BB frames import rules for free trade zones

The Bangladesh Bank (BB) has introduced rules for banks to facilitate import into free trade zones (FTZs), aiming to support trade flows by allowing manufacturers to import raw materials and other items and store them for up to 60 months.

Under the framework, authorised dealers (ADs) and offshore banking units (OBUs) of banks will handle FTZ-related transactions in line with foreign exchange regulations, according to a BB circular issued yesterday.

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Only three types of entities -- manufacturing factories, authorised traders, and logistics companies -- will be allowed to import into FTZs.

The development comes roughly a month after the Cabinet Committee on Economic Affairs approved the establishment of FTZs near the Matarbari deep-sea port in Cox’s Bazar and in Anwara, near Chattogram port, as part of a transformative trade strategy aimed at slashing export lead times, attracting foreign suppliers, and turning the country into a regional logistics hub.

Development of the Anwara zone is expected to begin this year. The Matarbari FTZ is slated for development during 2030-2033, alongside the expansion of the deep-sea port, officials said earlier.

A senior BB official said the central bank had prepared the framework in line with the recommendation of a committee formed by the Bangladesh Investment Development Authority and headed by its Executive Chairman, Ashik Chowdhury.

“We have issued the framework so that transactions can take place after the FTZs become operational,” he said. “The FTZ framework is expected to facilitate trade flows.”

In its circular, the BB specified that imports for storage, warehousing, or distribution may be conducted on a consignment basis.

In such cases, the title to the goods remains with the foreign supplier until the items are either used in production or sold to end buyers. Banks will not treat such goods as inventory or assume exposure until ownership is transferred.

The BB said purchases by domestic buyers will be treated as imports, while sales by FTZ enterprises will be treated as exports for sellers and imports for buyers, requiring compliance with export and import procedures.

“All payments shall be settled in freely convertible foreign currencies,” the BB said.

According to the BB, goods under consignment may remain in FTZs for 48 to 60 months, while usance imports, including buyer’s and supplier’s credit, are capped at 270 days, meaning importers must complete payment within that period.

To ensure financial stability, the BB directed banks to undertake rigorous due diligence on FTZ clients. This includes verifying ownership structures, assessing contractual arrangements with foreign suppliers, and evaluating production and sales cycles.

Admissible financing must be supported by appropriate documentation and be strictly aligned with the underlying transactions, according to the BB.