Will the smartphone market remain hostage to smugglers?

Identified smugglers in the mobile handset market are holding the regulatory authority's headquarters hostage under the guise of a blockade, creating a standstill. By blocking roads and causing extreme suffering to hundreds of citizens, they are demanding the continuation of unrestricted opportunities for smuggling! Bangladesh is truly a strange place. This is probably a world record! In no other country besides Bangladesh have a group of smugglers dared to implement such so-called programs of gathering on the streets and paralyzing public life.

The root cause of the incident is that the telecommunications sector regulatory authority BTRC has announced the launch of a system called the National Equipment Identity Register (NEIR). Under this system, ordinary users in the country will have the opportunity to use mobile handsets that are legitimately produced or imported at affordable prices. At the same time, they will be protected from the fraud of buying fake, refurbished handsets brought through smugglers. It will be possible to ensure overall security for ordinary users, including safe financial transactions on digital devices. Due to the dominance of smugglers, the government is losing huge amounts of revenue in smartphone imports. Once NEIR is launched, customs and tax evasion in this area will also stop.

Smugglers, through their own PR agency, have stated as the reason for starting their movement that they have hundreds of crores of taka worth of handsets in stock. Even if we assume they have 100 crore taka worth of handsets in stock, with the existing 57 percent tax at the import stage, the government has lost 57 crore taka in revenue due to handsets coming through illegal channels via these smugglers. If the amount of handsets imported and stockpiled by smugglers is 1000 crore taka, then the amount of tax revenue evasion stands at 570 crore taka. Besides, there are also strong allegations of hundreds of crores of taka being laundered from the country over the past two decades through these smartphone market smugglers.

The question may arise: how justified is imposing 57 percent tax at the import stage? But the counter-truth is that even when the tax amount on handset imports was 20 percent, smugglers' thriving business existed. Then, when the world-famous brand Samsung established a factory in Bangladesh for the first time, the logic for increasing taxes at the import stage also became stronger. Because not only Samsung but also domestic brands like Symphony and Walton had established factories in the country and started producing handsets. Through this, after the garment industry on the international stage, the mobile handset industry created an opportunity to proudly display the "Made in Bangladesh" sticker. To brighten this prospect and encourage more global brands to establish factories in Bangladesh, the tax rate at the import stage was increased. Discouraging imports through high tax rates to encourage local emerging industries is also a major policy position of developed countries.

Due to this policy position of the government, factories of all major brands except iPhone have been established in the country over the past decade. To establish these factories, domestic entrepreneurs have taken loans from banks and are paying installments on those loans. Along with this, they are paying VAT and taxes to the government. They have created workforce for the information technology sector suitable for the future of the country and created vast numbers of new employment opportunities. Will the state not stand with these people who took great risks to establish factories and contribute to the country by creating new employment?

It is from this question that the issue of launching the NEIR system comes forward. Alongside this, support for launching this system also came from law enforcement agencies. Because crimes using digital devices are increasing day by day. But due to the lack of a regulatory tool or an effective device database, identifying actual criminals was becoming difficult. One thing must be understood: a mobile phone is no longer just a device; it is a security center for people's personal identity, financial information, and daily life. Unregistered handsets, especially smartphones, are convenient weapons for criminals. Through these, fraud, extortion, cybercrime, and even communication for major crimes are conducted. For this reason, launching NEIR was a demand of the time.

In the past, in 2018, when the regulatory authority took initiative, this NEIR implementation did not happen due to intervention by influential figures of the then government who were connected with the powerful smuggling syndicate. Because these smugglers were their major tool for laundering money abroad. When BTRC again decided to implement NEIR during the current interim government, these smugglers took to the streets. Since battery-powered auto-rickshaws, extremely risky vehicles, can now freely travel on main roads in Dhaka, smugglers can also take to the streets with their chests puffed out!

One thing must be understood: importers and smugglers are not the same. Importers are those who import through legal channels by paying taxes and VAT to the government. But smugglers sometimes steal, sometimes collect used discarded handsets from dumping stations, sometimes buy refurbished handsets from factories at very low prices, or take advantage of price reductions from international distributors' 'stock clearance' to bring handsets into the country. In no case do they pay taxes or VAT to the government.

Those who were importers in the handset market since 1996 have become manufacturers by 2018 due to the reality of the times. For this reason, the name of the Bangladesh Mobile Phone Importers Association (BMPAI) has been changed to Bangladesh Mobile Industry Owners Association (MOIB). But the circle of smugglers has remained the same. They had no organization all this time. Just a few days after the regulatory authority decided to launch NEIR during the interim government, an organization of these smugglers emerged in the name of some business community. Smugglers are now a dignified business community! Wonderful.

Anyway, under the banner of this so-called business community, blockades and protest rallies are now taking place. Using a PR agency, a suddenly erected organizational banner has been used to organize roundtable discussions. Probably, many of the distinguished persons participating in this roundtable do not know that the platform they are speaking on is a platform for protecting smugglers! At the same time, various misinformation and rumors are also being spread from these banners and platforms of smugglers. Even though the regulatory authority has clearly provided instructions and explanations about all aspects of the NEIR system, these rumors are not stopping.

I say with great regret that BTRC is not conducting much publicity in the media about this NEIR system. The most confusion in this system can arise regarding the 'deregistration' system. That is, if someone wants to use another SIM card in their used handset, when they deregister the handset and replace the SIM card, the device will automatically be newly registered. This system is very simple. But common people may have some difficulty understanding it at first. For this reason, multimedia advertisements should be broadcast on TV, on large displays beside roads, and on OTT platforms to show how easily ordinary people can complete this process using their own devices. Advertisements about this should also be repeatedly broadcast online and in newspapers.

Even though there is a specific announcement to launch this NEIR from December 16, the great Victory Day, such awareness advertisements are not yet being seen from the regulatory authority. For this reason, smugglers are getting more opportunity to spread misinformation. I think if BTRC and the Posts and Telecommunications Division officials' several group foreign tours are stopped for this year, there will be no shortage of money for broadcasting these advertisements.

NBR, the regulatory authority of the tax system, bears major responsibility for the rise of smugglers. Because these smugglers got the opportunity to smuggle crores of taka worth of handsets through airports, seaports, and land ports due to the failure or collusion of these customs officials. These smuggling establishments' Facebook pages and websites are the main tools of fraud, and the showrooms in large shopping malls are also centers of fraud.

It is natural for smugglers to commit fraud. But right under the nose of so many government administrations, taking trade licenses from city corporations, opening showrooms, and continuing fraud day after day? Whose failure is this? There is not even any authority to protect defrauded customers or to file complaints!

When BTRC announced the launch of NEIR, NBR should have thought about creating a database of handsets in various smuggling shops until November 30 and specifically reducing their customs rates and declaring them legal. Then BTRC would have collected their IMEI numbers and registered them on the NEIR server.

At the same time, BTRC should have coordinated with the two city corporations to take steps to cancel the trade licenses of all shops of the smugglers' so-called business community. Then, if illegal handsets were found, trade licenses should be canceled without notice and new trade licenses should be issued with conditions of fines of specific amounts. Then we would not have to see this handful of smugglers' road blockades and jumping around today. But even now, seeing BTRC's reluctance in extensive awareness campaigns, NBR's perfunctory position, and the city corporations' indifference, I am very concerned about the success of launching NEIR activities. Still, I want this good initiative of the regulatory authority to succeed. The country cannot remain hostage to smugglers like this.

Rased Mehedi, Editor, Views Bangladesh and Former President, TRNB