Navigating the shadows: exports and money laundering dynamics in Bangladesh
Abstract
Purpose
This study aims to analyze the complex dynamics of money laundering (ML) in the export sector of developing countries, with a special focus on Bangladesh. It aims to uncover the strategies and tactics money launderers use to exploit export transactions and understand the vulnerabilities that exist in economies where enforcement agencies neglect the export industry.
Design/methodology/approach
This study examines Bangladesh’s export sector ML using qualitative methods. Customs officers, central bank officers, port authorities and selected exporters were interviewed semi-structured. Document analysis of Bangladesh Bank orders, media and Customs Intelligence and Investigation Directorate reports was also done. Qualitative data patterns were identified using theme analysis.
Findings
The study identifies the most vulnerable export commodities – readymade garments, agricultural items and processed foods – as prime targets for ML. Key methods of laundering include under-invoicing, over-invoicing, misdeclaration and fake documentation. The research highlights the significant risk posed by the improper use of government financial incentives and introduces the “sample shipment” method as a novel laundering tactic. The findings underscore the need for stronger oversight and controls to mitigate these risks.
Research limitations/implications
This research is limited by single-point data because ML is a continual activity. The reliance on case studies from newspaper reports and online platforms introduces a degree of selection bias and the chosen instances may not comprehensively represent the broader landscape of trade-based ML.
Practical implications
The study provides several practical recommendations for policymakers and law enforcement agencies to fortify the export sector against exploitation by money launderers, ensuring greater transparency and accountability in international trade operations.
Social implications
By closing loopholes in the export sector, the research supports the Sustainable Development Goals, particularly Goal 16.4, which aims to reduce illicit financial flows, thereby contributing to poverty eradication and economic stability in developing countries.
Originality/value
Original research results supported by technical analysis are presented in this work. It contributes to the body of knowledge by detailing the adaptive strategies of money launderers and proposing targeted recommendations for enhancing the integrity of the export sector.
Keywords
Acknowledgements
Declarations.
Ethics approval: Not required as the research was undertaken by individuals in their personal capacity. Also, no experiment on humans/animals was undertaken.
Informed consent: Interviewees’ consent was taken before conducting interviews.
Funding: The study was not funded by any organization.
Authors’ contribution: Milon was the major contributor, did the initial research and interviewed participants; Zafarullah did the theoretical/conceptual part and analyzed and interpreted the findings; Poli, along with Milon, did the literature review and interviewed some participants.
Competing interests: There were no financial, non-financial or conflicting interests.
Availability of data and materials: Data for the research was obtained from published materials, the Internet and personal communication and interviews.
Citation
Milon, M.N.U., Zafarullah, H. and Poli, T.A. (2024), "Navigating the shadows: exports and money laundering dynamics in Bangladesh", Journal of Money Laundering Control, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JMLC-05-2024-0092
Publisher
:Emerald Publishing Limited
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