Policy underway to streamline operations of buying houses

EPB to act as regulator

Monira Munni | Published: January 27, 2018 22:39:05

The government may make it mandatory for garment-buying houses to get registered with their association and the Export Promotion Bureau for doing business.
Officials said the government has drafted the policy with this provision, meant for bringing the intermediaries in apparel trade under regulation and thus ensuring accountability of the buying houses in trade-dispute resolution.
The Ministry of Commerce (MoC) on January 14 sent the draft to relevant stakeholders like Bangladesh Garment Buying Houses Association (BGBA), Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the state-run Export Promotion Bureau (EPB), eliciting their opinions.
Presently, a buying house can operate its business only by obtaining a trade licence from the authority concerned and there is no obligation to register with a supervising body or an association, industry people said.
"Buying houses registered with BGBA have to re-register with EPB and EPB will annually renew the registration after scrutinizing all requisite documents," the draft policy reads.
"No buying house can transfer foreign buyers' L/C (letter of credit) for garment exports without having registration with EPB," it said, adding that Bangladesh Bank will issue notification to all commercial banks in this regard.
The policy in the making also proposes Tk 50,000 as registration fee and Tk 5000 as annual fee.
The buying house concerned would be responsible from LC handover to garment factories until they (the factories) get their payments, the draft says.
And a transparent system has to be followed in fixing the price of products between buying houses and export-oriented garment factories.
The draft also proposes an 11-member monitoring committee headed by the EPB vice chairman to monitor the activities of buying houses.
Officials said the move came following some recent incidents of buying houses allegedly getting involved in fraudulence and trade disputes.
The EPB in a letter to commerce ministry had recommended framing a policy, saying that in the recent days buying houses have been involved in trade-dispute resolutions on behalf of foreign buyers while role of some of them found improper.
"We have demanded for a long time that all the buying houses be brought under regulation as the wrongdoers go unpunished, or they can't be traced if any incident or fraudulence happens," K I Hossain, president of BGBA, told the FE.
A total of 450 garment-buying houses including 10 foreign ones are registered with the BGBA while an additional 400 to 500 run across the country sans any affiliation with the trade body, he added.
Buying houses play a very important role in garment-export earning as majority of the apparel factories are dependent on them," he said, adding that about 50,000 graduates are employed in buying houses.
"It is a positive move to bring both local and foreign buying houses under regulation," said Fazlee Shamim Ehsan, vice president of BKMEA.
He, however, opined that there should be a "win-win situation" so that there be no bureaucracy that hampers the trade while none can play foul as garment business is interrelated with buying houses.
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