6/21/2012

EXPORT POLICY EXPORT PROCEDURE & FORMALITIES

PROSPECT & POSSIBILITIES TO BOOST UP EXPORT MARKET (BANGLADESH PERSPECTIVE) By
MOHAMMAD ABIDUR RAHMAN
ID# 112-043-0-52

MUHAMMAD ASHRAF-UR RAHMAN KHALED

ID# 112-056-0-52

KAZI SHARZIL-BIN-MAHBUB BONY

ID# 112-035-0-52

MD. ILIAS RAHMAN

ID# 112-036-0-52

MD. JAMAL UDDIN

ID# 112-037-0-52

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Submitted to
MD. ABU ZAFAR SHAMSUDDIN
Instructor, International Trade and Export Import

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EXPORT
Export means outflow of Goods and/or Services produced in one Country, which purchase by Government, Firms and Individuals of other Countries.

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EXPORT POLICY
OF BANGLADESH

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Export Policy: Introduction

Acceleration of production and expansion of trade result in growth of national wealth. Aim to both at product and market diversification Our export trade must keep pace with the projected GDP growth @ 7% and make due contribution through increased export earning. Aim at marketing quality products at competitive price at the correct time. To maximizing export growth and narrowing down the gap between import payment and export earning.

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Export Policy: Objectives

To achieve optimum national growth through increase of export in regional and international market; To narrow down the gap between the country's export earning and import payment through achievement of the export targets ; To undertake timely steps for production of exportable goods at a competitive price with a view to exporting and strengthening existing export markets and making dent in new markets; To take the highest advantage of entering into the post Uruguay liberalized and globalized international market; To make our exportable items more attractive to the market through product diversification and quality improvement; To establish backward linkage industries and services with a view to using more indigenous raw materials, expand the product base and identify and export higher value added products; To simplify export procedures and to rationalize and solidify export incentives; To develop and expand infrastructure; To develop trained human resources in the export sector; To raise the quality and grading of export products to internationally recognized levels.

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General Export Facilities

Use of Foreign Exchange Earned from Export: Exporters can retain a certain amount of their export earning in their foreign currency account under retention quota, the amount of the retention to be fixed by Bangladesh Bank from time to time. Exporters can use this foreign currency for real business purposes such as business-related foreign trips, participation in export fairs and seminars abroad, importing raw materials, equipment or spare parts, and setting up offices abroad. Export Promotion Fund - There shall be an Export Promotion Fund (EPF) with EPB to Provide capital at lower interest rates and with soft terms for production of goods. Other Financial Facilities: The possibility of providing tax exemption and subsidy where necessary. Funding for Export: For import of raw materials and related inputs under the Export Promotion Fund (EPF) and possibility to provide facilities for back-to-back Letter of Credit for other export items besides readymade garments. Export Credit: Commercial banks will consider, on a priority basis, providing the exporters credit of 90 percent of the amount mentioned in the irrevocable letter of credit or in the confirmed contract. Continued..

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General Export Facilities

Exemption from Insurance Premium: will be made available for fire and shipping insurance premiums at exempted rates for export-oriented industries in the non-traditional sectors. Incentives for Export of Non-traditional Industrial Products: 1 Incentives will be given to the export of non-traditional and new industrial products having at least 40% value addition during the first two years ,and at least 50% value addition after the first 2 years. Bond Facilities for Export Oriented Industries: The National Board of Revenue will consider the possibility of providing bonded warehouse facilities to importdependent export industries. Initiating brand names to fetch higher price will be encouraged. Providing alternative incentives, instead of duty bond or duty draw-back to export-oriented local textiles and readymade garment industries. Easing VAT return on Export-facilitating Services Continued..

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General Export Facilities

Reduced Air fare for the export of specially privileged products including Fruits and Vegetables: Biman Bangladesh Airlines will consider measures for reduced air fare for the export of fruits and vegetables, ornamental plants etc. Withdrawal of Royalty for the Expansion of Cargo Facilities of Foreign Airlines for Export Purposes: No royalty is applied for transporting vegetables. Research and Development Issue of Multiple Entry Visa: Investors and importers of Bangladeshi products will be issued multiple entry visas. For this purpose, Ministry of Commerce may send recommendations to the commercial officials of Bangladesh Missions abroad and to the Ministry of Foreign Affairs. Promotion: Arrangement of International Trade Fairs and Single Country Exhibitions, and Participation in other Market Promotion Activities Abroad. Training: Strengthening Export Related Training and Foreign Trade Related Training Setting up of Permanent Fair Complex and World Trade Center.
Continued..

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General Export Facilities

Both regular and product-specific trade fairs of international standard will be organized in Bangladesh in order to invite foreign buyers, familiarize export products among them and thus connect buyers and sellers. Shipment of Products: Initiatives will be taken to simplify shipment/ transportation of products. Encouragement of Increased Use of Local Raw Materials: Bonded warehouse facilities will be gradually reduced in order to encourage the increased use of local raw materials by composite knit/ hosiery textiles and clothing manufacturing units. Establishment of Management Information System (MIS): An MIS will be installed in the Ministry of Commerce. Facilities for Deemed Exports: Deemed exporters, like direct exporters, will enjoy all export facilities including duty-draw-back. Local raw materials used for producing exports and local raw materials used in industries/ projects funded by foreign investments will be considered as "deemed export; and Initiatives will be taken to consider direct sales in foreign currency without tender as deemed export, and augment their facilities. Miscellaneous matters
Continued..

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Product-Specific Export Facilities

Readymade Garments Industry:
Steps will be taken to reduce the "lead time for export of readymade garments by means of improvement of port management, simplification of procedures for releasing goods, resolving electricity problems etc. Initiatives will be taken to set up garments villages at various places. Assistance will be provided to improve the working environment in factories. Initiatives will be taken to provide trainings of different tenures to the workers and staff of the garments industries to increase their productivity. Emphasis will be given on diversification of products by improving skills. Steps will be taken to send marketing missions abroad and organize and participate in international trade fairs at home and abroad; Establishment of backward and forward linkage industries will be encouraged; Subject to the submission of bank guarantee of equivalent amount of duty for imported raw materials, the enterprises without bond license will be allowed to produce exportable hand-woven sweaters from natural and artificial wool outside the bond areas.

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Product-Specific Export Facilities

Frozen Fish Industry:
Cultivation of shrimp for increasing the production of shrimp maintaining ecological balance will be encouraged; Venture capital will be provided for producing, processing and exporting value added products in the frozen food sector; Necessary steps will be taken to establish Accredited Testing Laboratory of high quality under public and private or joint initiatives. Initiatives will be taken for research and remedial measures to improve the quality of shrimps and protect them from diseases. Import of indispensable machinery for quality control will be encouraged so as to strengthen the efforts for controlling the quality of frozen food. Steps will be taken to send marketing missions abroad, organize single country frozen food fairs, arrange and participate in international trade fairs at home and abroad; All possible steps will be taken to implement the Vision-2015 formulated by Bangladesh Frozen Food and Exporters Association (BFFEA); Etc.

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Product-Specific Export Facilities

Tea Industry:
Initiatives will be taken to bring fallow land within the tea states under cultivation; Steps will be taken to rehabilitate sick tea gardens; Measures will be taken to provide gas connection in the tea estates to bring about price competitiveness; All co-operation will be extended to exportable the completion of leasing procedures for tea estates awaiting completion of such procedures; Banks will be encouraged to provide loans with soft terms for modernization of tea factories so as to improve the quality of tea and increase its production to help its survival in the international market; For alleviating poverty, credit as well as other facilities will be provided to tea producers of small farms; Imported packaging materials will be allowed duty draw-back/bond facilities on FOB price to encourage the export of packet tea. Steps will be taken to send marketing missions abroad, and participate in international trade fairs at home and abroad. The possibility of popularizing brand name for marketing Bangladeshi tea will be reviewed.

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Product-Specific Export Facilities

Jute Industry:
An integrated plan of action will be taken for development and diversification of jute products to enhance the productivity of the jute industry by strengthening research activities and undertaking certain activities such as BMRE for some jute factories. Obstacles impeding export of jute and jute products to different countries will be identified and necessary remedial measures will be taken to address those. Initiatives will be taken to popularize, through Bangladeshi Missions abroad, the use of jute by emphasizing the environment-friendly attributes of jute; Co-operation will be extend to entrepreneurs for participation in international fairs and exhibitions to promote markets; Government support will be provided in establishing design development centers to bring about diversity to jute products.

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Product-Specific Export Facilities

Leather Industry:
Sick leather industries will be allowed credit rescheduling facilities through policy support; Initiatives will be taken to increase export through enhancing competitiveness of leather and leather products in the international market by taking measures for improving productivity and development of products.; Local production of import-substitute chemicals for leather processing, components for footwear and accessories for leather industry will be encouraged. Foreign or joint venture investment in this regard will be welcomed; To reduce losses at collection, preservation and processing levels, awareness building initiatives and publicity will be strengthened regarding skinning of animals, preservation, transportation of hides etc. In this case, arrangements for separate training courses and workshops for butchers and leather traders will continue. Initiatives will be taken through the Leather Sector Business Promotion Council involving the industrial entrepreneurs and exporters for the overall development of this sector; Foreign and joint venture investments will be encouraged in leather products and footwear industry; Existing bond facilities will be further simplified and updated for 100% export oriented leather industries; Existing duty and tax draw-back procedures will be simplified; Assistance will be provided to the entrepreneurs for participation in international fairs and exhibitions to promote markets; Initiatives will be taken to establish slaughter houses in the major cities of the country with the help of municipalities;

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EXPORT Procedures and formalities

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Export Procedure & Formalities

Registration of Exporter: The intending Exporter has to Register with CCI&E and obtain Export Registration certificate [ERC]. The ERC number is to be used in all places relating to Exports. Making contract and issuing PI: As per the contract with Buyer PI is issued with all the details of Goods/Services and the terms & conditions of the deal. Receiving Letter of Credit/Contract: After issuance of PI, the Exporters receive Letter of Credit/Contract. Procurement and Shipment of Goods: After receipt of LC/Contract the Exporter has to procure or Manufacture the contracted Goods and Ship the same. Preparation and Procurement of Export Documents: After making shipment the Exporter has to prepare Documents i.e. Bill of Exchange, Commercial Invoice, Beneficiarys Certificates and Procure some Documents i.e. Transport Documents, Certificate of Origin, Insurance Policy/Certificate, Inspection Certificate and other documents as required in the LC/Contract. Continued.

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Export Procedure & Formalities

Submission of Documents to the Bank for Negotiation: After preparation and collection of all documents as per LC/Contract terms the Exporter has to submit the Documents to the Bank for Negotiation/Payment. Negotiation of Export Documents: As per UCP 600, Negotiation means the purchase by the Nominated Bank of drafts and/or documents under a complying presentation, by advancing or agreeing to advance funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated bank.

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PROSPECT AND POSSIBILITIES TO BOOST EXPORT MARKET

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Bangladesh Exports: Commodities

Major export commodities of Bangladesh:

Garments (totaling $14.3 billion in FY11) Frozen fish and seafood Tea Jute and jute goods Leather and Leather goods

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Bangladesh Trade: Export Partners

The following were Bangladeshs export partners: United States: 24% Germany: 15.3% United Kingdom: 10% France: 7.4% The Netherlands: 5.5% Italy: 4.5% Spain: 4.2%

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Bangladesh Trade: Prospects

The government of Bangladesh undertook significant steps during the 1980s. Consequently there was a tremendous increase in the export of ready-made-garments and knitwear, which garnered maximum foreign exchange for the country. Cheap labor and low conversion costs are the major factors behind the growth of Bangladeshs garment industry. Over 3 million Bangladeshis (90% women) are employed in this industry. Bangladesh shares excellent trade relations with the US, showing noteworthy trade surplus with the latter. The country is an active partner of the Asia Pacific Trade Agreement and the World Trade Organization. A number of export processing zones have been set up by the government to enhance economic growth by attracting foreign investment.

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Bangladesh Trade: Growth

It is perhaps of some interest to note that Bangladesh's export sector has demonstrated a good recovery during the first quarter of FY2011 (July-September, 2010). In terms of growth rate, export earning performance of some of the major sectors including woven-RMG (20.5%) and knit-RMG (31.2%), frozen foods (54.6%) and leather (5.4%) was significantly better compared to the corresponding period of FY2010. The growth in export was mainly achieved, thanks to increase in volumes rather than that of price. The contribution of price index to the incremental export over the first quarter of FY2011 was 12.9%, whilst that of volume index was 87.1%.

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Strong growth led by textiles and apparel

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Engine of growth: apparel and clothing

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Market: US and EU

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Concluding Remarks
The Govt. needs to recognize the challenges under the new global order and will have to equip itself adequately to meet these challenges. The Govt. will need to design a dynamic export strategy and put in place the capacity to realize such a strategy rather than just talk about it. The Govt. will need both strong political commitment as well as good governance, and will also be required to pursue a proactive external policy underwritten by coalition-building and skillful negotiating strategies. Priority should be given to preparing a joint action agenda with other LDCs which need to be pursued in any future round of trade negotiations.

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THANK YOU

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