Bangladesh Bank recently launched a comprehensive framework for import trade in free trade zones to facilitate business operations and ensure cautious risk management by banks.
Industrial enterprises engaged in manufacturing or export-oriented production, authorised importers on record and licensed logistics service providers operating within FTZs will now be eligible to import goods into the zones.
Industrial enterprises engaged in manufacturing or export-oriented production, authorised importers on record and licensed logistics service providers operating within FTZs will now be eligible to import goods into the zones.
Imports meant for storage, warehousing or distribution may be undertaken on a consignment basis, under which ownership of goods will remain with foreign suppliers until the goods are either used in production or sold to ultimate buyers, the circular stated.
Such goods will not be treated as inventory owned by FTZ enterprises for financing and exposure purposes until ownership is transferred.
Purchases of goods from FTZs by domestic buyers, including those located in specialised zones or through intra- and inter-FTZ transactions, will be treated as import transactions and will require compliance with standard import procedures.
For industrial raw materials, banks may allow usance import facilities of up to 270 days.
Sales of finished or semi-finished goods by FTZ enterprises to buyers in Bangladesh will be regarded as export transactions for sellers and import transactions for buyers.
Payments for all such transactions must be settled in freely convertible foreign currency, while FTZ enterprises will be allowed to retain export proceeds in designated foreign currency margin accounts to meet their import obligations abroad.
Under the framework, goods imported into FTZs on a consignment basis may remain in the zones for 48 to 60 months, subject to applicable regulations. Meanwhile, usance import transactions, including those financed through buyer’s credit or supplier’s credit, will have a maximum tenor of 270 days.
The Bangladesh Bank also allowed ADs to extend financing to FTZ entities in line with financing facilities available to enterprises operating in specialized zones.
However, banks and OBUs have been instructed not to recognise exposure against consignment-based imports while ownership remains with foreign suppliers.
Financing may be extended only after ownership is transferred through production use or sale to ultimate buyers and supported by the required documentation.
Fibre2Fashion News Desk (DS)
