NBR beefs up automation to prevent fictitious exports, money laundering

The National Board of Revenue (NBR) has ordered the parties concerned at customs houses and stations across the country to process the export general manifest (EGM) — a legal document or an export report filed by the carrier of a shipment to validate the export transaction — using the ASYCUDA world system.

The move aims to prevent export-related irregularities including fictitious exports — export items that do not exist but are shown on paper only which is a well-known means of money laundering.

The customs wing of the NBR issued an order in this regard on 4 October and it will come into effect on 15 October.

The Automated System for Customs Data (ASYCUDA) is a computerised customs management system that covers most foreign trade procedures.

Up until now, the export-related process at customs houses and stations was not fully automated.

Apart from that, the NBR for the first time specified the scope of work and responsibilities for the concerned parties related to exports — clearing and forwarding (C&F) agents, freight forwarders, shipping agents, and the export general manifest (EGM) department of NBR's customs wing.

The NBR order also mentioned that if any concerned party violates this rule, action will be taken against them as per the existing customs law.

According to NBR sources, rule violators may face a maximum penalty of Tk50,000.

"Implement the export general manifest (EGM) through the ASYCUDA World system (automated software related to import-export) in various customs houses and customs stations of the country to simplify the export process, prevent money laundering, reduce the time of export process and ensure reliable export statistics. The scope of work of the respective parties has also been specified for the proper conduct of the EGM," reads the NBR order.

A senior official of NBR's customs wing, on condition of anonymity, told Business Standard, "Once this system is fully implemented, fictitious exports or export-related irregularities will be reduced by about 90%. Besides, this will make it easier for the NBR to gather accurate data on exports."

A mismatch in export data of various government agencies can be seen every year. According to the Export Promotion Bureau (EPB) estimates, in the fiscal year 2022-23, Bangladesh exported goods worth $55.56 billion. However, the Bangladesh Bank data on export earnings does not match the EPB data.

There are also allegations of fictitious exports due to the lack of automation at customs houses and stations and negligence of duty by customs officials.

In September, NBR's Customs Intelligence and Investigation Directorate (CIID) found evidence of 10 exporters laundering Tk300 crore in the name of RMG exports through forgery of export permission (EXP) from a fake authorised dealers bank.

Later, many of those exporters said that they did not know anything about the export in question. It was the responsibility of the customs authority to check it properly.

On behalf of four of its accused member companies, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in a press conference on 26 September reprimanded the customs authorities for the blunder.

After the issuance of the NBR order, Faruque Hassan, president of BGMEA, welcomed the step.

He told TBS, "If the concerned parties fulfil their responsibilities properly, the time of customs clearance will be reduced, and irregularities including money laundering will be curbed. But the NBR also needs to ensure that no party can capitalise on this order to take unfair advantage or harass exporters."

Mohammad Hatem, one of the top leaders of the RMG owners' lobby, told TBS, "The decision is good, but it should have been made based on the opinion of the stakeholders."

A senior official of a Dhaka-based garment exporting company termed the initiative as positive. He said, "It will bring order in the system and the scope of fictitious exports will be narrowed."

In this new system, since the work of all parties has been fixed and the time frame has also been fixed, now everyone has to fulfil their responsibilities properly, he added.

Division of labour

As per the new scope of work, the C&F agent has to take responsibility for at least 8 aspects in respect of sea-bound exports. Similarly, the shipping agent has to take responsibility for 8 aspects, the freight forwarder has to look after 8 aspects, the customs department has to look after 5 aspects, and the private ICD authority has to take responsibility for 4 aspects. Apart from this, in the case of export by air and land, the responsibilities of the respective parties have been similarly divided.

The NBR official said, "These duties are known but till now they were not divided. So, from now on, there is no more chance to avoid work for any party."

Besides, the customs authorities will close the EGM in the customs software within three days after the shipment. If the EGM is not filed within the stipulated time by the shipping agent, action will be taken as per law.