Date: 10th July 2024
The Chairman
Nation Board of Revenue (NBR)
Rajashwa Bhaban Plot# F 1/A Agargaon,
Sher-E-Bangla Nagar, Dhaka-1207
Subject: Requesting to review the rules for foreign-owned bonded warehouse (Deemed Exporter in EZ) in the Bonded Warehouse Licensing Rules 2024.
Dear Sir,
This is Kotaro Takeuchi, Managing Director of NICCA BANGLADESH CO., LTD. (100% foreign-owned entity). I would like to inform you that, we have taken land in the Bangladesh Special Economic Zone (BSEZ) and registered under BEZA (BEZA Investment Clearance Ref. No.: PC-20231115034229089484).
There are two business schemes of this company (Trading 95% and Manufacturing 5%). First, we will start a business by purchasing final chemical products in the middle of 2025 under a bond license from other NICCA global sites, such as Indonesia, India and Japan, and then we will sell it to our customers in Bangladesh who have the bond license (deemed exporter) and who directly export garments to other countries.
Secondly, we will start manufacturing textile chemical products in Bangladesh in 2026 at the same location in BSEZ. The manufactured chemical products will also be sold to customers in Bangladesh who have bond licenses (deemed exporters) and export garments to other countries.
It is mentionable that in the Bonded Warehouse Licensing Rules 2024, Deemed Exporters are defined as the industrial companies manufacturing and supplying ancillary products to export-oriented industrial companies as back-end industries against back-to-back L/C denominated in foreign currency.
Since we want to do trading business in the EZ area by selling our product to Deemed Exporter and Direct Exporter, we would like to request you to add “Trading business” in the definition of Bonded Warehouse.
I also request you to remove the condition of “Back-to-back L/C” from the Definition of Deemed Exporter since it is not possible to do the transaction by back-to-back L/C most of the time, besides our customers are also not interested to do business through back-to-back L/C.
On the other hand, we came to know from Custom Bond Commissionerate that, Deemed Exporter needs Utilization Permission (UP) for doing business, but most of our customers do not want to do business by taking Utilization and Declaration (UD) since the product quantity is very small. Hence, it is requested to remove the UP and UD issue for the Deemed Exporters.
It is also mentionable that, there are no definitions of “Manufacturer” in the Bonded Warehouse Licensing Rules 2024. It is requested that add the definitions of “Manufacture” in the Rules. In this case, we propose you to add “re-packaging” in the definition of “Manufacturer” since we want to import chemicals in the big containers and re-pack the chemicals in the small containers.
It is very significant to mention that, there is a huge customer base who are operating Bonded Warehouses (deemed exporters) in Bangladesh and those customers are interested to buy products from our Bonded warehouse. If we can sell products to these deemed exporter the time and cost will be minimized.
With the passage of time, the business and economic environment has changed a lot. Besides Bangladesh govt. is encouraging FDI by providing several kinds of facilities and incentives.
Hence it is our proposal to review the rules and regulations and make it more business-friendly for the bonded warehouse which helps to attract more FDI, increase employment, minimize time, cost, and import dependency as well as help to industrialization across the country.
Overall, the establishment of a bonded warehousing facility by NICCA BANGLADESH CO., LTD. can have a positive impact on the export sector in Bangladesh. By providing direct and deemed exporters access to bonded warehousing, NICCA BANGLADESH CO., LTD. can help reduce import time and enhance export competitiveness.
So, we would like to emphasize that, as a deemed exporter of textile chemical products, if NICCA BANGLADESH CO., LTD. has the business route not only to direct exporters but also “to deemed exporters”, NICCA BANGLADESH CO., LTD. can contribute to the better supply chain by reducing lead time of textile chemicals and enhance export competitiveness for customers.
Therefore, it is humbly requested to consider the above request and update the Bonded Warehouse Licensing Rules 2024 to ease the business in Bangladesh.
Sincerely,
🗸
______________
Kotaro Takeuchi
Managing Director
NICCA BANGLADESH CO., LTD.
Email: ko-takeuchi@niccachemical.com
Mobile No.: +8801735901417