Accurate, timely info key to preventing financial fraud
Accurate and timely information in addition to an exercise of due diligence is key to the prevention of frauds, the International Chamber of Commerce-Bangladesh (ICC-B) president said yesterday.
“The most important general principle is the old adage- Know your customer better and know your trade,” he said inaugurating a daylong ICC-B workshop on 'International Fraud-prevention, Control & Remedies' in Chittagong organised for the bankers, in collaboration with Mutual Trust Bank Ltd, according to a press release.
He said once a fraud has occurred, the options are very few and they are all usually very expensive. The simplistic solution to avoid fraud is to ensure that one deals only with substantial companies with good track records. However, in a real competitive world it is not always possible to deal with blue-chip companies, Rahman said.
“Fraudulent cases are growing and it is becoming a global problem. Modern frauds are often complicated and invariably cross national boundaries, further compounding the difficulties associated with determining if a fraud has taken place and if so, who has perpetrated it. This makes the problem of seeking redress and recovery much harder: victims are confused and not sure what to do next, or whom they can turn to for help. They will quickly find that fraud is a low priority for local law enforcement,” Rahman said.
The risk of documentary credit fraud can be minimised if buyers and sellers check the background of their contractual partners before entering into commitments. “We recommend that the 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,” he mentioned.
The ICC-B chief said Bangladesh has been growing fast in the international trade. Both import and export are increasing at a 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,” he said.
Over two decades, ICC Commercial Crime Services (CCS) has saved its members literally billions of dollars by alerting them to the threats and highlighting the preventative measures they can take to protect themselves. It has also succeeded in getting fraudsters brought to justice and has helped members recover many millions of dollars thought lost. CCS also operates Fraudnet, a unique global network of law firms who specialise in tackling business crime, Rahman added.
About 40 participants from banks attended the workshop.