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Evaluation of Import Policy Order 2021-2024
Evaluation of Import Policy Order 2021-2024
https://www.observerbd.com/news.php?id=366429
Published : Thursday, 19 May, 2022 at 12:00 AM
Count : 7
M S Siddiqui
Under this Section 4 of the IPO 2022-2024 duly recognized the limitation of the
order in relation to the Finance Act and other laws. This an appropriate
clarification about the status of IPO. But the supremacy of law has a condition
that those laws will prevail over this rule provided that the relevant departments
of the government will get the Ministry of Commerce issue notification or rule
in this regard beforehand. The condition seems confusing for the common
people the author of the article.
Upon analyzing some of the clauses are found very much similar to old IPO and
need due attention of the policy makers. The world economies are focusing re-
export trade to gain advantage of global and particularly regional trades. One of
the most restricted countries like India has started re-export trade and gradually
taking over regional market through import and re-export of different products
from other part of the world. They are replacing Singapore, Hongkong and
Dubai as regional hub and taking over Bangladesh market.
The present IPO 2021-2024 has many regressive conditions for Entre-port and
re-export. A definition of Entre-port in section 2 (1) imposed condition of value
addition of minimum 5%. There are many reasons of change of price and
sometime even it is better to export with less profit and even at loss to avoid
further loss of global price. It is better not to keep a value addition of minimum
5%.
Section 13- 8 make rule for exportable goods marked as 'Made in Bangladesh'
although no country in the world such condition of change the country of origin
for re-export. Similarly, the re-export has been defined that any goods shall be
modified and change and after the value addition of 10% will treated as re-
export. Moreover. Under Section 13-14, the replacement of products under
warrantee required prior permission from CCI&E. Section 13 has another
condition for re-export through temporary import should conclude within one
year and also subject to Bank guarantees or 'other documents'.
Further in the Section 13-4 for Entre-port a prior permission as import permit on
returnable basis from Chief Comptroller of Import and Export required against
back-to-back L/c. Section 13- 7- under bond license again an import permit on
returnable basis permission needed for Entre-port import and re-export trade.
The IPO could facilitate-export through Free Economic Zones focusing to the
lucrative market of China and India. Following the policy of India, Singapore,
Dubai and Hongkong, the policy should be totally modified for entry-port and
re-export policies and let the market decide the value addition and the trade
should be free from permission and approval from any authority.
Another provision of import with competitive price under section no 5-4 with a
condition of obtaining of price from three sources from at least two countries for
competitiveness of price and importers are bound to submit the documents to
Import control office. The same rule was also in previous IPOs and could not
followed both by importers and the regulating authority. Interestingly, it is not
practical to submit quotation to the authority for approval before import.
Under Section 7 a rule is to mark the 2% of the packing with name, address and
TIN number of the importer. It is not serving the purpose intended and only
adding some cost for the import into Bangladesh. It may be deleted to make
imported products competitive.
As per section 8-3 (Kha) of IPO permitting annual Import against telegraphic
transfer (TT) for amount of US$5 lac. It is also subject to rule of Central Bank
TT. Again, in the clause no 10 -1, the unregistered importer may import up to
US$10,000 without permission from Chief Comptroller of Import and Export
(CCI&E). Considering the global trade procedure, Bangladesh should gradually
allow import against TT for all products. Interestingly, Bangladesh allow import
on credit through import against L/c authorization and payment against
documents but restricted the advance payments This means we ask the world to
trust Bangladesh but we do not trust the partner countries.
There is good news for the members of different clubs that under section 21-2
Ka, Hotel, restaurant, resort and club etc may be allowed to import licker under
H S Code 22.03 to 22.06subject to permission from Ministry of Commerce,
CCI&E and directorate of Narcotics.
Another change to use the term Free Carrier (FCA) instead of Free on Board
(FOB) to avoid some avoid responsibility of uncertain cost beyond control. The
Incoterm 2020 has given emphasis to Carriage Paid To (CPT) instead of Cost
and Freight (C&F) for ensuring a specific requirement that the seller must
comply with any security-related requirements for transport to the destination.
These security requirements bring cost and risk delay if not fulfilled by the
parties. The new policy may promote INCOTERM 2020 to remain at per with
the global trading system.
Bangladesh has revised the law and passed new Plant Quarantine law in 2011
and issued rule Plant quarantine Rules in 2018 but same rule for US origin
cotton remained unchanged. This is considered as non-tariff barrier. The new
Import Policy order also has the same restriction causing a barrier to trade
negotiation with USA and obtaining some benefit like GSP facilities. The
condition may be withdrawn in the grater interest of our trade.
There is a major dispute arises between Bank and importer and again importer
and Customs department over the HS Code of the importable goods. The IPO
could refer to the HS Code of WCO not the HS Code declared by NBR in
Bangladesh. The HS Code is administrated by the World Customs Organization
(WCO) and is updated every five years. It serves as the foundation for the
import and export classification systems used by many trading partner countries.
There were some burning issue could be addressed to make the policy dynamic
and suitable to integrate to the present international trade system. Bangladesh is
going to graduate from its current LDCs status. Trade facilitation is a major
issue to address as a developing country. This will necessitate a new shift in
trade policy regime for enhancing productive capacity and competitiveness.
The IPO 2021-24 could have addressed the issue of the creation of Free Trade
Agreement (FTAs) and Preferential Trade Agreement (PTAs). It could address
the issue of standard of product, mutual recognition of the standard of different
countries, issue related to intellectual property rights and others. The IPO could
address these issues as we are already late to initiate these reforms to prepared
ourselves for FTA and to face global competition after graduating from LDC.