Re-export of three items approved

A move is underway to allow limited re-export of three products to other countries.

The government yesterday in principle agreed to allow three local companies to import wheat, mustard seed and boulder salt, and re-export them in consumer packs after processing.

A high-powered committee headed by Additional Secretary of the Ministry of Commerce Bazlur Rashid in a meeting yesterday okayed separate applications submitted by three local companies.

According to sources, Nepal and Bhutan apart, Bangladeshi traders would be able to get market in northeastern states of India when the plan is finally implemented.

"If it works smoothly, more companies might be included in the process," said a participant of the meeting. The meeting also discussed the negative aspects and ways of retaining control over the re-export system.

Three local companies, Union Trading Company Limited, Taher Imprex, and Nitan have sought permission from the commerce ministry for importing wheat, boulder salt and mustard seed declaring their quantity.

After processing and packing in the country, these products would be re-exported to other countries and the companies would be able to retain 50 per cent value addition, the meeting was told.

Value of import and export would be settled against back-to-back bank L/Cs provided by the buyers. Local importers will have to produce bank guarantees for releasing raw materials for their duties and taxes and get back the guarantee after re-exporting those goods.

If the exporter fails to re-export goods in time, the government would collect the duties and taxes from bank guarantee.

As per the existing export policy, exporters are not required to seek permission from the commerce ministry in case of re-export on case to case basis. The value addition requirement has been reduced to five per cent from 10 per cent, the meeting was told..

If these three firms succeed, the companies willing to re-export would not be required to seek permission from the ministry in future, said a source who attended the meeting.

The exporters would not be allowed to use the name of Bangladesh as the country of origin and the goods to be re-exported will have to be tagged with a statement that these items were imported temporarily.

The commerce ministry earlier in December 2001 okayed a proposal for transshipment of Indian fruits and related products through Bangladesh to the northeastern Indian states.

As per the decision, Bangladeshi traders were supposed to import Indian goods and then re-export them to the northeastern states. But the finance minister later turned down the proposal.