Export Procedure

Export Procedure

Exporter obtain Export Registration Certificate from Chief Controller of Import & Export >>

Agreement for Export >> Obtain Export LC, Standby L/C or Contract >> 

Export LC issued by issuing bank at the request of importer/buyer >> 

The bank through which the L/C is send to the exporter is treated as advising bank >> 

Advising bank verify the authenticity of the export L/C before advising the same to the beneficiary with a forwarding letter (Article-9, UCP-600) >> 

Transfer of L/C: If the first beneficiary transfers the L/C to the 2nd beneficiary/ies (Article-38, UCP-600), therefore transferring bank is determined as per Article-38, UCP-600

Confirmation of L/C: L/C confirmed by a third bank known as the confirming bank (Article-8, UCP-600). >>

Beneficiary comes to his bank for export financing >>

  • Export credit is determined on the basis of the FOB value (Goods Value) of the L/C (As per latest instruction of BB, the pro-forma invoice must contain breakdown of the total cost as FOB value, freight charge, insurance and other charges)

FOB Value = CFR Value-Freight Charge; or,

FOB Value= CIF Value-Freight Charge-Insurance

  • Before allowing any export financing Bank should carefully examine the following:
  1. Authenticity of the Advising /transfer of the LC
  2. If needed buyer’s credit report can be asked from the issuing bank
  3. Items to be examined:

Name of the beneficiary, shipment date, expiry date of the credit, amount of the credit, trade terms, port/place of loading, port/place of destination, payment terms, B/L clause, fee/charge to be paid to foreign agent or bank, nomination of vessel, whether negotiation is free or restricted, whether partial shipment allowed or not, any other clause which is not possible to comply with for the exporter etc. >>

Exporter procures the raw materials and manufactures the ordered goods as per description in the LC  >>

Bank keeps close touch with the exporter and frequently visits the factory premises to monitor the production status, so that goods can be shipped at schedule time >>

Before shipment of goods exporter collect EXP from the AD branch >>

  • AD issues the EXP form dully filled in by the exporter by verifying the signature of the exporter, put serial number as per EXP register and signs as prescribed on the form.
  • EXPs are issued in two copies first original and second original.
  • Respective AD report the EXP on Bangladesh Bank Online Export Monitoring System integrated with ASYCUDA World systems of NBR for taxation of the export   >>

Exporter handovers the goods to carrier and complete the customs procedure through C&F agent >>

Customs check whether the EXP is available on ASYCUDA through Bangladesh Bank Online Export Monitoring System. Any wrong reporting of the EXP on online may be refused by the customs >>

Customs issues the shipping bill/bill of export giving full details of exportable items and signs the EXP form. The first copy of the EXP is sent directly by customs to Bangladesh Bank. The second original is handed to the exporter/C&F agent along with the bill of export for submitting at the AD. >>

AD receives the second original copy of the EXP with the bill of export and report the duplicate EXP online. Meantime also report the triplicate/repatriated EXP in case the proceed is received in advance and reported online earlier through ARV (Advance Receipt Voucher). The second original copy of the EXP along with other documents must be kept at the custody of the AD for record of at least five years. >>

Exporter submit the documents with second original copy of the EXP form dully signed by customs to AD for negotiation or sending to for collection >>

  • By negotiation of documents Bank again allow post shipment credit to the exporter.
  • Bank examine the documents as per credit terms and if decides to negotiate they give an entry in the FBP register and pass the following vouchers/entries on CBS after taking necessary approval from the concern authority:

 

Dr.          Foreign Bill Purchased

Cr.          FC Held A/C (customer)

Cr.          Investment A/C (packing credit/cash credit hypo, if any)

Cr.          Exporters Retention Quota A/C (if any)

Cr.          Income A/C for commission on Export Bill

Cr.          Sundry Deposit (for local agent commission)

Cr.          Income A/C for EXP issue

Cr.          Sundry Deposit (for Source Tax)

Cr.          CD A/C (for remaining after all deduction)

  • Branch also has to pass the following contingent liability entries on CBS:

Dr.          Outward Foreign Bill Lodged

Cr.          Outward Foreign Bill Collection

 

  • If any discrepancy is detected, the bank insists for sending the documents on collection basis. But in some cases, exporter do not agree for sending the documents on collection basis, rather they ask the bank to negotiate despite discrepancies. In that case bank may seek authority from L/C issuing bank whether the discrepancies are acceptable to issuing bank.

 

  • If the bank decides to send the documents on collection basis, it should be done upon consent of the exporter. Before sending the documents on collection basis, a serial number and other particulars must be written in the FBC register and the following voucher/entries on CBS to be passed:

 

Dr.          Outward Foreign Bill Lodged

Cr.          Outward Foreign Bill Collection

  • Both in case of negotiation or collection of documents, if any notice of discrepancy is received from the issuing bank it should be informed to the exporter with forwarding letter asking them to arrange to repatriate the export proceeds immediately.
  • AD bank can’t allow any discount of more than 5% of the FOB value of the goods without permission of Bangladesh Bank.
  • If there is any delay in repatriation of export bill and the issuing bank return the documents without payment , the matter should be immediately taken up with the shipping company for necessary protection of the exported goods and also to be asked the exporter to take necessary steps to bring back the goods to Bangladesh of there is no alternative buyer of the same.
  • At the time of realization the following vouchers/entries on CBS to be passed:

 

For FBP:

Dr.           HO ID at OD sight export rate for issuing IBDA(SIBG)

Cr.          Branch

Dr.         Outward Foreign Bill Collection

Cr.          Outward Foreign Bill Lodged

For FBC:

Dr. HO ID at OD sight export rate

Cr.          FC Held A/C (customer)

Cr.          Investment A/C (packing credit/cash credit hypo, if any)

Cr.          Exporters Retention Quota A/C (if any)

Cr.          Income A/C for commission on Export Bill

Cr.          Sundry Deposit (for local agent commission)

Cr.          Income A/C for EXP issue

Cr.          Sundry Deposit (for Source Tax)

Cr.          CD A/C (for remaining after all deduction

 >>

Export Procedure

Export Procedure

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