Trade Based Money Laundering Risk in Bangladesh
In June 2018, Central Bank of Bangladesh discovered gross irregularities in the LC related operations of the Janata Bank, and imposed the penalty of Taka 1 million for Non compliance with the anti money laundering laws. According to the regulations prevailing in Bangladesh, goods are required to be imported to the country within 120 days after Letter of Credit is opened. In certain instances observed by the Financial Intelligence Unit of Bangladesh, importers didn't submit bills of entry (which is the document to prove that imported goods have entered the country), against the letters of credit (LCs).
This is an indicator that the goods didn't enter the country but the money was transferred abroad to the designated importers' accounts. This is a simple money laundering technique in which the trade is used as the mechanism to take the money out of the country.
According to the estimates of the Central Bank, about 7 percent of the Letters of Credit remained mysteriously unsettled with no bill of entry submitted.
Janata Bank, which is one of the largest state owned banks in Bangladesh alone shares 3 percent of the LCs or about half of the cases of non-submission involving around $1 billion. More than Tk 15000 crores never entered the country according to the estimates.
Posted from http://giccp.com/trade-based-money-laundering-risk-in-bangladesh/
Update: Bangladesh is seen to be facing the issues in the state owned bank due to the letters of credit issued against the fake import bills against which there is no material imported. So go to bank, produce bogus invoice and get money. In reality there is no transaction. Intermediaries produce bogus bills
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