Trade Mis-Invoicing Drives Billions in Illicit Outflows from Bangladesh: Report

A Washington-based research organization, Global Financial Integrity (GFI), has reported that large-scale illicit financial outflows are occurring from Bangladesh under the guise of international trade.

In its latest report published on Thursday, GFI revealed that over the past decade, significant amounts of money have been transferred abroad through customs evasion and false declarations of trade values, a practice known as trade mis-invoicing.

According to the report, Bangladesh’s cumulative trade “value gap” over the last 10 years has reached approximately $68.3 billion.

GFI’s analysis of trade data indicates that a substantial portion of these illicit financial flows has taken place through bilateral trade with developed countries. The report highlights that the ready-made garment export sector and the import of capital machinery are particularly vulnerable to such practices.

In many cases, import costs are deliberately overstated (over-invoicing), while export earnings are underreported (under-invoicing) to move money out of the country.

The organization noted that a significant share of Bangladesh’s total trade is affected by such discrepancies, which directly impact government tax revenues and foreign exchange reserves.

Based on the scale of this trade value gap, Bangladesh ranks among the top 10 developing countries in Asia facing the highest levels of trade mis-invoicing, the report added.