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CHT Bangladesh PVT Ltd. is a 100% deemed export-oriented company under Bangladesh Economic Zone Authority. The company has already obtained the bond license from the Customs Bond Commissioner.
Generally, any deemed exporter outside the Economic Zone (EZ) and Export Processing Zone (EPZ) has to complete the export process by following the specified procedure of Back to Back LC and Utilization permission (UP)/ Utilization declaration (UD).
But Back to Back LC and UP/ UD are not required in case of export of goods by textile auxiliary chemical manufacturing and deemed exporters located in EPZ, where they export through cash LC, Ex Permission (EP) and EXP (Export Permission).
CHT Bangladesh PVT Ltd. has set up their industry in the Export Processing Area of Meghna Industrial Economic Zone, the company is supposed to carry out the export process through direct LC without Back to Back LC and UP/ UD in the same manner as the deemed exporter in EPZ.
It is to be mentioned that, as per Section 11 of BEZA Act 2010, since the BEZA Act, 1980 (Act. No. XXXVI of 1980) and the Bangladesh Private Export Processing Zones Act, 1996 (Act No. 20 of 1996) are of the same type, special financial incentives and facilities are supposed to be provided by the government to the industrial units of the economic zone. So, the company also has to carry out export activities in the same way as in EPZ without Back to Back LC and UP/ UD.
But in the case of the company, it has been mentioned on their Bond License to complete the export process as deemed exporter through Back to Back LC and UP/ UD. Due to this, the company is not able to export products through direct LC from their customers, and the respective customers are not agreeing to purchase products through Back to Back LC and UP/UD. As a result, the activities of the company are about to stop, and 100% Foreign Direct Investment (FDI) has almost closed.