SRO on freight forwarding licence later this month

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Jasim Uddin Haroon
A fresh statutory regulatory order (SRO) is likely to be issued relating to introduction of freight forwarding licence to bring discipline in the business.
Sources at the National Board of Revenue (NBR) said it might be issued the new SRO later this month.
The move has been taken against the backdrop of a setback in 2006 when the government SRO on the issuance of licences to the country's around 600 freight forwarders was scuttled due to filing of a number of writ petitions challenging the order.
Bangladesh Freight Forwarding Association (BAFFA) general secretary Amiya Shankar Barman told the FE that those who had filed the writs have already asked their attorneys to withdraw the cases.
He also said: "We are eagerly waiting for the new SRO as there is no licence for doing the freight forwarding business in the country."
However, the draft of the new SRO is expected to be sent to the Chittagong Customs House from the NBR today (Tuesday) for its endorsement to the fresh rules and regulation for the freight forwarders.
"An inter-ministerial meeting has approved the draft SRO and we will send it tomorrow (Tuesday) to Chittagong for a final check," said one senior NBR official Monday.
He also said: "It (issuance of the new SRO) might take hardly 10 days to issue," the official added.
Earlier, joint forces and the officials of the NBR have held series of meetings with the BAFFA to finalise the SRO.
Two previous governments have failed to bring the freight forwarding business under a regulatory framework mainly due to differences over licence fee and guarantee provision between the NBR and the freight forwarders.
According to the SRO of the 2006, a local freight forwarder will require Tk 1.6 million for registration and a bank guarantee and a solely owned or a joint venture foreign freight forwarder will need to invest US$ 1.5 million for a period of 10 years and provide bank guarantee for an amount of $2.0 million from an internationally reputed bank.
However, the draft SRO has proposed a bank guarantee of Tk 300,000 or investment of same amount in government securities for obtaining a licence by a local freight forwarder.
A 100 per cent foreign owned freight forwarding agent will have to have Tk 10 million as paid-up capital and furnish guarantee worth $0.5 million from any internationally reputed banks to obtain a freight-forwarding licence, according to the new draft SRO.
The draft also said a joint venture freight forwarding firm will require $ 100,000 as paid-up capital and $ 200,000 as bank guarantee to obtain licence.
The registration fee for all types of freight forwarders has been proposed at Tk 5,000 each.
Apart from this, the freight forwarders will require taxpayer identification number (TIN), trade licences and other formalities, for doing the business.
Sources said the NBR wants to tag insurance issues with the SRO so that the businesses can get compensation for losses.
They said the NBR also wants the BAFFA to take the responsibility in case of any loss suffered by the consignees because of mishandling of their cargoes
An arbitration body will be formed with representations from the BAFFA, Customs Authority and business community.