Import by Letter of Credit Authorisation Form-LCAF
Authentication/Registration Of LCAF:
When the importer submits LCAF (Letter of Credit Authorisation Form) with other papers to the bank to open L/C, Bank will Authenticate the LCAF, confirming the following:
- IRC is valid, renewal fee paid (if required)
- Item to be imported is eligible as per import policy/Pass Book.
- LCAF is duly filled in & signed by the importer.
- H.S. Code to be inserted into LCAF
Procedure for LCAF Registration:
i) (a) The LCAF set of 6 copies duly filled in and signed by the importer is to be submitted to the Bank with a forwarding letter. The branch, on receipt, will carefully scrutinize the same in details, verify the signature of the importer, and furnish the required particulars and information certifying the entitlement as per current Import policy under their seal and dated signature. The LCAF is entered into the relevant register and submitted to the Area Registration Unit of Bangladesh Bank directly under cover of a forwarding schedule in duplicate for registration.
i) (b) The LCAFs are registered by the Bangladesh Bank Registration Unit subject to observance of usual bill. The officer-in-charge of the Bangladesh Bank Registration unit will give the Registration number on all the copies of LCAFs under his signature. Therefore, the same will be embossed with the security seal of the registration unit. No letter of credit will be opened unless an LCAF, which has been registered with the Bangladesh Bank, bears the impression of the security seal.
i) (c) After registration the original and duplicate copies of the LCAFs will be delivered to the authorized representatives of the banks from whom the same were received by the Registration Unit. Triplicate and quadruplicate copies of the form will be passed on to the concerned licensing office. Quintuplicate copy of the form will be retained in the record of the Registration Unit of the Bangladesh Bank.
i) (d) The customs copy is to be handed over by the branch to the importer, but Exchange Control copy is retained by the branch for further action at the time of opening L/C etc. the Exchange control copy of LCA form acts as the basis on which imports into Bangladesh is permitted, while the customs copy is required at the time of clearance of the goods from the customs on importation.
ii) (a) In case of imports against barter/loan/aid etc. where registration of L.C. Authorisation forms will not be needed, the nominated bank of the importer will submit the form directly to the designated bank. The designated bank will countersign the form under their seal with date. The designated bank will retain the original and duplicate copies of the form and send triplicate and quadruplicate copies to the concerned licensing office and quintuplicate copy to the importer’s bank.
ii) (b) The authorized Dealer branches will not issue blank L.C. Authorisation Forms to their clients.
The LCA forms are required to be properly filled in and duly signed by the importer in presence of a concerned official of the branch. The branch is required to keep proper records of the stocks and issuance of each set of LCA form. For this purpose the following registers are to be properly maintained:
- LCA form Stock Register
- LCA form Issuing Register
- LCA form Forwarding Register
Procedure to be followed by banks for acceptance/issuance of LCA Forms Banks will follow the following procedures in the case of accepting or issuing of LCA Form:
(a)Acceptance of LCA Forms by the nominated banks-
(i) LCA Forms and other relevant papers shall be submitted by recognised industrial units in the private sector and registered commercial importers to their respective nominated bank for the
purpose of import by opening L/C.
(ii) While accepting LCA Forms from a private sector importer the nominated banks shall ensure that the concerned importer has a valid Import Registration Certificate (IRC), the requisite renewal
fees for IRC for the relevant financial year has been paid and particulars of the treasury challan showing payment of renewal fees have been duly recorded in the IRC of the said importer. Unless a
private sector importer is specifically exempted from IRC, LCA Forms shall not be accepted from him/her, or L/C shall not be opened in his/her favor without valid and legally renewed IRC.
(iii) In case of import through land route, name of the land port of destination in Bangladesh will be clearly stated in concerned L/C; (iv) L/C for import of capital machinery and initial spares for setting up of a new industrial unit may, however, be opened without any Import Registration Certificate (IRC) and without obtaining exemption certificate from the Chief Controller. No formal the sanction shall be necessary from the sponsoring authority for such import against cash foreign exchange in respect of industrial units in the free sector;
(v) In case of import of capital machinery and spares by the foreign investor, a certificate to the effect that import cost will be paid in cash foreign exchange from the equity of foreign investor, issued by the concerned bank is required;
Cases where LCA Form against Government allocation are not
required to be registered- In case of import under Loan, Grant, Barter or special trade agreement, nominated bank after recording the particulars mentioned in the LCA Form shall forward the LCA Form or LC Application Form along with other necessary documents to the designated bank with the request to open LC. And then the designated bank, after opening L/C, must forward the third and fourth copies of LCA Form to the Import Control Authority within 15(fifteen) days.
Endorsement on LCA forms:
i) At the time of opening of L/C against a LCA form, full particulars should be endorsed on the back of the Exchange Control copy of the relative LCA form under stamp and signature of the authorized official of the branch. The amount of Taka equivalent of the L/C amount should be shown after converting the F.C amount into taka( or local currency of the importing country) at the ruling rate of exchange for ready delivery.
ii) Details of remittances made whether under L/C or otherwise should also be endorsed on the Exchange Control copy of LCA forms together with the number of relative IMP form.
Restriction of Using the Exchange Control copy of LCA form:
i) The AD branch should in no case hand over the Exchange Control copy of LCA form to the Importer or their authorized agent. If such LCA is required by any other bank in connection with the opening of L/C or making remittances against imports or by the CCI & E for the extension, revalidation etc. the same should be forwarded to the Bank concerned or to the CCI & E directly by the branch.
ii) Before forwarding the LCA forms to other Authorised Dealers of Licensing Authorities, Authorised Dealer branches should ensure that full particulars of all letters of Credit opened, and remittances made there-against are clearly endorsed on the back of the LCA forms and that the LCA forms will be resubmitted to them.
Distribution of LCAF:
Original: Exchange Control copy
Duplicate: Custom purpose copy
Triplicate: CCI & E’s office
Quadruplicate: Statistical copy
Quintuplicate: Registration Unit of Bangladesh Bank
Last copy: Office copy of the Bank
On obtaining full set of LCAF from issuing Bank, Bangladesh Bank will
a) Insert Registration Number
b) Emboss with Security seal &
c) Put authorized signature on the LCAF
LCAFs remain valid for remittance for 09 (Nine) months in case of commercial items and 17 (Seventeen) months in case of capital machineries & spares.
Cancellation/Transfer of Endorsement on LCAF:
i) Where a Letter of Credit opened against a valid LCA form is cancelled or expires partly or wholly unutilized or if the sale of foreign exchange against a valid LCA form is subsequently cancelled, the relative endorsement mode on the back of the Exchange control copy of the LCA form may be cancelled provided, appropriate remarks to that effect are made on the back of the LCA form under the stamp and signature of the Authorised officer.
ii) In case where an endorsement has been made on a wrong LCA form by mistake, the Authorised Dealer may cancel the endorsement provided the endorsement is transferred simultaneously to the appropriate valid LCA form. It is not permissible, however, to transfer endorsements from valid LCA form to LCA forms, which have expired, although, such LCA form may show an unutilized balance sufficient to cover the endorsement. It is also not permissible to transfer endorsements from one valid LCA form to another valid LCA form unless both are identical in all respects.
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