Traders now allowed to export from another country
It will allow traders to buy goods and services from another country and export those to a third country in a bid to diversify exports
The Bangladesh Bank has announced a "Merchanting Trade" policy which will allow traders to buy goods and services from another country and export those to a third country in a bid to diversify exports.
The Foreign Exchange Policy Department of Bangladesh Bank issued a circular in this regard on Wednesday, stating, "In accordance with the export policy in force, a trade for which goods or services procured from a country, are shipped or delivered directly to a third country is defined as 'merchanting trade'. To facilitate transactional services by ADs [authorised dealers] to their 'merchanting, trade' customers, it has been decided to formulate a set of operational guidelines."
Business insiders appreciated the initiative saying it would promote service income.
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This type of business has been gaining popularity worldwide, but specific policies were necessary for it in Bangladesh. The new policy will allow export trade to expand and earn a lot of foreign currency.
According to the policy, "merchanting trade" is defined as "procurement of goods and services from another country and shipment of goods and services from that country directly to buyers in a third country".
The circular says an EXP form - which needs to be furnished by exporters before shipment of goods - will not be required for export activities under the merchanting trade. Similarly, the IMP forms applicable for imports will not be required in the case of procurement of goods from different countries.
Bank payments for import-leg are to be met out of payments received from export-leg, the circular said.
It also allowed for payment at the import-leg under short term buyers' credit from external sources for which merchanters can assign the receivables from the export-leg.
Banks are restricted to issue any forms of payment undertaking, commitments or acceptance for the credits.
The difference between inward receipts and outward payments, including charges, shall be reasonably satisfactory for meeting local expenses and profits, the circular noted.
