Phuentsholing, Bhutan: Over 300 Individuals Questioned in Anti-Corruption Crackdown on Financial Fraud
Phuentsholing, the commercial hub of Bhutan, has become the epicenter of a massive anti-corruption investigation by the Anti-Corruption Commission (ACC). In this article, we provide insights into the investigation, its early discoveries, and its future focus.
Massive Anti-Corruption Investigation in Phuentsholing
Since April 20, 2023, more than 300 individuals, including senior officials, have been questioned in connection with commerical bribery and fraudulent practices in Phuentsholing, Bhutan.
- 34 people have been detained
- Revealed instances of commercial fraud and bribery
- Aimed at zeroing in on the nexus of fraudulent commercial activities in the city
Early Discoveries and Fraudulent Practices
The commission’s latest investigation was initiated after the uncovering of corrupt practices involving the raiding and closure of shops in Phuentsholing.
Tax Evasion
Methods of Forgery and Fraudulent Imports
The ACC discovered a scheme to evade taxes, resulting in significant revenue loss for the Bhutanese government. This tax evasion was achieved through methods such as:
- Forgery of customs documents
- Fraudulent imports
- Deflection of goods
- Wrongful declarations
- Other illicit activities
The commission estimated that Bhutan had lost millions of Rupees through these fraudulent schemes.
Collaboration with Non-Bhutanese Individuals
Some non-Bhutanese individuals were found to be collaborating with Bhutanese clearing agents to forge and tamper with Bhutanese customs documents. The illicit proceeds, amounting to millions of Indian Rupees, were then repatriated using Real-time Gross Settlement (RTGS), demand drafts (DD), and telegraph transfers (TT).
Suspension of Business Licenses and Shop Closures
The commission has suspended over 50 business licenses and closed approximately 20 shops due to prima facie evidence of corruption.
- Lhayang Enterprise
- Yu Dem Enterprise
- Tama beer agency
- Tama enterprise
Focus of the Investigation Moving Forward
ACC officials are now looking into possible collusion between bank, trade, revenue, and customs officials with importers and illegal currency transactions.
Racket Involving Bhutanese ATM Cardholders
The commission discovered a racket involving Bhutanese ATM cardholders who were selling Rupees to non-Bhutanese individuals at a premium. The investigation has resulted in over 20 ATM cardholders being interrogated, who had illegally withdrawn nearly 10 million Rupees.
- Bhutanese account holders will be charged for aiding and abetting the crime
- Fronting businesses and ATM cardholders will face charges for active and passive commercial bribery
The Future of the Investigation
The investigation is expected to continue until December.
Rebuilding the System
The ACC’s focus is on streamlining and correcting systems at the following offices:
- Regional revenue and customs
- Regional trade and industry
Preventing Future Occurrences
Businesspersons in Phuentsholing commended the ACC’s efforts, but urged the commission to ensure that such incidents do not happen again.
Penalties for Corruption
The ACC Act 2011, Section 66 and 67, outlines penalties for promising, offering, giving, soliciting, or accepting advantages in breach of duties.