
collaborative action plan to tackle ML. The Bangladesh Bank, the country’s central bank, has also
incorporatedthe necessary guidelines and regulations into the Money LaunderingPrevention Act, 2012.
Keywords Bangladesh, Trade-based money laundering (TBML), Chattogram Port authority,
Misdeclaration, Over-invoicing, Under-invoicing
Paper type Research paper
Introduction
International trade is regarded as the biggest threat in the fight against dirty money in
today’s globalized world (The Economist,2014). The sheer volume and complexity of
international trade make it difficult to oversee and monitor all transactions, providing
enough possibilities for criminals to exploit systemic flaws (Cassara, 2016). A subset of
JMLC
27,3
604
Journalof Money Laundering
Control
Vol.27 No. 3, 2024
pp. 604-618
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-03-2023-0063
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1368-5201.htm
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