Import ( specially advance payment ) ,

Export , FDI , Buyers Credit , Suppliers

Credit , Joint Venture , EPZ etc. with the
reference to the Guidelines for Foreign
Exchange Transactions , Bangladesh.

Import
Import Trade Control
Import of goods into Bangladesh is regulated by the
Ministry of Commerce in terms of the Import and Export
(Control) Act, 1950 through:
1.

Import Policy Order (IPO)

2. Public Notices issued by CCI & E

Registration of Importers
In terms of the Importers, Exporters & Indentors
(Registration) Order 1981:
No person can import goods into Bangladesh unless Registered with
CCI & E or exempted
AD must ensure above conditions before LCAF issues /LC
opening/making remittance for import

Dealing with known customer

AD must ensure before opening & payments of LCs for
import:
1.

Deal only with known customers having a place of business in

Bangladesh and can be traced easily
2. Through an AD in the area where the holder of the LCAF is
resident
3. Obtain certificate regarding that no bill of entry is due/ overdue for
submission with previous banker.

LCAF
a) The ADs are authorized to issue LCAFs in conformity
with the IPO

All including Ministries /Govt. Deptt. Except ministry of

Defense required

LCAF before opening of LC

LCAF comprising 5 copies each, of these one marked For Exchange
Monitoring Purpose is to be used for opening & remittance purpose.

LCAF (Cont.)
b) The ADs will not issue blank LCAFs to their clients
Transfer of LCAF if required through Bank to Bank not with the client

c) Validity of LCAFs for remittance:

1.
2.

For capital machineries and spares: 18 months subsequent to the month

of issuance
All other purpose : 01 year subsequent to the month of issuance

Terms of Imports
Appropriate Incoterms in LC as per prevailed IPO
Usually import on CFR/CPT basis
Also on FOB, CIF, CIP, DAF, DES, DEQ & DDU is allowed
FOB basis subject to provisions of Para 13 of this chapter.

Use of correct HS Code

LCAF must quote HS Code as per First Schedule of
the Custom Act, 1969

Endorsement on LCAF
On the back of the exchange monitoring copy of LCAF
a. When LCs are opened state Taka equivalent at the ruling BC
selling Rate (spot)/actual forward rate
b. When amount is remitted Amount of remittance, IMP number,
LC number with date of opening & date of remittance

Cancellation of LCAF
On expiry of an LC unutilized partly or wholly, or on
cancellation or reversal of sale of foreign exchange, may be
cancelled with appropriate remarks.

Remittances in excess of LCAF value

Remittance in excess of the value of the LCAF is not
permissible without prior approval of Bangladesh Bank
Payment of normal bank charges in excess of LCAF may be
made & to be reported through TM forms

Imports on FOB basis

Freight & other charges payable on FOB basis are to be
adjusted against the relative LCAF value
Payment will be made in BDT at Bangladesh
A certificate (App. 5/8) to be given by the AD since shipping
company will not accept freight in Taka unless this
certificate is provided

LCAF for opening L/C & dishonored bills

LC to be opened only in favor of a client in whose name
LCAF has been issued
In other cases permission of CCI & E area office required
AD should not remit the proceeds where the name of the
importer on the bill of exchange differs with LCAF
Remittance against dishonored bill of other importer by a
new importer is permitted having valid LCAF.

Disposal of fully utilized or unutilized LCAF

Fully utilized to be forwarded by the ADs to the Bangladesh
Bank
Partially/fully unutilized LCAF should also be surrendered
to BB after expiry of the validity period for remittance.

Goods imported without LCAF

No remittance without a valid LCAF even though the goods
may have been cleared by the Customs
For approval of such imports, proposal should be submitted
to the Bangladesh Bank along with the attested copy of the :
a. Customs Bill of Entry
b. Relative penalty order together with full particulars of
the circumstances

Import against LCAF without opening LC

Selected items mentioned in the IPO

Exchange Rate on retirement of import bill

Rate prevailing on the date of lodgment

Letters of Credit and Remittance against imports

LCs covering imports LC to be opened only on behalf of
their own customers
The client participating in the trade
Payments to be received from the customer by debiting
their A/C or crossed cheque drawn on his other bankers

Terms on which LCs may be opened

All LCs must be Documentary LCs should provide :
I.

Full sets of Transport docs (shipped onboard) B/L /

AWB/ Truck Receipt
II. Signed Invoices & Certificate of Origin

Instruction to import through land port

a. Only one land port of entry in the LC
b. LC & amendment with other relative information to be
sent that port
c. Authorized Signature, contact phone & FAX of the AD to
be sent to that port
d. Bill of Entry or Certified Invoice to be collected from port
authority by the AD through their agent/representative
e. Payment terms without reimbursement/debit authority
f. SWIFT transmission of LC more than USD 5000 (USD
6000 in case of coal)
g. In case of release of goods, NOC with seal & AS number of
the signing official

Special Features of L/C

Clean /revolving/LC with realization clause(except EPZ
Company) should be referred to Bangladesh Bank
Transferable LC may be opened under Cash LCAF
No import from beneficiaries of banned Countries
Period for which LCs may be opened as per current IPO
L/C to be opened only against firm contracts Before opening
LC
Firm order for the goods to be imported has been placed
and accepted
LC should contain full description & unit price of the goods

Credit report
From Correspondent /Intl Credit Agencies (seyds /D& B)
Amount: Invoice $10,000 above , Indent $20,000 above
Validity: 12 months

Approved methods of payment

a. Not to banned countries
b. In freely convertible foreign currency to the country of
beneficiary/ origin /shipment.
c. Credit to NRT A/C of concerned bank abroad.
d. In case of foreign Loan/Grant as per agreement

Remittance against discrepant docs/docs received

directly by the Importers

a. Only after clearance of goods

b. After receiving customs bill of entry/customs certified
invoice

Advance remittances against imports

May be effected by the AD after obtaining:
a. Clients application along with undertaking (appendix 5/10)
b. The purchase contract with supplier specifically requires
advance payment
c. Repayment Guarantee from a foreign bank
d. RPG not required if less than $5000 for any items & less
than $ 10,000 from ERQ A/C subject to the following:
Importers do not have B/E overdue
The ADs shall have to be satisfied that repayment
guarantee is not obtainable
IPO in force shall have to be meticulously followed
It is ADs responsibility to arrange for repatriation of
the remittance made in advance in case non receipt of
the goods within the stipulated time

Advance remittances against imports (Cont.)

While opening BB L/C, the ADs should adjust the value of
advance payment to ensure that the value addition
requirement as stipulated in the IPO is not breached
Before effecting the advance payment, the ADs must obtain
Form of Undertaking (Appendix 5/10) duly signed by the
importer.
e. If no Repayment Guarantee then forward to BB
f. if goods not received in due time then report to BB
g. In addition to usual reporting, AD will submit attested copy
of the following within 7 days of advance remittance to BB:
I. Undertaking as per (appendix 5/10)
II. Copy of Repayment Bank Guarantee
III. Credit report of the Repayment Guarantee providing
bank

Forms for remittances against Import

a. All applications for payments for imports on IMP forms
b. AD will mark with bold letter G in IMP for Govt. Import

Submission of B/E and Certified invoices

Within 4 months from the dates of Remittances
In case of import by post /courier custom certified invoice
If value less than 5 of imports through post/courier,
custom certificate instead of Certified Invoice
Applications for extension of the time limit to be forwarded
to BB in cases of genuine difficulty ( Car Import)
Duplicate IMP to tally with the B/E & Invoice
If no material discrepancy then closes & preserves the file for
inspection of BB team
Cases with material discrepancy and non submission of Bill
of Entry within stipulated time should be reported to BB
AD will not open new LCs of the client having material
discrepancy and non submission of Bill of Entry

Loss of goods
If completely lost, duplicate copy of the IMP form should be
forwarded to the BB giving full particulars of the loss and the
manner in which the Insurance claim has been collected.
In case of partial loss authenticated copy of customs bill of
entry also to be submitted

LC on deferred payment basis

Capital machinery imports on up to 360 days
Industrial raw materials imports for own use of industrial
importers (including BB Lcs) on upto 180 days
Coastal vessels, oil tankers , oceangoing vessels & procured
for scrapping on up to 360 days.
Agricultural implements & chemical fertilizers up to 180 days
Life saving drugs (certified by Drugs Authority) up to 90 days
Additional payment must not higher than the LIBOR
For longer usance terms BOI approval is required

Payment of Import Liability

Failure in settlement of import liability as per Credit
/Contract terms may result in punitive actions including
revocation of AD licence

Back to Back LCs

The ADs may open BB LCs subject to
a. Against export LCs
b. By export oriented Industrial units operating under the
bonded warehouse system having valid IRC / ERC
c. Subject to observance of domestic value addition
requirement as per IPO ie BB LC within admissible %
d. Sufficient lead time of Master Export LC
e. Usance basis not exceeding 180 days
f. Under EDF or NFCD balance sight BB LC may be opened
g. Usance interest shall not exceeds LIBOR

Inland Back to Back LC

Against master export LCs
In favor of client having bonded warehouse license
Observance of value addition requirement
EXP/IMP is not required except for a EPZ enterprise
BTB import LC may also be opened against Inland
BB LCs in favor of the clients having bond license

Payment Settlement against BB L/C

Payment of BB LC shall be made on maturity out of proceeds
Bill of Entry is to be submitted before payment of BB LC
Payment to be made on maturity when export has not taken
Place/Proceeds have not been realized/realized export
Proceed is not sufficient to cover the BB LC Payment
In this case, post facto approval of BB is required
Failure of export is to be reported to NBR.
Copy of the letter to NBR reporting the export failure should be submitted to
BB along with the application for post facto approval of remittance

Payment Settlement against BB L/C (Cont.)

AD will watch on the stock of imports under BB LCs .
Any illegal disposal of stocks from the bond AD should
immediately inform concerned commissioner of customs & NBR

Retention & Use of foreign currency

F.C may be maintained in single pool for BB Bills payment
Funds from this pool may be used for different BB LC
payments of the same exporter
F.C may be retained for Payment of Cash import bills from
direct and deemed export earnings against payment :
a. due within 30 days from the receipt of export proceed
b. This amount in excess of allowable retention quota
c. After 30 days if payment not made to be enchased in BDT for excess
amount of Retention quota
d. A statement to be submitted to Bangladesh Bank on monthly basis as
per Appendix 5/15.

Deposit of Counterpart Fund in respect of

imports under non-project commodity
loans /credits/grants

Export
Export permitted subject to:
a. Declaration to repatriate proceeds (EXP Form)
b. Within specified period
c. As per procedure specified by Bangladesh Bank
Export exempted from repatriation of Proceeds
a.
b.
c.
d.
e.
f.

Sample as per Export Policy.

Travelers personal effects.
Ships stores and transshipment cargo
Govt./Military requirements under Govt. order.
Gift as prescribe by Export policy.
Parcel which accompanied by BB certificate that it does not
involve any transaction in Foreign Exchange
Export Declaration
All exports, to which the requirement of declaration applies,
must be declared on the EXP Form (Appendix 5/19).

Methods of receiving payment against exports

In freely convertible foreign currency
In BDT from a Non Resident Taka A/C
Barter/ Bilateral agreements as per case to case
instructions of BB.

Certifying EXP
Before certifying EXP must examine ERC from CCI&E.
ERC number should be quoted on the relative EXP
AD will ensure that each set of the forms is duly filled in
Enter record in Export Register (Appendix 5/20)
Exp No. AD Code(4 digit) + Serial (5digit) + Year (2 digit)
Certification putting signature and seal of the authorized
official of the AD

AD must ensure before certifying EXP

Arrangements for realization of proceeds within the
prescribed period,
Arrangement to obtained title of goods in fovour of AD
through Transport Docs
The EXP Form is signed either by the exporter or his agent
holding valid legal Power of attorney
Ensuring bonafideness of the buyers/consignees abroad
Any suspection about collusion with the Buyer & Exporter
to be reported to BB
For delay in repatriation or non-realization of export
proceeds following will be responsible/liable to punitive
action under FER Act
1. The exporter
2. The AD
3. Its officials certifying the EXP.

Making out and delivery of shipping docs

Transport documents drawn only to the order of AD
Delivery of Transport docs to the authorized representatives of
the ADs concerned and to none else.
This rule is not applicable for Type A industry of EPZ
In case of foreign payment received in advance AD may endorse
in favour of foreign buyer directly.
To avoid demurrage when goods reached before sending
documents, Telegraphic Delivery Order may be issued in favor of
correspondent abroad
For Air shipment AWB be drawn on to the order of the Bank of
importing country
When full proceed received in advance, AWB to be drawn on to
the order of the AD. Then AD Will give endorsement in favor of
foreign buyer directly
Above direction exempted on the following purposes:
(a) Export exempted for repatriation ( b) Perishable item
(c) EPZ A type company.

Negotiation of Export Bills by using FCRs or

HAWBs
LC/Contract allow negotiation against FCR/HAWB
Related freight forwarder must enlisted with BB
AD will ensure timely repatriation of proceeds

Disposal of EXP Forms

I.

Custom Authority after signing will send original copy of

EXP to BB & other copies will return to the exporter
II. Duplicate copy of EXP form to be sent to Bangladesh
Bank within 14 days from the date of shipment
III. After receipt of proceeds AD will certify on reverse of the
Triplicate Copy & Submit to BB with as usual returns
IV. Quadruplicate copy of EXP will retain with AD for record

Export Formalities
After certify by the AD, EXP should be submitted to
custom authority along with shipping docs
Exporter will submit documents to AD along with
remaining copy of EXP forms
All shipping documents must be passed through the
medium of an AD within 14 days from the date of shipment
ADs should compare the signatures of BL with the
specimen signatures of the authorized officers of the
Steamer Companies to ensure genuineness of the
documents
Scrutiny the invoice & other docs to protect the under
valuing of Export
If there is small difference between EXP value & docs
value, AD may accept & negotiate
After negotiation AD will complete the certification in the
space on the Duplicate EXP Forms

Deduction of commission, brokerage or

other trade charges
First full proceed to be realized
Up to a maximum 5 % can be remitted without BB permission
More than 5% as per application by exporter through their
banker to BB

For Books, Journals and Magazines published in

Bangladesh
33.5% discount allowed without approval of BB
More than 33.5% BB approval required

Using appropriate incoterms

Incoterms must be used in EXP
EXW, FCA, FOB, FAS,CFR, CIF, CPT, CIP and DAF allowed
These must be stipulated also in Export LC/Contract.
AD will inform exporter about risk and responsibility of the
above Inco-terms
FOB value, Freight, Insurance and Other charges to be
shown in the EXP separately

Prescribed period foe repatriation

4(Four) months from the date of shipment
In case of delay, extension of time from BB can be taken
Exports of raw jute and jute goods on upto 360 days

Reporting of overdue cases

Monthly statements on outstanding Export Bills ( App. 5/21)
Overdue case to be reported to BB monthly basis as per
Appendix 5/22.

Part drawings and advance remittances

AD may negotiate partial drawing provided they obtain an
undertaking from the exporters that they will realise the
balance within the prescribed period.
Partial amount received in advance to be reported by AD on
"EXP form Not Attached Voucher" (Appendix 18 of Vol-2).
The triplicate copy of the EXP Form should be submitted to
BB after full value has been received
Short shipments
In case of short shipment less than EXP values a declaration
to be submitted to customs
Customs will sent the short shipment certificate to the BB &
copy to the Exporter for AD

Shipments lost or damaged in transit

The ADS must see that an insurance claim is made as soon
as the loss is known
Triplicate copy of EXP to be returned to BB mentioning:
i. Amount of insurance (including currency name)
ii. Name of the Insurance Company
iii. Place where the claim Is payable
Receipts of Advance Remittances against exports
Obtain declaration from beneficiary on Advance Receipt
Voucher (ARV) Certify purpose of remittance
Shipment on FOB terms
ADs should verify the B/L that freight has not been prepaid
in Bangladesh
If freight/ insurance paid in Bangladesh but export docs
in FOB basis to be reported to BB

Export Proceeds Realization Certificate

against direct & deemed export
PRC to be given after full confirmation that the proceeds

realized as per following manner:

PRC in prescribed format : For direct export (Appendix
5/23) & for deemed export appendix 5/ 23A
AD will issue PRC & a copy to be submitted to BB for post
facto verification
PRC issued against deemed export, their additional
information to BB with usual returns
AD will send a monthly statement of issuance of PRC to
BB
Specimen signature of officials signed the PRC to be sent to
Bond Commissionerate, Customs, DEDO

Export of software & data entry/ processing

services
Proceeds can be realized against above purpose & reported

to BB as per following systems:

When export is undertaken in physical form(compact
disc/floppy disc) EXP procedure should be observed
When export is undertaken in non physical form
(VSAT/Internet) :
AD will maintain a Register for Export of Software & data
processing/ entry through Electronic Media(Appendix
5/24)
Declaration to be taken in C Form & reported to BB
Period of repatriation i.e 04 months from the date of
export also applicable in above cases
Overdue export bills to be reported to BB (for physical
form appendix 5/22 & for non physical form appendix 5/25

EXPORT FROM THE EXPORT PROCESSING ZONES

Type A ( 100 % foreign owned)
Type B (joint venture)
Type C ( 100 % Bangladeshi entrepreneurs)
Repatriation of proceeds of exports from the EPZs
Usual declaration in EXP form is applicable
For identification of Export from EPZ should be
mentioned in EXP
Disposal of Export Proceeds
100 % Export proceeds may be retained , sent abroad & en-cashed by A
type company to meet payment obligations
Up to 80 % Export proceeds may be retained , sent abroad & encashed by B & C type company to meet payment obligations other than
garments industry
Up to 75 % Export proceeds may be retained , sent abroad & encashed by B & C type company to meet payment obligations other than
garments industry

Sale Bangladeshi goods to EPZ Enterprises

Shall be treated as export from Bangladesh
EXP Form is required.
Normal rules for Repatriation of Export Proceeds is also
applicable
Opening Import L/C in favor of EPZ Enterprise (A, B & C)
Opening Import L/C / BB L/C without BB approval
Payment out of F.C Earnings or F.C brought in from abroad
No Local F.C can be used
In case of B & C domestic value addition required
In case of non availability of F.C payment to be made from external
sources, for B type foreign partner will arrange his portion from abroad
For payment of Machinery if FC not cover , BB approval required but BB
will provide permission up to Local partner share by BDT to FC

Working Capital Loans to B & C Company

Working capital as per Banker Customer relationship
Discounting of Accepted Bills of A & B by 50 % of NFCD Balance

Credit facilities to industries in EPZ

A Types
A types industry may receive short term loan from overseas bank
through an AD & to be credited in F.C A/C
Assets owned by this A type company may be given as collateral
security for such credit facility
Repayment of principal & interest without approval of BB
No local fund not to be used for repayment

B Types
B type industry may also be take Loan but no asset can be given as
collaterals in favor of non residents
Guarantee in favor of B type company against this Loan may be given
taking prior permission of BB
TK loan may be granted in favor of B type company up to 100 % of
Machinery value bought in by foreign partner , but will not exceed
equity of local partner without approval of BB

C Types
Credit facilities to C type company like the company outside EPZ

FOREIGN INVESTMENT IN BANGLADESH

Foreign investors are free to make investment in
Bangladesh in the industrial enterprises excepting a few
reserved sectors.
An industrial venture may be set up in collaboration with
local investors or may even be wholly owned by the foreign
investors.
No permission of the Bangladesh Bank is needed to set up
such ventures if the entrepreneurs use their own funds.
However, to avail of the facilities and institutional support
provided by the Government, entrepreneurs/sponsors may
secure registration with the Board of Investment (BOI).

Issue of shares in favour of non-residents

Prior permission of the BB is not required for issue of

shares in favour of non-residents against foreign investment

in Bangladesh subject to the following conditions:
a. The industrial venture will have permission from the
Registrar of the Joint Stock Companies and Firms
(RJSCF)/ The Securities and Exchange Commission
(SEC) about its capital issue.
b. Against freely convertible foreign exchange brought in
from abroad through banking channel & encashed in Tk.
c. Against import of capital machinery payment of which
must be made from abroad & cleared from Customs first

Issue of shares in favor of non-residents (Cont.)

d. Foreign Exchange Investment Department, Bangladesh
Bank, Head Office must be informed through the
concerned AD about the issue of shares to non-residents,
within 14 days of such issue, along with the following
documents/papers:
I. attested copy of the permission for the capital issue
accorded by the RJSCF/SEC;
II. attested copy of the registration, if any, of the foreign
investment in the industrial ventures accorded by the
BOI
III. Copy of Encahsment certificate of F.C brought in
IV. Copy of B/E for Machinery along with Import permit,
Invoice , BL / AWB etc.

Transfer of Bangladeshi shares/securities

Transfer of Bangladeshi shares and securities from one
shareholder to another irrespective of their nationality/
residency would not require BB approval
No intimation to BB is required in case the transfer is
effected between residents
For the transfer of shares not listed in the stock exchanges,
from resident to non-resident, non-resident to resident and
non-resident to non-resident, Foreign Exchange
Investment Department, BB, HO should be informed
through the concerned AD within 14 days of such transfer
with following documents:
a. Copy of encashment certificate authenticated by the concerned
AD of foreign exchange in Taka credited to the account of
transferor in case of transfer of shares from resident to
nonresident
b. attested copy of the permission for the transfer accorded by the
RJSCF/SEC;
c. attested copy of up-to-date Schedule-X

Temporary Non-Resident Taka A/C for Foreign

Investors
ADs may open in the name of the proposed
company/enterprise
of foreign investors without prior approval of BB
A/C may be credited with remittances received from abroad only
Upon registration/commencement of the business, a new
account in the name of the company may be opened
following usual procedure
However account opened previously should be closed
Balances lying therein shall be transferred to the new A/C
If, for any reason, the proposed investment does not take
place, the amount, after meeting the required expenses, may
be allowed to be repatriated without prior approval from BB
ADs shall report opening and closure of such accounts to
F Ex. Investment Deptt. and F Ex Operation Deptt. of BB
immediately along with attested copy of form 'C'/TM form
with particulars of transactions.

Shares of the public limited companies listed with

stock exchange(s)
Prior approval of BB is not necessary for remitting the
sales
proceeds of securities held by non-residents
In such cases, repatriable amount must not exceed the
market price of securities prevailing in the stock exchange
on the date of sales
Shares of the public limited companies not listed with stock
exchange and private limited companies
Prior approval of BB is required for repatriation of sales
proceeds of non-residents equity investment in the:
I. public limited companies that are not listed with the
stock exchange companies
II. private limited companies

Portfolio investment by non-residents

Non-resident persons/institutions including non-resident
Bangladesh nationals may buy Bangladeshi shares and
securities
Against freely convertible foreign currency remitted from
abroad through the banking channel
Repatriation of dividend/earnings and sale proceeds shall be
made through a Non-resident Investor's Taka A/C (NITA).

Supplier's credit
Industries for opening of import LCs on usance terms
against supplier's credits as per general or specific BOI
approval
All proposals for supplier's credits, financial loans from
institutions or individuals and debt issues in capital markets
abroad shall require prior authorization of BOI
AD will forward a copy of BOI approval letter & the loan
agreement to 'External Debt and Grant Section', Foreign
Exchange Policy Department, BB , HO
Short term suppliers credit of up to 360 days from suppliers
/ buyers abroad are, however, subject to the guidelines of
BB for current commercial transactions as per Chapter-7

Remittance towards repayment of

Supplier's credit
Repayment installments of interest and principal may be
remitted abroad by the ADs without prior reference to BB
provided that:
(i) The amounts of interest and installments of principal
repayment are remitted only by the AD through whom the
foreign credit was originally received
(ii) AD will ensure receipt of B/E before any installment of
interest/principal can be remitted
(iii)Attested copy of the B/E along with copy of the relative
credit agreement and repayment schedule should be
forwarded to the B B by the AD
(iv) Reporting remittance of installment of principal /interest
in the usual monthly returns/schedules

Guarantee towards repayments of foreign

supplier's credit
Prior permission of BB required for Issuance of repayment
guarantees against foreign suppliers' credits
Short term supplier's credit from abroad
Availing of short term suppliers' credits from abroad in the
form of imports under deferred payment LCs will be subject
to compliance with the instructions at Para-33, Chapter 7

Q&A
46