The New Nation - Internet Edition

BUSINESS REPORT

Commercial crime is growing faster than international trade. Frauds are more complex and involve larger sums than ever before. New scams are constantly encountered. The trade finance system depends entirely upon documents. Substantial amounts of money can be paid out by banks, whose only obligation is to verify that the documents comply with the terms of the credit. Any system, which depends purely on documents, will be vulnerable to abuse by money launderers. Once credit complying documents have been presented and payments have been made, purportedly for an international trade transaction, the money thus released, would leave a documentary trail and, hence, facilitate the initial cycles of the wash.

ICCB President Mahbubur Rahman told these while inaugurating a day-long ICC workshop on 'International Fraud-Prevention, Control and Remedies' at the Bangladesh China Friendship Conference Centre in the city organised for the bankers in cooperation with the Mutual Trust Bank Ltd yesterday.

In most cases of documentary fraud, the banks, in one way or another lose. At the very least, the fraud will strain the relations between the bank and its customers or the correspondent banks in the letters of credit chain. The greatest danger though, to banks, is when they are financing a transaction where the buyers and sellers are in collusion, Mahbubur Rahman mentioned.

"It is our view that it is in the bank's own interest to ensure that they know precisely what activities their clients are asking them to finance. One way to do this is to make independent checks into the transactions, i.e., to authenticate the bills of lading and other documents presented under the documentary credit system. It is only through these independent checks that the banks can be sure that they are financing what their clients are declaring to them. There are ways to do this without conflicting with their liabilities under the UCP. In our view, it is just good prudent practice," Rahman told.

"We recommend to banks pick up bills of lading presented to them, at random, amongst their good and not so well known clients and have them checked at regular intervals. Such checks are done by the ICC International Maritime Bureau for their banking members, it was said by ICCB President that.

As a specialized bureau within ICC Commercial Crime Services (CCS), the Financial Investigation Bureau (FIB) also conducts enquiries and investigations into matters associated with money laundering, fraud and suspect documents.

Bangladesh has been growing fast in the international trade. Both import and export are increasing at substantial rate. As the international trade is growing all parties involved in the trade is also getting exposed to the risk of international trade finance fraud. The more the market of import-export is expanding the more we are facing the risk of unknown events including fraud. Although the number of attacks in Bangladesh has fallen, the area is still listed as very high risk. Pirates are targeting ships preparing to anchor. Most attacks are reported at Chittagong anchorages and approaches. While ICC rules, national and international laws/regulations are guiding the international trade, the parties involved in the trade need to get more conversant and acquainted with those rules/laws/regulations as well as they should have ideas/information about the fraudulent practices in international trade, ICCB President noticed.

ASM Quasem, Executive Board Member of ICCB said that the workshop would help to increase skill of professionals who are involved in international trade and enrich their knowledge how to prevent International Commercial Crime.

ICCB Secretary Ataur Rahman and P Mukundan, Director and Chief of ICC-International Crime Services, visiting expert from UK who conducted the workshop also spoke at the inaugural session.

Some 95 participants from banks, insurance, multinational companies, law firms and others big business houses attended the workshop. A similar workshop is going to be conducted by ICC Bangladesh in Chittagong on Sunday, July 27.