$7.6m RMG export proceeds stuck in Russia due to transaction snags

Due to transaction complications, Bangladesh's ready-made garment (RMG) exporters are unable to repatriate $7.6 million from Russia, said Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

"After exporting garments to Russia, 14 Bangladeshi exporters have been unable to recover $7.6 million for more than a year. Primarily due to transaction complications, buyers in Russia are unable to pay the amount," he said at a press conference today (7 May).

To resolve the issue, he proposed that the stuck amount be adjusted against Bangladesh's payable dues for the Rooppur Nuclear Power Plant or that a barter system be introduced.

Bangladesh has been unable to make payments to Russia for the Rooppur plant due to transaction complications following US sanctions imposed in the wake of the Russia-Ukraine war.

The barter system is a method of trade where goods and services are exchanged directly for other goods and services without using money.

The press conference was organised to present the position of Mohammed Hatem-led Progressive Knit Alliance panel ahead of the BKMEA elections scheduled for 10 May.

In response to a question, Hatem said, "Due to the India-Pakistan conflict, Bangladeshi garment exporters will not face significant losses in sourcing raw materials. However, border trade will be disrupted."

He added that border trade may be affected not only with Bangladesh but also with Nepal, Bhutan, and Sri Lanka.

Hatem also highlighted that exporters are struggling with various complications related to taxes, customs, and value-added tax (VAT).

Criticising Bangladesh's tax system as hostile to investment and business, he said, "Money is being forcibly taken in the name of taxes."

The press conference was attended by senior leaders, including Executive President Fazlee Shamim Ehsan.