The goods and services sold by Bangladesh to foreign households, businessman and Government are called export. The export trade of the country is regulated by the Imports and Export (control) Act, 1950. There are a number of formalities, which an exporter has to fulfill before and after shipment of goods. The exports from Bangladesh are subject to export trade control exercised by the Ministry Of Commerce through Chief Controller of Imports and Exports (CC & E). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CCI&E and holds valid Export Registration Certificate (ERC). The ERC is required to be renewed every year. The ERC number is to be incorporated on EXP forms and other documents connected with export.
Step 1- Registration of Exporters:
For obtaining ERC, intending Bangladeshi exporters are required to apply to the controller/ Joint Controller/ Deputy Controller/ Assistant Controller of Imports and Exports, Dhaka/ Chittagong/ Rajshahi/ Mymensingh/ Sylhet/ Comilla/ Barishal/ Bogra/ Rangpur/ Dinajpur in the prescribe form along with the following documents:
- Nationality and assets certificate,
- Memorandum and Article of association and “ Certificate of Incorporation” in case of “ Limited Company”,
- Bank Certificate,
- Income Tax Certificate,
- Trade License etc.
Step 2- Securing the Order:
After getting ERC Certificate the exporter may proceed to secure the export order. He can do this by contacting the buyers directly or through agent.
In this purpose the exporter may get help from:
- Liaison Office
- Buyer’s local agent
- Export Promotion Organization
- Bangladesh mission abroad
- Chamber of Commerce (Local & Foreign)
- Trade fair etc.
Step 3- Signing the Contract:
After communicating buyer, exporter has to get contracted (writing or oral) for exporting exportable items from Bangladesh detailing commodity, quantity, price, shipment, insurance and marks, inspection and arbitration etc.
Step 4- Receiving letter of credit:
After getting contract for sale, exporter should ask the buyer for Letter of Credit (L/C) clearly stating terms and condition of export and payment. The following are the main points to be looked into for receiving/ collecting export proceeds by means of Documentary Credit:
- The terms of the L/C are in conformity with those of the contract;
- The L/C is an irrevocable one, preferably confirmed by the advising bank;
- The L/C allows sufficient time for shipment and negotiation.
* Terms and conditions should be stated in the contract clearly in case of other mode of payment:
- Cash in advance ,
- Open account,
- Collection basis (Documentary/ Clean)
Step 5- Procuring the materials:
Then the exporter should take the preparation for export arrangement for delivery of goods as per L/C and prepare and submit shipping documents for payment/ acceptance/ negotiation in due time.
* Document for shipment:
- EXP form,
- ERC (valid)
- L/C copy,
- Customer Duty Certificate,
- Shipping Instruction,
- Transport Documents,
- Insurance Documents,
- Other Documents,
- Bills of Exchange (if required)
- Certificate of Origin
- Inspection Certificate,
- Quality Control Certificate,
- G.S.P Certificate,
- Photo-sanitary Certificate
Step 7- Final Step:
Submission of the documents to the Bank for negotiation
- Checking of export documents: After getting the documents banker used to check the documents as per LC terms.
- Negotiation of export documents: If the bank accepts the documents and pays the value draft to the exporter and forward the document to issuing bank that is called a negotiating bank. If the bank does buy the LC then the bank normally acts as collecting bank.
- Realization of proceeds: This is the period when the issuing bank has realized the payment.
- Reporting to the Bangladesh bank: As per instruction by Bangladesh bank the bank has to report to respective department of Bangladesh bank by mentioning latest payment.
- Issue to proceeds realization certificate (PRC): Bank has to issue proceed realization certificate of export LC to the supplier/ exporter for getting cash assistance
After scrutinizes all the documents, if the documents are clean, EXIM Bank purchase the documents on the banker- customer relationship. This is known as Foreign Documentary Bill Purchases (FDBP).