Bangladesh saw an estimated $68.3 billion in illicit financial outflows disguised within trade between 2013 and 2022, reflected in “trade value gaps” identified by Global Financial Integrity.
The report, titled Trade-Related Illicit Financial Flows in Developing Asia (2013–2022) and published on March 26, places Bangladesh among the top 10 developing Asian economies with notable discrepancies in reported trade values.
Trade value gaps refer to differences between the declared value of exports or imports and the corresponding figures reported by partner countries, reflecting mismatches in price, quantity, or other transaction details.
These discrepancies are identified through “mirror trade” analysis, which compares export data from one country with import data recorded by its trading partner for the same goods.
Such gaps are used as indicators of trade misinvoicing, where invoice information is deliberately misreported to move money across borders through under-invoicing of exports or over-invoicing of imports.
The report cautions that value gaps do not by themselves prove illicit activity, as differences in valuation methods, timing, and reporting practices can also generate discrepancies.
For that reason, the estimates are treated as indicators of exposure to trade-based illicit financial flows rather than precise measurements of proven illicit proceeds.
On average, Bangladesh’s annual trade value gap stood at about $6.83 billion over the decade, equivalent to roughly 16 per cent of its total foreign trade.
Despite being among the top 10 in absolute terms, the country does not rank among the highest when measured against total trade.
The proportion is higher in several economies, reaching around 25 per cent in the Philippines and China, over 23 per cent in Thailand and Malaysia, and more than 21 per cent in India.
A significant portion of the discrepancies, about $32.8 billion over the decade, was directed to advanced economies from Bangldesh, according to the report.
Illicit financial flows, defined as money or value that crosses borders and is illegal in its source, transfer, or use, remain a major challenge for development and governance.
They weaken domestic resource mobilisation, reduce tax revenue, and constrain the fiscal space required for public services and infrastructure investment.
Efforts to curb such flows are linked to the United Nations Sustainable Development Goals, which call for a significant reduction in illicit financial flows by 2030.
Across Developing Asia, trade-related value gaps increased over the period, reaching about $1.69 trillion in 2022.
These discrepancies are substantial relative to trade volumes, with average gaps in many countries accounting for around one-fifth of total trade.
China recorded the highest cumulative gaps at $6.96 trillion over the decade, followed by Thailand with about $1.18 trillion and India with around $1.06 trillion.
Other economies such as Malaysia, Viet Nam, and Indonesia also registered large gaps, while Bangladesh ranked alongside Myanmar and Cambodia among smaller economies with notable discrepancies.
The report notes that even relatively small mispricing rates can translate into large absolute gaps when applied across high-volume trade flows.
It recommends strengthening customs oversight, improving trade data systems, enhancing transparency in free trade zones, and increasing cross-border data sharing and international cooperation.
The findings underline the need for tighter monitoring of trade transactions in Bangladesh to reduce financial leakages and support economic stability.
