* the Pattern of Foreign Trade & Its Contribution to the Revenue ; a Case Study of Pubali Bank Bd Chapter I: Introduction 1.1.0 Background of the Study: Banks Play an Important Role in the Business Sector and Promoting

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Political Corruption and the Bangladesh Customs System
Md Almas Uzzaman1
Monash Asia Institute
Monash University Melbourne Australia
almasbangla@yahoo.com, Almas.Uzzaman@monash.edu
Abstract: The Bangladesh Customs Department is the gatekeeper for imported items. Its employees enjoy a monopoly in discharging their highly technical services in customs clearance procedures. The employees are in a position to apply their discretionary powers for their personal benefit through unfair practices that jeopardise international trade. The customs brokers are also willing participants in corruption, as part of the process of becoming rich. They use their special relations with the political leaders of Bangladesh in order to pressure the customs bureaucracy. The political leaders connive at this in order to make easy money, which cannot be traced. This paper addresses the question of how these activities create barriers to fair trade and the implications of this for a country like Bangladesh, which, amongst other things, depends on technology imports to meet development goals.

Key words: International trade, political corruption, bureaucracy, hidden barriers, customs clearance, customs brokers. 2
1 I am grateful to my supervisor Professor Marika Vicziany for her advice in preparing this paper. All remaining errors are mine alone.
2 This paper was presented to the 18th Biennial Conference of the Asian Studies Association of Australia in Adelaide, 5- 8 July 2010. It has been peer reviewed via a double referee process and appears on the Conference Proceedings 2

Introduction: Bureaucracy is an essential part of government. Political masters are mandated to formulate policy for the betterment of a country, and the bureaucracies are to implement these policies (Asakura, 2003; Choi, 2007). Politically powerful leaders sometimes attempt to interfere in bureaucratic functions (Furlong, 1998). The customs system of Bangladesh is one of the government organs, which is responsible for implementing the policies formulated by parliament and the Ministry of Commerce to control imports and exports. Apart from collecting customs duties, other administrative tasks are involved including meeting safety regulations, ensuring that products conform to technical and other standards (Asakura, 2003). Customs administration requires the customs officials to perform highly technical tasks in order to furnishing clearances for the imported consignments. These procedural matters provide opportunities to apply discretionary powers, which can be misused by customs officers (WCO, 1999). The intermediary services that brokers (officially called Clearing and Forwarding Agents in Bangladesh) provide to importers are another possible avenue for corruption (West, nd). Customs brokers are highly specialised operators who understand the system that customs officers must follow and so they therefore can readily identify the loopholes, thereby facilitating breaches of the customs regulations. Sometimes the brokers appeal to local politicians who in turn pressure the bureaucrats in the customs department for inappropriate and speedy decisions. The political leaders are frequently happy to fall in line with such requests as a way of building future favours and accepting illicit payments. In this way, a complex web of corruption thrives in Bangladesh involving all three parties – customs officials, brokers and local politicians – in a system of providing discretionary interpretations of the country’s customs rules and regulations. Such discretion is not only corrupt but also constitutes hidden tariff barriers as they put up the cost of transactions at the point of importing and exporting goods.

This paper is divided in four sections: I next consider some of the literature that addresses this issue. I then explain how I collected original data in Bangladesh and the results that emerged from this work. The final section sums up the conclusions reached and the...
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