What is Import?
The purchase of goods and services from foreign sources is referred to as “import.” These imports may be used for consumption. Whatever term we use, imports represent the purchase of goods and services that are not even produced but are insufficient in a country.
Please find below the best practices for goods Import procedure In Bangladesh.
Import procedure in Bangladesh:
After obtaining the IRC (Import Registration Certificate) from CCIE, the importer can import the permissible items as per the policy of the government by opening a Letter of Credit.
A letter of credit is a written undertaking by a bank (the issuing bank) given to the seller (beneficiary) at the request and on the instructions of the buyer (applicant/importer) to pay at sight or at a determinable future date a stated sum of money within the prescribed time against the stipulated document.
To open a Letter of Credit, there are some formalities to be observed by the importer. A part of these formalities is that the authorization form must be registered where necessary. After registration of the LCA form, the importer has to submit the following documents with his application for opening L/C to his Bank.
- Prescribed L/C opening application & agreement,
- Minimum 3 copies of indent for goods issued by an indentor having valid indenting registration
- Certificate or ‘Proforma invoice’ issued by the supplier,
- Insurance cover note with a premium paid receipt
- One set IMP form
- Other documents as per stipulated in the L/C application & agreement.
Who can Import?
A person or organization that has import registration certificates can import or be an importer. The Chief Controller of Import and Export issues this certificate, As per import policy, there are five categories of importers in our country. They are
- Commercial Importer
- Industrial importer
- Lease financing importer
- Government sector
- Consumers for their own consumption
What goods & services can Import?
The goods and services that are allowed in the import policy can be imported into Bangladesh.
Documents required by the bank to open L/C to follow import procedure in Bangladesh:
- The signature of the importer is genuine,
- The value & the descriptions of the items proposed to be imported are covered by LCA, also
- Permitted in Import policy& the contract with the supplier (exporter)
- None of the clauses proposed to be incorporated in the L/C contravenes the existing Exchange
- Control Regulation.
- The importer is entitled to import the items
- The Marine insurance ‘’Cover note’’ mention the items proposed to be imported, the port of
- Shipment, the port of destination & mode of shipment
- Signatures of both the importer& the foreign supplier or the latter’s local agent appear on the
- Contract
- The Indentor’s registration number has been quoted in the L/C Application form
- The last date of shipment requested to be mentioned in the L/C within the date prescribed by the licensing authority
After issuing the L/C, the first two copies of the L/C will be sent to the person advising or notifying the bank. After authentication of the L/C, the advising bank will advise the beneficiary (exporter) of any unconfirmed credit by sending the original L/C to him.
After receiving the original L/C, the exporter will ship the goods as per the terms and conditions of the L/C and receive the required transport document from the proper authority. The exporter will prepare & collect the other document as stipulated in the L/C & submits all the document in at least more than 03 sets to his bank within the specific time period mentioned on L/C
The substantive documents required need to submit by the exporter to his Bank:
- Original L/C
- Bill of Exchange,
- Transport document
- Commercial invoice
- Insurance policy
- Certificate of Origin
- Other documents (If specified in L/C)
The exporter’s bank will examine the documents with the original LC, and if it does not find any discrepancies in the documents, it will pay the exporter. Exporter banks are also known as negotiating banks. On the same day, the negotiating bank sends two sets of documents to the LC’s issuing bank and claims reimbursement from the reimbursing bank mentioned in the LC.
The negotiating bank has to perform three duties on the same day as follows:
- Make payment to the exporter
- Claim reimbursement from the Reimbursing Bank
- Sends at least two sets of documents by separate mail to the Issuing Bank.
After receiving the documents from the negotiating bank, the Issuing bank will examine the documents in terms of the L/C copy, If there are no discrepancies found the issuing bank will record all the particulars of the documents in the ‘Inward Foreign Bills register” & convert the foreign currency into Taka at B.C. rate, it is called Lodgment of import bills
Conclusion:
To follow import procedure in Bangladesh banks play a vital role. It issues an L/C and undertakes to pay the exporter under some specific terms and conditions. If the exporter exports the goods in the stipulated period and submits the required documents as per the L/C’s instructions without any discrepancies, he will get his payment. This bank plays an important role in the “import mechanism” and provides financial services to its citizens.
On the other hand, the bank deals only with documents and not with imported merchandise. If the importer or exporter is dishonest, the bank may incur a loss. So the Bank should be very careful in selecting the importer & exporter.
Hope you could find the basic steps of the Goods Import procedure In Bangladesh.
Author with two decades of expertise in Clothing merchandise & Digital marketing in the world’s most renowned Apparel companies.
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