Unified import licence recommended

The Bangladesh Trade and Tariff Commission has recommended that the commerce ministry unify the two separate licences now required for industrial and commercial imports.

The commission says the unification will vitalise the ongoing efforts to simplify business in Bangladesh.

Currently, businesses are required to have two separate import registration certificates (IRC) – commercial and industrial – to bring in products under industrial and commercial categories.

An industry that has an industrial IRC does not qualify for commercial certification at the same time, and vice versa.

Shakil Ahmed, manager (Commercial), ACI Limited, told The Business Standard, "We had both industrial and commercial IRC certificates. We always need industrial raw materials and also import some finished products such as toothpaste. That is why we need the two certificates."

"The tariff structures of goods imported under industrial and commercial IRCs are completely different. So, there is no chance of those being misused."

Biswajit Saha, director of one of the country's largest conglomerates, the City Group, explained how the separate IRCs for import turn out to be problematic for businessmen.

"We import our raw material under the industrial IRC as City Group usually does not require a commercial IRC. But if we now want to import onions on an emergency basis to help ease the soaring market of the cooking essential, we will require the commercial IRC," he said.

Until unification, the tariff commission recommended relaxing import conditions for industries that already have industrial IRCs.

According to sources, some business entities had both industrial and commercial IRCs. When they went to the Office of Chief Controller of Imports and Exports to renew their certificates, they were told that an industry would qualify for only one type of IRC. It would require a recommendation from the commerce ministry to avail the two at the same time.

Later, over 30 organisations applied to the Tariff Commission to remove this complexity. Then, the commerce ministry asked the commission to provide it with a report, outlining the overall picture. Accordingly, the commission made these recommendations.

The commission in its report said separate IRCs for imports contradict the liberal import policy, though the policy has been gaining support from businessmen for the last three decades.

In neighbouring India, Sri Lanka and Nepal, a business entity can complete both its import and export through a single certificate. In Pakistan, businessmen do not even require any registration for imports. 

Advocating for a unified import registration, the commission cited the examples in its report sent to the commerce ministry.

When contacted, tariff commission Member Shah Md Abu Raihan Alberuni said industries often require commercial imports.

"They then rely on those who have commercial IRCs. Therefore, we have recommended that industrial IRC holders be provided with commercial import certification," he said.

Assoc membership for IRC hinders competitiveness

According to the current import policy, an importer must have a trade organisation membership to obtain the IRC. Tariff commission says the membership obligation is an obstacle to creating new entrepreneurs, and it goes against the competitive business environment in Bangladesh.

The membership stipulation needs to be abolished, the commission said in its observation.

Apart from this, the Bangladesh Investment Development Authority (Bida) in a recent meeting at the tariff commission, said current business-related laws do not have any issue over running industrial and commercial activities at the same time. Therefore, separate IRCs for imports are against the existing rules and regulations.

According to the tariff commission, Bangladesh has been pursuing a policy of import liberalisation since 1985. The country since then has gradually lifted various import restrictions to facilitate international trade. As a result, the country's involvement in international business has been gaining momentum riding on increasing import and export volumes.

Although the country adopted a liberal import policy after 1985, no change was made in the regulatory import policy order issued earlier in 1981. Therefore, a conflicting situation between liberal import policy and prior import order emerged.

Even in 2017, a commerce ministry meeting said that it would not be appropriate to provide the same organisation with industrial and commercial certificates considering the interest of local businesses.