Rinzin Wangchuk

Business people in Phuentsholing are saying that there is no uniformity in the implementation of Anti-Corruption Commission’s (ACC) rules regarding seized items and those business enterprises suspended by ACC.

This follows a recent case citing where a furniture unit suspended in September this year is back in operation. A source said that the unit was given 90 days to complete its pending orders from customers with options to import and sell all other available stocks.

The issue here, according to sources, is that back in 2015 many businesses were suspended by ACC where their stocks were auctioned off without any leniency.

The furniture unit had allegedly colluded with an agency’s procurement section, according to Kuensel sources. They then inflated the price. The procurement officer was supposed to take the inflated amount. It is a case of collusion and bribery. However, some sources said that it is a fronting case.

In a similar case, ACC allowed two retail shops run by one businessman in Thimphu to sell his stock of goods after the shops were suspended for more than a month from operation. The commission closed both shops on July 25 after finding a prima facie of corruption in connection with alleged commercial bribery and tax evasion while importing goods through the Mini Dry Port (MDP) and other designated areas in Phuentsholing last year.


ACC’s stand

An ACC official said that the ACC’s stand in 2015 and now did not change although the form of corruption is different.

In 2015, the ACC investigated rampant illegal businesses that were run and managed by non-Bhutanese in the name of a Bhutanese license.

The official said that the ACC took the responsibility to clear off the stock balance of suspended business firms through public auction and the proceeds were accounted into government escrow account for final settlement after adjudication is completed. “With an acute shortage of resources at our disposal, it is a huge administrative burden for the commission without making economic sense,” he said.

In the present circumstances, according to ACC officials, suspended business entities are given permission primarily to fulfil contractual obligations, mostly government institutions that they entered into prior to it being suspended. “The ACC accorded this consideration only after thorough verification of contract agreements and supply orders,” he said. “This consideration is not a new invention to favour any particular business entity.”

He added that the Commission in all circumstances does allow development works to continue despite the fact that the contractor/supplier was found involved in corrupt practices elsewhere.

“The objective of suspension is to prevent further perpetuation of corruption and ultimately create deterrence in the society,” one ACC commissioner said. “Citizenry at large must feel that corruption is high risk and low benefit.”


Fronting cases

More than 50 business enterprises including 18 importers in Phuentsholing were prosecuted by the Office of the Attorney General (OAG) for bribery and tax evasion in 2015 and 2016.

In 2015 alone, ACC had not only investigated 30 cases involving 36 licenses run by non-Bhutanese but also seized and auctioned grocery items and alcoholic beverages worth more than Nu 25 million. ACC had sought restitution of Nu 594.790M from these cases to the State.

ACC’s findings then indicated that implementation and enforcement of laws, rules and regulations were weak. In many cases, individuals responsible for the enforcement of the laws were indirect beneficiaries of fraudulent practices.“Fronting continued to remain a chronic problem since the 1990s,” ACC report of 2015 stated.

ACC had observed that the most common cases were bribery, deflection of goods across the border, forgery of invoices and Customs Declaration Forms and trade-based money laundering. In order to tackle these businesses that were fronting with great impunity, ACC had initiated investigation in Phuentsholing and those involved in fraudulent cases were prosecuted.

Meanwhile, some Phuentsholing residents also say that the fronting still prevails in the country’s commercial hub.

License holders in Phuentsholing, Gelephu, Samdrup Jongkhar and Samtse towns were required to sign an undertaking that they will not engage in fronting. However, after signing the undertaking, neither did many license holders abide by the rule nor did the authority concerned adequately monitor its implementation as many licenses were found to have been leased to non-Bhutanese for a monthly commission.