Bangladesh’s economy has been experiencing stress for last couple of months because of the pressure on the foreign exchange reserves, continuous increase in commodity prices, energy crisis, dollar crisis in banks, decrease in expatriate income and collapse in export earnings. As a result, the businessmen are struggling to open letter of credit or LC. But, the money laundering is going unabated under the disguise of fruits import.
According to National Board of Revenue (NBR) sources, a group of unscrupulous traders laundered a record amount of money abusing fruit import process. A record amount of fruits were imported last year despite strict precautions. In the year 2022, fruits worth Taka 5 thousand 17 crores were imported in the country, which is about 97 percent more than the previous year. Fruits worth Taka 2 thousand 550 crores were imported in 2021.
The NBR sources also said that money is being laundered by making false declarations on the import of fruits. The Ministry of Commerce has taken several initiatives to increase the import duty to discourage the import of fruits, but it has not yet been implemented. In this circumstance, traders and economists have advised the government to stop the import of fruits.
Prime Minister Sheikh Hasina held a meeting with the secretaries of the concerned departments and ministries at Ganabhaban on November 6 to review the overall financial situation of the country and relevant issues. Sources said that the Ministry of Commerce proposed to increase the tax on the import of luxury goods to maintain the dollar reserves in the meeting. The issue of fruit import came up in the discussion.
Expert opined that if more tariffs are imposed on foreign fruits imports, the traders will be not interested to bring fruits from abroad and it will help increasing the demand for native fruits.
In another development, Commerce Secretary Tapan Kanti Ghosh asked the ministry to consider implementing the proposal to increase duty on 340 products a few days ago.
Talking over the issue, president of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Jasim Uddin said that there is no need to import foreign fruits as it is possible to meet the domestic need with native fruits.
“Our organisation has proposed to the government to increase duty on import of fruits as huge amount of fruits is coming in the country under false declaration,” he said.
Former general secretary of Bangladesh Economics Association Jamal Uddin Ahmed said there is no need to import fruits from abroad as it is not an everyday commodity.
He also said that some of the fruits which are being imported from abroad are also available in Bangladesh and some can be produced in the country.
He urged NBR to stop import of fruits and review the matter for protecting domestic fruit growers.
Mentioning that huge amount of money is being smuggled under disguise of fruits import; he said the foreign fruits are also threat to public health as they contain formalin.
When asked how foreign fruits could stay fresh even after long time, public health expert Dr Lelin Chowdhury said that it was found in a test conducted before Covid pandemic that red grapes and apples contain high levels of formalin.
“The fruit imported from abroad should be checked for formalin or other chemicals. If the imported fruit is not examined, it may cause harm to public health,” he said.
Customs Intelligence and Investigation Directorate (CIID) cited an example how another type of item being imported under the declaration of fruit. An LC was opened for import of fruits, but the organisation imported cigarettes. LC is opened for 3 thousand dollars (about 2 lakh 40 thousand taka), but it imported product worth 3 crore taka and the money was smuggled to the United Arab Emirates. The bank opened the account in the name of the unknown organisation without any address verification. The money was sent four times by LC from that account and each time the money was sent in the name of fruit import but it imported cigarettes.
Concerned people said the unscrupulous fruit importers are causing threat to public health and creating economic risk simultaneously.
Information about money laundering in the name of fruit import has also come up in Bangladesh Bank’s report. Bangladesh Bank Governor Abdur Rouf Talukder himself also expressed anger over the matter.
In an event on December 1, the governor said “I am surprised to see that products were imported by over invoicing up to 20-200 percent. We have closed 100 such LCs.
He also commented that it is possible to stop trade-based money laundering if import by showing lower or higher prices of products in foreign trade can be controlled.
“Apples are being imported at a lower price than the price at which they are being sold in the market. Due to low prices, the government’s revenue is also decreasing from here. Thus goods are being imported through under invoicing. The price which is being shown low is being paid through hundi,” he said.
NBR and Bangladesh Bank data showed that fruits are imported into the country in the categories of ‘Fresh Fruits’ and ‘Dry Fruits’. Dates, raisins and almonds are being imported in dry fruits category while apple, orange, pear, grape, malta, mandarin, pineapple, dry cherry, dragon, strawberry among 52 types of fruits are being imported in fresh fruits category.
Statistics shows that since July last year, fruit imports have increased every month compared to the previous month. Compared to July, 61 thousand 540 metric tons or 220 percent more fruits were imported in November. A total of 89 thousand 484 tons of fruits were imported in November while it was 27 thousand 945 in July.
On May 24, the NBR imposed an additional 20 per cent regulatory duty (RD) to discourage import of non-essential and luxury goods, including fruits.
Earlier the regulatory duty rate was only 3 percent. In spite of the increase in regulatory duty, the import of fruits has not decreased in the country.