Assignment on
Summary on Export from Bangladesh
Introduction
1.1 The word export is
derived from the conceptual meaning as to ship the goods and services out of
the port of a country. The seller of such goods and services is referred to as
an “exporter” who is based in the country of export whereas the overseas based
is referred to as an “importer” (foreign buyer). In international trade
“exports” refers to selling goods and services produced in home country to
other foreign markets.
1.2 Bangladesh exports about 168
different products and services to almost 186 countries. The main exportable
are Readymade Garments, Knitwear, Home Textile, Frozen Food, Leather &
Leather goods, Jute and goods which contribute near about 89% of our total
export. On the other hand the main export destination of Bangladesh are USA,
Canada, EU Countries including U.K, Germany, France, Italy, Sweeten etc
contributing almost 93% of total export. The export statistics reveals that Bangladesh is
proceeding with positive export growth since 1974-75 . Anexxure-17 presents the
export trend from the year1974-75 to 2010-11 as well as the export performance
in July-June, 2011.
2.
Procedure of Export
2.1 A company or
individual businessmen with trade license is capable of doing export business.
But before that he/the company has to obtain export registration certificate
(ERC) from the office of Chief Controller of Import and Export (CCI&E),
111-113 Motijheel Commercial Area, Dhaka . Generally
Trade License, Bank Balance Certificate, Membership from respective trade
associations are required for obtaining ERC.
2.2 For starting a
business in Bangladesh ,
it starts with registering the company name at the Office of the Registrar of
Joint Stock Companies & Firms. The office is located at 24-25 Dilkusha, Commercial
Area, Dhaka . This Office accords registration
of Companies, Associations and Partnership Firms under the Companies Act, other
related acts, rules, orders and ensures lawful administration of them.
2.3 The new entities
should also obtain trade license from the city corporation where it is located.
Depending on the type of the business it may also have to obtain license or
certificate from BSTI, BRTA, etc.
2.3 For some products the exporters
have obtain quality assurance certificate from BSTI/ Department of Fisheries
(DOF)/ Respective Trade Associations etc.
2.4 The exporter can
export with or without Letter of Credit (LC). The Contract/ Agreement with
foreign buyer or CAD or Advance TT methods etc. are also allowed for export.
The exporters then submit EXP form to bank and prepare bill of export. With all
these documents exporters then approach at the customs authority of the port
through which they want to ship his exportable. After examining all the papers
the customs authority allows them to export and after boarding the products the
authority gives them a bill of lading. After shipment the customs authority
assures them stamping a seal in the back of bill of lading and provide Export
General Manifest (EGM).
3. Export Law, Rules and Policies
The Export and Import Control Act
1950 (Annexure-1) provide the Government power to administer the import and
export of Bangladesh
under which a three yearly Export Policy is published. The Export Policy (Export
Policy 2009-12, Annexure-2) generally guide the over all export of Bangladesh and
help facilitate the exporters. The salient features of the Export Policy
2009-12 are as follows:
3.1 Products which cannot be
exported and which can be freely exportable
3.1.1 Export Prohibited
Products: Some Products cannot be exported. The list of such prohibited
products can be found in Annex -1 of the Export Policy 2009-12.
3.1.2 Products under
Conditional Export: Products which are exportable under some conditions can be exported only after
fulfilling those conditions. Such products have been listed in Annex-2 of Export
Policy 2009-12.
3..1.3 Exportable
Products: All other products except the products enlisted in Annex-1 and
Annex-2 of the Export Policy 2009-12 i.e. export prohibited products and the
products under conditional export shall be freely exportable.
3.1.4 Export of Samples
which don't have commercial values: Samples of exportable can be exported freely but with
some conditions outlined in para 2.2.1.2 of Export Policy 2009-2012.
3.2 Entre-pôt and Re-export Trade
Entre-pôt trade and re-export
shall have to be conducted under the procedures stipulated in the Public Notice
No. 42 (2003-2006)/import dated June 28, 2005 (14 Ashar 1412 Bangla) (Annexure-3)
issued by the Office of the Chief Controller of Import and Export.
3.2.1 Entre-pôt trade
means the export of an imported product at a price at least 5% higher than the
import price. No change whatsoever in the quality, quantity, shape or any other
aspect is necessary in this respect. Products under entre-pôt trade shall not
come out of the port boundary. However, the products can be brought out of the
port boundary under special authorization.
3.2.2 “Re-export” means
the export of an imported product within a specific period of time with a value
addition of at least 10% to the imported price by changing the quality or shape
or both of the products by means of local reprocessing.
3.3 Export facilities and
incentives
The government formulates the
Export Policy principally with a view to facilitate the exporters so as to
develop and promote export of Bangladesh .
Chapter 3-7 of the Export Policy detail the techniques of export development
and of providing facilities to the exporters. The policy details the lists of
export facilities. Chapter-1 of the Export Policy 2009-12 introduces the title
of the policy, its scope and strategy, Chapter-2 describes the general rules of
export, Chapter-3 explain export diversification mechanism, Chapter-4 lists the
general facilities of export, Chapter-5 describes about sector based facility,
Chapter-6 presents about service export and Chapter-7 highlights some special
facilities and incentives.
3.3.1 Cash
incentives: As listed in Annexure-4, for 17 exportable, the government is
providing 5-20% cash incentives against FOB price of exported items. The
exporter can directly claim for cash incentive in his merchant bank.
3.3.2 Duty Drawback:
Duties which are paid at customs authority is refundable in case of re-export business
or imported materials which after making finished products will be exported.
3.3.3 Bonded Facilities:
For bonded ware house with a view to 100% export materials can be imported
without any duties.
3.3.4 Assistance in searching for foreign
market: For exploring foreign market Export Promotion bureau (EPB)
organize/help the exporters participate about 30-35 international trade fair
every year. EPB generally bear the costs of stalls including other incidental
costs. Normally the exporters will have to bear only traveling and their accommodation
cost. Besides, EPB and Ministry of Commerce often organize Marketing Mission
abroad for searching new export market. The Mission comprises representatives from
business leaders and exporters.
3.3.5 Export Loan at
lower rate of interest: At only 7% rate of interest export loans are being
provided. Besides, there is a fund named Export Promotion Fund (EPF) in Export
Promotion Bureau (EPB) which provide export loan for ICT and handicrafts
exportable at only 4.5% rate of interest without any co-lateral. There is an
Export Development Fund (EDF) in Bangladesh Bank to provide export loans up to
USD 400 million(Annexure-5).
3.3.6 Awarding CIP
status and National Export Trophy: Every year CIP status (Annexure-6) and
National Export Trophy (Annexure-7) are awarded to the best exporters of
different sectors in recognition of producing new products, diversifying of
products, enhancing exports, etc.
4.
Export Preferences to (trade relations with) Foreign Countries
Frequently Asked Questions (FAQ)
1. I want to do business. How
can I start a business?
Ans: To start a business
at first you should have Tax Identification Number (TIN)/certificate and
especially need a trade license? For Joint business or company you need
register your company. in Office of the Registrar of Joint Stock Companies
& Firms. The office is located at 24-25 Dilkusha Commercial Area, Dhaka . This Office accords registration of Companies,
Associations and Partnership Firms under the Companies Act, other related acts,
rules, orders and ensures lawful administration of them.
2. From where can I get a
trade license?
Ans: For trade License you
can apply to City Corporation, Pourashova or Union Parishad.
3. How can I register my
company?
Ans: For registration of
company name you need approach Office of the Registrar of Joint Stock Companies
& Firms. The office is located at 24-25 Dilkusha Commercial Area, Dhaka . This Office accords registration of Companies,
Associations and Partnership Firms under the Companies Act, other related acts,
rules, orders and ensures lawful administration of them.
4. Having a trade license can
I start export business?
Ans. No, for export
business you need to get Export Registration Certificate (ERC) also.
5. How can I get ERC?
Ans: To get Export
Registration Certificate (ERC) you have to apply to the Office of the Chief
Controller of Import and Export (CCI&E) in prescribed form. Along with the
application you have to submit the following documents:
- Copy of trade license
- Nationality certificate issued by Ward Commissioner or Union Parishad Chairman (for Bangladeshi nationals)
- Income tax payment certificate of the previous year (in applicable cases)
- Valid membership certificate from the Chamber of Commerce or Registered Trade Association
- Bank solvency certificate
- Partnership deed or Incorporation certificate
- Photograph – 2 copy.
Prescribed form and other related
information are provided in the official website of the CCI&E. The web
address of CCI&E is www.ccie.gov.bd
(6) For export should I need
any quality assurance certificate?
Ans. Yes, in most cases
you need quality assurance certificate. These kinds of certificate are being
issued by some authorized office/organizations/trade associations like, Export
Promotion Bureau(EPB), Department of Fisheries(DOF), Bangladesh Standard and
Testing Institute(BSTI) and some other Trade Organizations.
(7) What is compliance in
export business?
Ans: In export business
compliance means meeting the foreign buyer requirements. Sometimes the foreign
buyers/buyer country/countries impose some special conditions on quality
issues, working environment in the factory, etc. These requirements are known
as compliance.
(8) For export should I need
Government Permission?
Ans. Other than restricted
items enlisted in Annex-1(export prohibited items) and Annex-2 (conditional
export items) all the products are freely exportable and don’t require any
export permission from Government. For conditional export items you need
clearance from the appropriate authority as mentioned Annex-2 of the Export
Policy 2009-2012.
(9) I will buy some finished
products and then again export it at higher rate. Is it possible?
Ans: Yes, you can but
under some conditions i.e. in that case your export will be Entre-pôt and
Re-export you need to follow the rules and procedure laid in respective policy
or circulars which is attached here with as Annexure-3)
10. How can I get cash
incentive for my exported items?
Ans: You can get cash
incentives for the items and at the rate as shown in Annexure-4. You just follow
the procedure as stated and claim with all necessary documents in your merchant
bank.
11. What is GSP?
Ans: GSP- Generalized
System of Preference. In this system we get some preferential advantage
including duty free or concession and quota free access.
12. In which countries we are
getting GSP
Ans: We are getting GSP in
37 Countries including 27 EU countries and 10 others like USA , Canada ,
Japan , Norway , Switzerland etc .
13. How an exporter export
certain products. How can I help him?
Ans: At first and exporter
needs an ERC (Export Registration Certificate) upon submission of bank balance,
membership certificate of some association, trade license etc as explained in
answer of question no-5. Then he can search for foreign buyers. He can collect
some buyers list from Export Promotion Bureau (EPB) and Bangladesh Mission’s of
the export destination country.
14. What is FTA and PTA and
explain Bangladesh
Ans:
- FTA stands for Free Trade Agreement. E.g.
- PTA stands for Preferential Trade agreement. E.g.
15. What is RTA and BTA and
explain Bangladesh
Ans:
- RTA stands for Regional Trade Agreement E.g.
- BTA Stands for Bilateral Trade Agreement. No
bilateral agreement has been finalized but Preliminary Bilateral Trade
Talks with
16. What are comparative
advantage, Competitive Advantage and Absolute advantage?
Ans:
Comparative Advantage:
Identifying which activities a country/firm/individual is most efficient at
doing (e.g. naturally available-cheap labour, cheap resource, better climate
etc). Another example that Canada
has the right climate/ skilled labour, resources etc. to produce wood-pulp
efficiently. CA theory states that grow and sell the product which you have
comparative advantage (CA) and buy the product in which you have less CA.
Competitive Advantage:
Competitive advantage is at the heart of a form’s performance in
competitive markets. Competition between firms or products. e.g. Lower cost,
differentiated products .
Absolute Advantage:
If a firms or products is superior at producing both the products, it holds
absolute advantage.
17. What is NT, MFN, TBT, NTB ?
Ans:
NT: National
Treatment(Treat domestic and imported product equally)
MFN: Most-Favored Nation
Treatment (To treat all WTO countries equally)
TBT: Technical Barriers to
Trade: Ensure regulations, standards, testing and certification (WTO
regulation)
SPS: Sanitary and
Phytosanitary Standards. Complement to TBT
NTB: Non Tariff Barrier
18. What are Dumping,
Antidumping and Countervailing?
Ans:
Dumping: Occurs when a
company when a company exports a product at a price lower than that normally
charged in home market
Antidumping: Put an export
tax on dumped product.
Countervailing: Meaning
Anti-subsidies- Countervailing duties may be used to offset (remedy) unfairly
subsidized trade.
RoO-Rules of Origin- used
to determine where a product comes from
TRIPS-Trade Related
Intellectual Property Rights-Copy Right Law, Patent Law, Trade Mark law
19. What are Primary goods,
Manufactured goods, Traditional and Non -traditional goods?
Ans:
Primary goods: Almost
Obtained naturally: Frozen food, Dry fish
Manufactured Goods:
Manufactured in Industries: Chemicals, Medicine
Traditional Goods: Jute,
Tea, Jute goods
Non-Traditional Goods:
Others except Traditional Goods.
20. How can you separate the
LDC’s from Developing countries?
Ans: The Criteria for the
identification of the LDCs are as follows:
In its latest triennial review of
the list of Least Developed Countries in 2003, the Economic and Social Council
of the United Nations used the following three criteria for the identification
of the LDCs, as proposed by the Committee for Development Policy (CDP):
• a low-income criterion, based
on a three-year average estimate of the gross domestic product per capita
(under $750 for inclusion, above $900 for graduation);
• a human resource weakness
criterion, involving a composite Augmented Physical Quality of Life Index
(APQLI) based on indicators of: (a) nutrition; (b) health; (c) education; and
(d) adult literacy; and
• an economic vulnerability
criterion, involving a composite Economic Vulnerability Index (EVI) based on
indicators of: (a) the instability of agricultural production; (b) the instability of exports of goods and services;
(c) the economic importance of nontraditional activities (share of
manufacturing and modern services in GDP); (d) merchandise export
concentration; and (e) the handicap of economic smallness (as measured through
the population in logarithm); and the percentage of population displaced by
natural disasters. (E/2004/33)
To be added to the list, a
country must satisfy all three criteria. To qualify for graduation, a country
must meet the thresholds for two of the three criteria in two consecutive
triennial reviews by the CDP. In addition, since the fundamental meaning of the
LDC category, i.e. the recognition of structural handicaps, excludes large
economies, the population must not exceed 75 million. In the 2000 review, Senegal was included in the list of LDCs. Timor -Leste was added to the list in 2003, bringing the
total number of LDCs to 50. With regard to the 2003 triennial review of the
list, the CDP concluded that Cape Verde
and Maldives
qualified for graduation and recommended that they be graduated from the LDC
category. The CDP also concluded that Samoa
was eligible for graduation in 2006. Based on the CDP report, the ECOSOC will
make a recommendation to the General Assembly, which is responsible for the
final decision on the list of LDCs.
21. What is MFA?
Ans: The Multi-fiber
Arrangement (MFA), sometimes referred to as the Multi-fiber Agreement, is a
trade agreement adopted in 1973 by the United States, Canada, and Europe that
set quotas for the amount of textiles and apparel that other countries could
export to these countries. The MFA, which came into force in 1974, was seen as
a protectionist measure intended to prevent the loss of textile and garment
industry jobs in the US , Canada , and the
EU to countries, mainly developing countries, where such goods could be more
cheaply produced. It was first seen as a temporary measure, but was extended
five times (Hyvärinen, 2000). However, by the end of this year, following a
10-year phase-out program governed by another agreement, the Agreement on
Textile and Clothing (ATC), that came into force along with the World Trade
Organization (WTO) agreement in 1995, the MFA system will come to an end. This
means that in 2005, all WTO members will have unrestricted access to the
European, US, and Canadian markets.
22. What assistance do we
provide to our exporter?
Ans: The importance
assistances we provide to our exporters are as follows:
-project loan at lower rate of
interest
-Income tax exemption
-cash incentive
-export loans with soft terms and
lower rate of interest
-reduced air fare
-tax return/bond facilities
-assistance in production of
marketing
-help them to participate in
international fair, marketing missions abroad
-duty draw back, ECG, EPF fund
facilities
-International trade related training
and workshop
-export loan with a lower rate of
interest and under easy terms and condition etc.
23. What is the basic feature
of our export policy?
Ans:The basic features
are:
-Our Export Policy 2009-2012
provides guide lines to promote our export. Its objective is to facilitate our
exporter rather than control the export
-The policy allows freely export
of all the products except a few export prohibited products and conditional
export items.
-Only 16 categories of products
have been prohibited. Most of them are in line with international conventions.
For example arms, chemical weapons, some wild animals, archeological relics
etc. 2 are under conditional export (fertilizer-audio-video etc)
-For export diversification 8
sectors identified as Highest Priority sectors where as 12 promising sectors
have been identified as Special Development Sectors have been identified.
-Provisions of General facilities
and incentives have been described in chapter-4
-Sector based facilities have
been incorporated in chapter-5
-Chapter 6 describe about the
service export while
-Chapter seven describes some
misc export promotional issues like export trophy and and CIP for women entrepreneurs.
24. How an exporter is being
honored?
Ans: To honor the exporter
Commercially Important Person (CIP) are declared by Government related
facilities are being provided. Besides Export Trophy are also distributed to
the distinguished exporters.
25. How many kinds of CIP are
being declared and what is the criteria for CIP exporters?
Ans: There are different
types of CIP i.e. CIP-Export, CIP-Industry and CIP-NRB in Bangladesh . We deal with CIP-Export
and the criteria used to determine Commercially Important Person (CIP) for
Export are as follows:
- Minimum export earning for 9 specific product is US$0.10 million and for other sector US$ 1.00 million.
- Not a loan or Tax (all tax) defaulter.
- No trade dispute with the foreign buyer.
- Not convicted by the court.
- No false information provider.
Ministry of Commerce or Export
Promotion Bureau publishes advertisement regarding invitation of application
for CIP in August of the year. For
further information a copy of the “CIP (Export) Plicy-2006 can be seen at
Annexure-6)
26.What is WTO Mode1, Mode2,
Mode3, Mode4 ?
Ans:
Mode1- Invisible communication
with another countries e.g. Telecommunication, Rail Communication etc.
Mode11- Services taken from other
countries like healthcare, nursing, etc
Mode 111- Foreign Direct Investment(FDI)
Mode IV- Movement of
Natural Person to another countries.
27. What is TRIMs?
Ans: TRIMs: (WTO) Trade
Related Investment Measures Agreements
28. What facilities for
export-oriented industries are being offered by Board of Investment (BOI)?
Ans:
- Use of a portion of the foreign currency earned by the exporter under the retention quota of Bangladesh Bank for foreign trip, participation in international fairs and seminars, import of raw materials, spares and equipment, establishment of office abroad, etc.;
- Export development Fund(EDF) offers joint venture capital at low interest rates, assistance for obtaining foreign technical assistance, service and technology, assist in sending marketing missions abroad, assist in the establishment of sales & display centers and warehousing facilities abroad, assist in participation in product development & marketing training programs for export promotion, etc.;
- Tax holidays (5 years for Dhaka,
- Agro-processed industries, ICT, to be relieved from income tax;
- Restructure the Export Credit Guarantee Scheme;
- Up to 90% bank loan against irrevocable LC or confirmed contracts.
