Import Policy: General Provision for Import

 General Provision for Industrial, Commercial & Public

Sector Import.
 Restricted Item, Banned Item
 Guideline for Import as per GFFET of Bangladesh Bank.
 Foreign Exchange Transaction Reporting. (GFFET)Vol-2
Compiled by –
Md. Aminul Islam
Senior Principal Officer
TBL, PB
'Import'
A good or service brought into one country from another. Imports are the
goods and services that are bought by residents of a country, but made
outside of the country. The higher the value of imports entering a country,
compared to the value of exports, the more negative that country's balance
of trade becomes.

Significance of Import: There are five main reasons for which a country may decide
to import a certain good or service:

1. It simply does not exist in the country:

2. It does not exist at a specific level of quality
3. It represents a product variety that is appreciated domestically but not produced
exactly in this horizontal or mixed differentiation;
4. It is cheaper abroad, since producers there are more efficient, are faced by
lower costs, better exploit economies of scale and/or accept lower profits;
5. At the current domestic price, producers do not supply enough, that is
insufficient domestic production.
Imports are key components of the process of globalization and homogenization of
consumption and production.

Import Policy 2012-2015

 This Order may be called the Import Policy Order, 2012-2015

 Unless otherwise specified this order shall apply to all imports into Bangladesh.
 It shall remain in force up to 30th June 2015.
 The order will remain in force after the expiry of the validity mentioned above
until the new import policy order is issued.
 Whatever be there in the proposed Import Policy’ if any decision is announced in
the government budget or in any government order regarding import which is
contradictory to this import policy, the budget/government order will get
priority.

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Definitions -

‘Entre-port Trade' means such trade in case of which imported goods could be
exported to a third country after minimum value addition at 5% without changing
quality, quantity or shape and without allowing the said goods to be brought
outside the port area but can be carried, with the permission of the Ministry of
Commerce, from one port to another port for the purpose of exports.

“Importer” means the ‘Importer' as defined in article 2(f) of Importers, Exporters

and Indentors (Registration) Order,1981;

Applicant means the party on whose request the credit is issued.

Beneficiary means the party in whose favour a credit is issued.
Issuing bank means the bank that issues a credit at the request of an applicant or
on its own behalf.
Credit means any arrangement, however named or described, that is irrevocable
and thereby constitutes a definite undertaking of the issuing bank to honour a
complying presentation.

“Import Control Authority” means the Chief Controller of Imports and Exports
and includes any other authorized officer to issue licenses, permits or registration
certificates.

“Import value” means C&F or CFR value of imported goods for entre-port trade
or re-export;

“Indentor” means a person or group of persons, institution, body or organization

registered as an indentor according to article 2(g) of the Importers, Exporters and
Indentors (Registration) Order,1981;

H.S. Code Number, means the H.S. Code comprising eight or more digits as
mentioned in the First Schedule of the Customs Act pertaining to classification of
commodities;

“L/C” means letter of credit opened for the purpose of import under this Order;

“Registered Importer” means an importer registered under the Importers,

Exporters and Indentors (Registration) Order, 1981;

‘Re-export' means export of any imported item within specific period with at least
10% value addition to the import value after reprocessing the said imported item
locally by changing either its quality or shape or both;

“Expatriate Bangladeshi” means foreign exchange earning Bangladeshi citizens

working/living abroad;

“Commercial importer” means an importer registered under the Importers,

Exporters and Indentors (Registration) Order,1981 who imports goods for sale
without further processing ;

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 “Public sector importer” means importers being government organizations or institutes,
statutory bodies, corporations and public universities.

Abreviation used in the Import Policy Order 2012-2015

C& F Clearing and Forwarding.
CAD Cash Against Document.
CFR Cost And Freight.
CIF Cost Insurence And Freight.
CIP Carraige And Insurence Paid To.
CPT Carraige Paid To.
FOB Free On Board.
ITC Import Trade Control.
LCA Letter of Credit Authorisation.
ROR Right of Refusal.
TCB Trading Corporation of Bangladesh.

General Provisions for Import

1. Regulation of Import- Import of goods under this Order shall be

regulated as follows:

(a) Unless otherwise specified in this order, the items banned for import
in the list (annexure-1) shall not be importable:

(b) Except the items specified in the sub-para (a) all other
items are importable freely;

(c) While determining the import status of an item mentioned in the

‘Control List’(annexure-1), if any discrepancy arises between the H.S.
Code and the description of goods, the description of goods shall
prevail.

2. Conditions for regulating import. ---- If the import of an item was

restricted before coming into effect of this Order or if such restriction has
been made effective due to the inclusion of the item in the Control List or for
imposition of any other provision such restriction shall be subject to the
following conditions:--

(a) In case any restriction is imposed on import of a particular

commodity with a view to protecting the interest of a local industry the
concerned sponsoring authority/ Bangladesh Tariff Commission shall
strictly monitor production of that industrial unit regularly;

(b) The industrial units (Protected Industry) which are

specially engaged in “assembling type” activities shall have to actively
and expeditiously move towards progressive manufacturing ;

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 (c) Goods from Israel or goods produced in that country and
also goods carried in the flag vessels of that country shall not be
importable.

3. General Conditions of Import of goods- ---

H.S. Code Number for import purpose, use of H.S. Code with at least eight digits
corresponding to the classification of goods as given in the First Schedule of the
Customs Act,1969 (Act No. IV of 1969) based on the Harmonized Commodity
Description and Coding System, shall be mandatory:

Provided that, Bank shall not issue L.C. Authorization form or open L/C without
correctly mentioning H.S. Code number for the item(s).

 In all cases of import, “country of origin” shall be mentioned clearly on the

package and container of goods

 Import shall be made at the most competitive rate

 A certificate regarding “country of origin” issued by the concerned Government

agency, approved authority or organization of the exporting country must be
submitted, along with import documents to the Customs Authority at the time of
release of goods

 In case of import of milk, milk food, milk products, edible oil and other food
items produced in any country, test of radioactivity levels present in those items
is mandatory.

 For import of all kinds of food and beverages, the date of manufacture and the
date of expiry shall clearly be embossed on each tin , container or package

NOC on the basis of ROR (Right of Refusal)---

No Objection Certificate on the basis of Right of Refusal (ROR) from any authority
shall not be required for import of any freely importable item by any Public Sector
agency.

(1) Pre-shipment inspection---

(a)In this order where there is condition for pre-shipment inspection of

imported goods the said condition has to be complied with; and

(b)Unless otherwise specified, in case of export and import, shipment of goods can
be made under The Bangladesh Flag Vessels (Protection) Ordinance, 1982 (Ord.
No.XIV of 1982).

Import on CFR, CPT, FOB, CIF, CIP, DAT, and DAP basis-

Goods can be imported on CFR, CPT, FOB, CIF, CIP, DAT, and DAP basis
defined in the incoterms by water, land and airways;

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Before opening L/C, necessary insurance cover note shall be purchased from the
Sadharan Bima Corporation in case of import by the Government and from
Sadharan Bima Corporation or any non-life insurance company approved by the
Government in case import by the private sector. The insurance policy has to be
submitted to the Customs Authority during release of imported goods from the
customs Authority;

FEES REGARDING IMPORTS

Registration Certificate:---- (1) Registered commercial and industrial importers

have been classified into following six categories on the basis of ceiling- value of
overall annual import for the financial year 2012-13 to 2014-15. And their
Registration (IRC) and renewal fees will be as follows:

Category Ceiling Value of annual Initial Registration Annual renewal

import fees fees

First
Tk. 5, 00,000 Tk. 5,000 Tk. 3,000
Second Tk. 25,00,000 Tk. 10,000 Tk. 6,000
Third Tk. 50,00,000 Tk. 18,000 Tk. 10,000
Fourth Tk. 1,00,00,000 Tk. 30,000 Tk. 15,000
Fifth Tk. 5,00,00,000 Tk. 45,000 Tk. 22,000
Sixth Above Tk.5,00,00,000 Tk. 60,000 Tk. 30,000

Renewal Fees for the concerned financial year shall be paid by the importer within
30th September of that year without any surcharge.

General Provisions for Industrial Import

General rules for Import in the Industrial sector- Unless otherwise specified in this
order------

1. Industrial units approved on regular basis will be allowed to import up to three

times (300% )of their regular import entitlement of the items, import of which is
banned for commercial purpose and which are importable by industrial consumers
only;

2. Raw materials & packing materials for pharmaceutical industry------

Government approved and recognized pharmaceutical industries shall get the Block
List duly approved by the Director, Drug Administration specifying the description
of raw and packing materials, value, quantity, according to their annual production
programme;

3. Import by Export-Oriented Industries-

Recognised readymade garment industries operating under the bonded warehouse
system shall be permitted to import raw and packing materials (including banned &
restricted items), the approved quantity as per Utilization Declaration (U.D) issued by
the Bangladesh Garments Manufacturers and Exporters Association (BGMEA).

THE RULES OF IMPORT BY COMMERCIAL IMPORTERS

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Commercial Import – Commercial import will normally be made under cash foreign
exchange but subject to availability of fund import of commercial items may be
allowed under Government allocation. In such cases the name of items, source of
finance and other terms and conditions for commercial import will be notified by
the Chief Controller from time to time.

Import of industrial raw materials, packing materials and spares parts by

commercial importers--- Industrial raw materials, packing materials and spares parts
which are not included in the banned and restricted lists shall be freely importable
under cash foreign exchange by commercial importers.
Import of capital machinery for commercial purpose- Commercial importers may
import permissible new and second hand or reconditioned items of industrial capital
machinery & generator or generating set under cash foreign exchange without any value
limit for commercial purpose by complying the rules & regulations of this order.

IMPORT BY PUBLIC SECTOR IMPORTERS

Public Sector Import: ---

(1) All Ministries and Government Departments may import goods against
specific allocation given to them by the Government.

(2) All Ministries and Government Departments except the Ministry of

Defence shall first duly submit L/C Authorization Form to their
nominated Banks before opening L/C for the purpose of import.
(3)Import Registration Certificate (IRC) required by the public sector- Import
Registration Certificate (IRC) shall not be required for importers by the public sector.

Restricted List as the goods shall not be importable:

(1) Maps, charts and geographical globes which do not indicate the territory of
Bangladesh in accordance with the maps published by the Department of
Survey, Government of the People’s Republic of Bangladesh;
(2) Horror comics, obscene and subversive literature including such pamphlets,
posters, newspapers, periodicals, photographs, films, gramophone records
and audio and video cassette tapes etc;
(3) Books, newspapers, periodicals, documents and other papers, posters
photographs, films, gramophone records, audio and video cassettes, tapes
etc. containing matters likely to outrange the religious feelings and beliefs of
any class of the citizens of Bangladesh;
(4) Reconditioned office equipment, photocopier, type-writer machine, telex,
phone, and fax, old computer, old computer accessories, old electronic items

(5) Goods (including their containers) bearing any words or inscriptions of a

religious connotation the use or disposal of which may injure the religious
feelings and beliefs of any class of the citizens of Bangladesh;

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(6) Import of live Swine and any item prepared from swine;

(7) All kinds of industrial sludge and fertilizer & any other products produced from

sludge; and

(8) Unless or otherwise specified in this order, all kinds of waste;

GUIDELINES FOR FOREIGN EXCHANGE TRANSACTIONS (GFET)

These guidelines come in two volumes.

The first volume includes- the instructions and the prescribed forms/declarations
relating to individual transactions.
The second volume delineates- the procedure of reporting of foreign exchange
transactions by Authorised Dealers to Bangladesh Bank.

Import trade control & Registration of importers

Import of goods into Bangladesh is regulated by the Ministry of Commerce in
terms of the Import and Export (Control) Act, 1950, through Import Policy
Order (IPO) in force and Public Notices issued from time to time by the Office
of the Chief Controller of
Imports and Exports (CCI&E).

No person can import goods into Bangladesh unless he is registered with the
CCI&E or exempted from the provisions of the said Order.

Dealing with known customer

 The ADs must ensure that they deal only with known customers having a
place of business in Bangladesh and can be traced easily should any
occasion arise for this purpose.
 In case the importer is a new customer, the AD should obtain certificate
from the AD through which the applicant imported earlier to the effect
that no bill of entry is due/overdue for submission by the importer.

LC Authorisation Form

 The ADs are authorised to issue 'Letter of Credit Authorisation Forms'

(LCAFs). Import permits or clearance permits are not required for imports
by the Ministries and Government Departments against specific allocation
given to them by the government. But all Ministries and Government
Departments except the Ministry of Defense shall duly submit LCAF to
their nominated banks before opening LC for the purpose of import.

 The importer should himself/herself sign the LCAF in the presence of an

officer of the AD.
 LCAFs remain valid for remittances for one year subsequent to the month
of issuance
 LCAFs issued for import of capital machineries and spares will remain
valid for remittances for 18 months subsequent to the month of issuance.

Terms of Imports

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Appropriate Incoterms should be incorporated in the letter of credit/purchase
contract in compliance with the IPO in force. Import shall usually be made on
CFR / CPT basis.

RULES FOR ANY MODE OF TRANSPORT

EXW – Ex Works (named place of delivery)
The seller makes the goods available at its premises. This term places the
maximum obligation on the buyer and minimum obligations on the seller.
FCA – Free Carrier (named place of delivery)
The seller delivers the goods export cleared to the carrier stipulated by the
buyer or another party authorized to pick up goods at the seller’s premises
or another named place, and risk passes when the goods are handed over to
the first carrier.
CPT - Carriage Paid To (named place of destination)
Seller clears the goods for export and delivers them to the carrier at a amed
place of shipment. The seller pays for carriage. Risk transfers to buyer upon
handing goods over to the first carrier.
CIP – Carriage and Insurance Paid to (named place of destination)
The containerized transport/multimodal equivalent of CIF. Seller pays for
carriage and insurance to the named destination point, but risk passes when
the goods are handed over to the first carrier.
DAT – Delivered at Terminal (named terminal at port or place of destination)
Seller pays for carriage to the terminal, except for costs related to import
clearance, and assumes all risks up to the point that the goods are unloaded
at the terminal.
DAP – Delivered at Place (named place of destination)
Seller pays for carriage to the named place, except for costs related to
import clearance, and assumes all risks prior to the point that the goods are
ready for unloading by the buyer.
DDP – Delivered Duty Paid (named place of destination)
Seller is responsible for delivering the goods to the named place in the
country of the buyer, and pays all costs in bringing the goods to the
destination including import duties and taxes. This term places the maximum
obligations on the seller and minimum obligations on the buyer.

Rules for Sea and Inland Waterway Transport

The four rules defined by Incoterms 2010 for international trade where
transportation is entirely conducted by water are:

FAS – Free Alongside Ship (named port of shipment)

The seller must place the goods alongside the ship at the named port. The
seller must clear the goods for export. Suitable only for maritime transport
but NOT for multimodal sea transport in containers (see Incoterms 2010,
ICC publication 715). This term is typically used for heavy-lift or bulk cargo.
FOB – Free on Board (named port of shipment)
The seller must load themselves the goods on board the vessel nominated by
the buyer. Cost and risk are divided when the goods are actually on board of
the vessel (this rule is new!). The seller must clear the goods for export. The
term is applicable for maritime and inland waterway transport only but NOT
for multimodal sea transport in containers (see Incoterms 2010, ICC
publication 715). The buyer must instruct the seller the details of the vessel
and the port where the goods are to be loaded, and there is no reference to,
or provision for, the use of a carrier or forwarder. This term has been greatly
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 misused over the last three decades ever since Incoterms 1980 explained
that FCA should be used for container shipments.
CFR – Cost and Freight (named port of destination)
Seller must pay the costs and freight to bring the goods to the port of
destination. However, risk is transferred to the buyer once the goods are
loaded on the vessel (this rule is new!). Maritime transport only and
Insurance for the goods is NOT included. This term is formerly known as CNF
(C&F).
CIF – Cost, Insurance and Freight (named port of destination)
Exactly the same as CFR except that the seller must in addition procure and
pay for the insurance. Maritime transport only.
Use of correct HS Code
It is mandatory to use correct HS Code to indicate the classification of goods to be
imported as per First Schedule of the Customs Act, 1969. No bank shall issue LCAF
or open LC without quoting correct HS Code in the LCAF.

Pre-shipment Inspection
Unless otherwise exempted by the Pre-shipment Inspection Act, 1999, all goods to
be imported shall be inspected by an NBR designated Pre-shipment Inspection
(PSI) company for quantity, quality, description, classification and price.

Cancellation of LCAF
On expiry of an LC unutilised partly or wholly, or on cancellation or reversal of sale
of foreign exchange, the endorsements made on the back of the LCAF may be
cancelled with appropriate remarks, under the seal and signature of the AD.

Remittance in excess of the value of the LCAF

Remittance in excess of the value of the LCAF is not permissible without prior
approval of the Bangladesh Bank except for payment of normal bank charges of the
foreign correspondents. Remittances of bank charges should be reported to the
Bangladesh Bank as usual with TM forms and necessary supporting documents.

Imports on FOB basis

In case of import on FOB basis, full LCAF value is not remittable. In other words,
freight charges payable on imports on FOB basis are to be adjusted against the
relative LCAF value. In case of FOB imports the AD should endorse, beside FOB
value, the freight payable in Taka as indicated in the bill of lading etc.

LCAF issued in the name of a person/firm other than applicant

An AD may not open LC or make remittances of foreign exchange covering imports
into Bangladesh in cases where the exchange monitoring copy of the relevant LCAF
has been issued in the name of a person or firm other than that of the applicant.
Such requests received by an AD should be referred to the area office of the
CCI&E.

Import against LCAF without opening LC

Selected items as mentioned in the IPO in force may be imported against
registered LCAFs withour opening LC.

LC covering imports
The AD should establish LCs against specific authorisation only on behalf of their
own customers who maintain accounts with them and are known to be participating
in the trade.

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Terms on which LCs may be opened

All LCs and similar undertakings covering imports into Bangladesh must be
documentary LCs and should provide for payment to be made against full sets of
onboard (shipped) bills of lading, air way bill, railway receipts, truck receipts,
post/courier parcel receipts showing despatch of goods covered by the credit to a
destination in Bangladesh. All LCs must specify submission of signed invoices and
certificates of origin.

Instructions are to be followed by ADs while importing through land ports:

(a) only one port of entry ( land port) is to be mentioned specifically in the letter of
credit/purchase contract;

(b) ADs shall have to send copies of letter of credit and subsequent amendment(s)
if any, including other relevant information to the land port authority;
(c) specimen signatures of the officials working in the import-export desks of the
concerned Authorised Dealer bank, contact phone and fax nos. of the ADs are to be
sent to all the land ports.
(d) NOC(if any) shall contain name of the officials along with P.A. nos. and official
seal.

LCs to be opened only against firm contracts

The AD should, before opening an LC, see documentary evidence that a firm order
for the goods to be imported has been placed and accepted. The AD should ensure
while opening an LC that full description of the goods to be imported are given in
each
Credit along with the unit price of the merchandise.

Credit report of the foreign suppliers

The ADs should also obtain confidential report on the exporters from their branches
or correspondents abroad or in their discretion, satisfy themselves as to the
standing of the exporter by consulting standard books of reference issued by
international credit agencies of international standing such as Seyds, Dunn and
Bradstreet in all cases where the amount of the LC/Contract exceeds BDT 5 lac
against proforma invoices issued direct by foreign suppliers and BDT 10 lac against
indents issued by local agents of the suppliers.

Such reports should be obtained by the Ads themselves and the reports if
submitted by the importers should not be accepted.

Remittance against Discrepant documents/Documents received directly by

the importers
ADs may allow remittance against discrepant documents /documents received
directly by the importers after the goods have been cleared from the customs, on
the basis of the relative LCAF, the authenticated copy of the customs bill of entry
for consumption or customs certified invoice in the case of import by post/courier
and the relative invoices.

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Advance remittance against imports
Advance remittance for permissible imports of goods and services into Bangladesh
may be effected by the Authorised Dealers without prior approval of the
Bangladesh Bank, against applications from the importers submitted with signed
undertaking in the prescribed format.
a) the purchase contract with supplier specifically requires advance payment;
b) the supplier furnishes repayment guarantee acceptable to the Authorised Dealer
from a bank abroad, to be invoked for refund of the amount paid in advance in the
event of the supplier's default in delivering the goods or services as per contract.
Such guarantee need not however be insisted upon in cases of advance payments
up to USD2500 for import of books, journals or life savings medicines.

(c) Requests for advance remittance where the suppliers are unwilling or unable to
furnish the repayment bank guarantee referred may be forwarded by the
Authorised Dealers, along with their recommendations, for specific decision of
Foreign Exchange Policy Department, Bangladesh Bank on merit of each case.

Forms on which applications for Remittances should be made

All applications for payments against imports into Bangladesh (including imports
from EPZs) should be made on IMP forms. The IMP forms must be submitted in
duplicate by the importer.

Indication on IMP form for Government Imports

The AD should mark with a bold letter "G" the IMP form for remittance against an
import in the name of a government department or office for which LCs are opened
by the AD.

Submission of the authenticated copies of 'Bill of Entry' and 'Certified

Invoices'

In all cases of remittances for imports into Bangladesh, the importer must submit
within 4 months from the dates of remittances the relevant authenticated copy of
the customs bill of entry. In case of import by post/courier, the importer must
submit the invoice certified by the customs authorities in lieu of the authenticated
copy of the bill of entry. Where the value of an import by post/courier is less than £
5 or its equivalent in other foreign currency, the customs authorities will issue a
certificate instead of certifying the invoices. In such cases, the certificate may be
submitted in place of the certified invoices.

The Bangladesh Bank is prepared to consider applications for extension of the time
limit beyond 4 months in cases of genuine difficulties, such as delay in the arrival
of the ship or difficulties in clearing the goods already landed at a port in
Bangladesh etc.

Loss of goods
In the event goods are completely lost, duplicate copy of the IMP form should be
forwarded to the Bangladesh Bank giving full particulars of the loss and the manner
in which the insurance claim has been collected. In the event of partial loss, the
authenticated copy of the customs bill of entry for the goods actually cleared
should be submitted giving full particulars of the loss and the manner in which the
insurance claim has been collected.

LCs on deferred Payment basis

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import LCs may be opened on deferred payment/usance basis in the following
cases:
i) Import of capital machinery on up to 360 days usance basis;
ii) Industrial raw material imports for own use of industrial importers (including
back to back imports discussed in detail in the next section) on upto 180 days
usance basis;
iii) Import of coastal vessels including oil tankers and ocean going vessels including
those procured for scrapping on upto 360 days usance basis;

iv) Import of agricultural implements and chemical fertilizers on up to 180 days

basis;
v) Import of life saving drugs (certified/declared as such by Drugs Administration
Authority) on upto 90 days usance basis.

Payment of import liability

ADs shall make payment of import liabilities as per LC/contracts (both local and
foreign) on maturity. Failure in settlement of import liability as per credit/contract
terms may result in punitive actions including revocation of AD licence by
Bangladesh Bank.

Documents against LC received on collection basis/negotiated under

reserve due to discrepancy

In cases where due to discrepancy, the negotiating bank abroad sends the
documents on collection basis or under reserve or otherwise the bank should
forthwith arrange acceptance of the documents by the importers and deposit
counterpart funds within 5
days from the date of receipt of the documents. In case of non-acceptance, the
bank should return the documents to the negotiating bank or dispose of the
documents in accordance with the instructions of the negotiating bank abroad.

Foreign Exchange Transaction Reporting. (GFFET)Vol-2

Submission of Returns of Foreign Exchange Transactions.

--The End--

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