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Could Bangladeshi remain outside Panama Papers!


Kamrunnahar Shapla


Individual’s demand, dream or greed coming one of after another has been the moving spirit of civilization from the first of its existence to the present time. There goes no ending of the essence of having wealth, more wealth and wealth again! In response to that essence, human being is doing good or evil deeds nationally or internationally in new forms, strategic manner or under the banner of legitimacy coping with time and context. So far I can remember, once I read V. I. Lenin’s Imperialism, the Highest Stage of Capitalism where he predicted clearly that ‘the export of capital would acquire immense importance’ in the highest manifestations of capitalism. And among different stages he indicated ‘banking network as a corporate giant of capitalists’ to create finance capital. There would be ‘extension of transnational trust and curtails’. For sure, in the 21st century we are living in such peculiar epoch! So Expert group has tried to say different times that as much as half the world’s capital flows through offshore centers. Panama papers is the latest example of this phenomenon flowing one country to another with a huge debates pointing finger at how some wealthy people use offshore firms to evade tax and avoid sanctions by concealing the identity of the owners and the origin of the money since last month the. Although  the process of internationalization of production, trade and investment may somehow support the occurrence, in many cases a country like Bangladesh must have some reservations on those keeping in mind ‘One size does not fits all’ strategy. Illegal capital flight is a stumbling block to the country’s economy thus no more expected.  But question may come, what is Panama Papers?

The Panama Papers belongs to Panama-based law firm and corporate service provider Mossack Fonseca and were and are leaked by a source simply known as “John Doe”. Those so called papers are 11.5 million leaked documents that detail financial and attorney-client information for more than 214,488 offshore entities. Anyway, few days back, in the second phase of its discloser released by the International Consortium of Investigative Journalists (ICIJ), more than 20 Bangladeshis and foreign nationals related to Bangladeshi companies doing offshore businesses outside were found in the papers. Before that Offshore Leaks, released in 2014 by the ICIJ has shown us the probability of having more than 30 names of Bangladeshi there. In fact, it is no more surprising in this 21st century global interdependence! It is well known that Bangladesh is also a part of global capitalist corporate governance. And as money laundering is a global issue, can Bangladesh remain outside of it! To Washington based research institution Global Financial Integrity, the illicit financial flows from Bangladesh stood at US$9.66 billion (Tk 740 billion) in 2013.In December last, its latest report, also showed that in last 10 years (2004-2013), dirty or black money worth $55.87 billion had flown out from the country to different tax havens like Switzerland, Mauritius, British Virgin Island, Dubai and Singapore. Then another question logically comes, why Panama Papers is grave concern in Bangladesh?

Firstly, it is a matter of concern because, like other countries Panama papers fails to make govt., civil society, people in general curious and inquisitive in Bangladesh. Some person found in the list clearly denies the allegation. Even, we did not get have any clear cut public statement from any delegated authority except Transparency International Bangladesh (TIB). Secondly, We learned via global mass media that in many countries wherever they found any involvement, they tried to investigate the matter. In our closest neighbor country, India’s Modi government assured to investigate it trough special committees. In some countries opposition parties are highly active in pressurizing govt. to investigate the Panama scandal. We also knew how Cameron Govt. of UK is under public pressure! Almost in every public program he is trying to clarify the matter.

Thirdly, in fact, we never think that an entity or person’s names in the papers have broken the law or guilty acting illegally. There may have legitimate uses for offshore companies and trusts. In this age of economic liberalism, financial dealings are not illegal in themselves but may be abused by some opportunist classes to hide assets from tax authorities, provoke the process of criminal activities or hide misappropriated or illegally earned wealth. Bangladesh being a lower middle income country yet does not allow convertibility of capital account formally. The present state of private-sector investment in the country is not up to mark. Had the funds been kept within country, the investment may have taken place in different sectors thus generating employment opportunities and helping the economy to foster. Fourthly, Panamá Papers again give us a red alarm -how the Bangladeshi funds could be transferred outside or kept in safe havens evading the laws? It makes us conscious about the loopholes in existing legal framework so that the reserved money of Bangladesh is not safe even. What should do then and what will be result?

Bangladesh as a corruption prone country, its govt. has no way to be reluctant, otherwise it will trend creates ‘favorable condition for corruption’ in the national and international financial management. The Anti-corruption commission assures us to scrutinize the authenticity of the names appeared in the latest leaks, in this regard; the govt. should strengthen its hand with effective measures for the betterment of good governance, national security and development. Proper actions should be taken against them under the anti-money laundering act or other laws concerned in the context of the recent alarming trend in siphoning off money from Bangladesh as revealed in various international reports.TIB, the National Board of Revenue (NBR) and office of the Attorney-General should work jointly in bringing back the money.  The real case should be revealed before people so that in future no one dares to transfer money outside of the country.

Coming out from the culture of impunity, seeing legal procedures, the person having latent plans to send money outside evading taxes will be in fear and they alternatively think to invest that money in different sector of Bangladesh. Public consciousness will be raised that the country’s economy is still not strong enough and the foreign-currency reserves are not so high to make investment abroad open for all. It is often heard that Multinational companies evade tax through their transfer pricings; they also will get red alarm. Another thing is some countries always try to give way forward and needed opportunities to flow wealth outside that should be stopped. Those countries must be pressurized or brought under legal action. All victim countries who are members of UN International Anti-Corruption Convention can seek bilateral and international law and technical cooperation from those involved countries also.  Banking sector must have to take a rigid position to stop this trend.

There are many so called law firms like Mossack Fonseca which are involved in such capital-flight process. It is high time to identify those mediators, including world-famous banks and accounting companies involving with this evil syndicate. But before doing something internationally, it is badly needed to take strong measures to prevent money laundering through strengthening the national legal framework, implementing actions and ratifying various legal and organizational cooperation dealsto avoid the possibility of such incidents in the future.

Writer is research Analyst at Micro-governance Research Initiative

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