Digital bonded-warehouse facilities to check rampant abuse in offing

Businesses are going to get digitised bonded-warehouse facilities as the government has given the go-ahead to its automation, which is expected to check revenue leaks.
Officials said the much-awaited automation of the bonded-warehouse system will be done under a one-year project that recently got the nod.
Management of the bonded-warehouse facilities for exporters will be automated within the next one year as per the project.
The project, titled 'automation of bond management', will be implemented by the Internal Resources Division (IRD) of the Ministry of Finance with government's own funds.
The Ministry of Planning approved the Revised Development Project Proposal (DPP) of the project in June.
As per government arrangement for facilitating trade, the National Board of Revenue (NBR) under the IRD hands out duty-free facility worth Tk 300 billion annually to exporters through the bonded-warehouse facility.
The project was scheduled to start in July 2017. But, the NBR is yet to form a committee for implementing the automation project, causing unusual delays in execution of the automation project, officials said.
The NBR will have to form a project-implementing unit, headed by a project director.
Exporters enjoy duty-free facilities on import of raw materials for manufacturing finished products under the bonded-warehouse facility.
There are widespread allegations of misuse of bonded-warehouse facilities through sale of duty-free products on the local market.
Currently, monitoring mechanism of bonded warehouse is manual.
An integrated bond-management network will be established under the project. Monitoring and supervision of bond activity will be operated under electronic systems.
All bond commissionerates will be interconnected with one another along with other relevant entities and stakeholders.
Bangladesh Bank, International Veterinary Acupuncture Society (IVAS), Asycuda system, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) will be connected with the network to share and verify authenticity of data.
The government formed a separate bond commissionerate in 2000 and later divided it into two bond commissionerates in Dhaka and Chittagong in 2011.
Bond commissionerates issue licences and supervise the exporters who are availing the facility in a bid to check its abuse.
Industry-insiders said abuse of the bonded-warehouse facilities creates uneven playing field for businesses and poses a major threat to survival of local industry.
Existing manual operation of the bonded-warehouse facilities causes a large amount of loss of revenue for a lack of digitised monitoring systems.
Weak legitimate controls, excessive use of paper (daily 300kg), physical handling, many steps for licence processing, lengthy procedure of corresponding with lien bank, lax controlling of the Utilisation Declaration (UD) system, smoggy passbook-management system are the major shortcomings in the traditional manual system.
A section of businesspeople is taking unusual advantage of the manual operating systems.
Shafiul Islam Mohiuddin, President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said the automation of bonded warehouse is essential for both businesses and the Customs.
"Once the bond system automated, unholy alliance between the customs officials and businesses will not exist," he added.
Businesses will get import-and export-related services and submit Utilisation Declaration (UD) from anywhere in an automated bonded- warehouse-management system, he noted.
"Implementation of the approved project should be expedited for facilitating businesses," the chief of the apex trade body said.
Talking to the FE, VAT commissioner of the large taxpayers unit (LTU) Md Matiur Rahman, who prepared the project proposal, said the country can save Tk 100 billion in revenue through automation of bonded-warehouse system.
Digitization project on bonded warehouse is a brainchild of Mr Matiur.
The move for digitising the bonded warehouse has been under process since 2010, he added.
Relevant government entities including Bangladesh Export Processing Zones Authority (BEPZA) and the central bank have automated their part as per the automation project while customs are lagging behind with bond- automation project, he added.
"A vested quarter is playing dirty game to stop execution of the automation project of bond for their personal interest," he said.
The automated bond network will enable the authorities to supervise and oversee all bond-related activities electronically. It will save time and ensure accountability.
Under the project, licence-information-management system will be automated. Currently, bond-licence-issuance process needs to go through 15 steps. After automation, it would be reduced to four steps to expedite process.
Issuance of electronic passbook and bond-register process would also be reduced to six steps each from the current cumbersome 16 steps.
Customs bond commissionerates can verify documents with lien bank, and audit and risk management process would be automated under the project.
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