No more amnesty for black money: Combating seaport smuggling
Sumaiya Nehla Saif, Chittagong Community Manager
Chittagong, 24 August 2015
The port city of Chittagong accounts for more than 90 percent of international trade in Bangladesh. Unfortunately, it is also responsible for the generation of considerable sums of black money in the country. Although this laundering favors those involved, it also results in loss of revenue and a black hole in the tax system, which consequently impacts everyone - especially the poor. Since black money dominates the economy of Bangladesh, it has been a growing concern. This year, the government collaborated with the United Nations Organization for Drugs and Crime (UNODC) and the World Customs Organization to open a Port Control Unit in order to combat seaport smuggling in Chittagong.
Launched in January 2015, the initiative has trained six customs officials at the Chittagong Customs House on how to enhance security at the port as well as combat the illicit import of undeclared goods, especially drugs and other contraband items. Legitimate trade can still continue freely, the goal is to prevent "under the counter" transactions. The initiative employs analysts and search teams from customs teams, drug law enforcement forces and police units to target containers with illegal goods through profiling and risk analysis. The officials have received training from Belgium and the Netherlands, and communicate directly with Interpol, the United Nations Environment Programme, and the Regional Intelligence Liaison Office for maximum effectiveness.
The project essentially strengthens the existing infrastructure to ensure that the correct rates of duties and taxes are applied to every item so that every transaction is accounted for. The initiative uses modern technology and computerized systems, leaving little to human judgement. Those involved in illicit smuggling are less likely to undertake the risk of getting caught and arrested. The Port Control Unit is an important strategy in lowering the quantity of undeclared good exchanged at the port as trained officials work at different levels of the port and customs system to implement the main objectives of this program.
Prime Minister Sheikh Hasina has vowed to make Bangladesh a high middle-income country by 2021, and instilling equality by fighting black money circulation is crucial to making this happen. Black money leads to disproportionate income for businessmen and traders, making the rich, richer and the poor, poorer. This is because most of the wealth acquired by illegal trade at the port is not accounted for in the tax system. When this is manifested as a deficit in tax revenues, the government reacts by raising taxes. Although this has no effect on smugglers, ordinary Bangladeshis suffer. Also, smuggling renders economic data useless as a considerable amount of money in the economy is unaccounted for, making economic predictions baseless.
Therefore, regulating and monitoring trade is a vital step towards fair and just distribution of wealth in Chittagong, and should therefore be made a priority. The port control unit is a necessary step to fighting this economic loss, and successful implementation can result in long-term benefits in the economy.