When yarn turns into sand: story of import fraud

Chattogram Customs found sand in place of polyester yarn in a consignment at Chattogram port on Wednesday. 

NZ Accessories Ltd, a Dhaka based company, had declared the import 100 percent polyester yarn worth Tk27.20 lakhs from a Chinese company named Xinjtai Yameizhi Textile Company Ltd.

The importer had opened a letter of credit at the RAJUK branch of Exim Bank. 

Kalkini Commercial Agencies Ltd, a clearing and forwarding (C&F) agent, submitted the required documents to the customs office to release the goods on September 29. 

Customs charged Tk16.16 lakhs as duty from the company but later they exempted the tax because the company is bonded. 

"The importer paid only Tk1,848 in customs duty for importing yarn, but when they went to release the goods, the customs audit investigation and research team discovered the sand," said a customs source.

"We confiscated the consignment on a tip-off just before delivery, and found sand in the container instead of yarn. The company might have laundered the money in the name of importing goods," said Nur Uddin Milon, deputy commissioner of Chattogram Customs. 

"We will file a case against them as per the law," he added.

"We were surprised to find sand in place of yarn. The exporter might have cheated us. Our production will be hampered because we did not get the goods that we ordered as per the work-order," said Farid Hyder Khan, deputy managing director of NZ Accessories Ltd. 

"We spoke to the local supplier, shipping agent and exporter about this issue. We are also investigating it from our side."

 "We did not launder the money, we were cheated by the suppliers," he added.  

When contacted, C&F agent Md Elias Hossain, who is the proprietor of Kalkini Commercial Agencies Ltd said: "As the C&F agent, we requested customs to release the goods based on the documents we had been given. We are not involved in this case." 

This is not the first case of money laundering or of dodging customs duty at Chattogram port. 

In September 2018, customs found 410 sacks of sand inside a container that had been declared as holding imported A4 size paper worth Tk 12.81 lakh.

In the last five years, at least 30 containers have come in with water, sand or ashes in place of oil, scrap, and capital machinery at Chattogram port.

Not only that, importers also brought in high-priced goods in place of low-priced goods to evade tax. 

In June this year, Pran Dairy imported cement from Dubai in the name of importing 510 tonnes of plastic granules worth $5,66,000.

Chattogram customs do not have exact data on how much money has been laundered in the name of importing goods. 

Customs have hardly filed any money laundering cases against fraudulent importers. 

For the first time, on August 29, 2018, customs filed two cases against two firms under the Money Laundering Prevention Act 2012 at Bandar police station on charges of money laundering in the name of importing goods.

The firms were Grambangla Food Corporation and M/S N Islam Enterprise. 

The cases were filed on the directive of Bangladesh Bank and the National Board of Revenue (NBR).

The two companies illegally imported cigarettes worth Tk12.86 crores under the declaration of textile goods and machinery worth Tk11.50 lakhs in 2018.

"Earlier we could not file any case under the Money Laundering Prevention Act as we did not have permission from the NBR to do so. Recently, NBR allowed us to file cases under the act," said Nur Uddin Milon.