Electronic LC from Jan 25

The Customs and the Bangladesh Bank (BB) have taken a joint initiative to launch electronic letter of credit (LC) system in a bid to check duty evasion and money laundering through false declaration of import-export products.
The e-LC system will be introduced from January 25 next.
This will be the first-of-its-kind initiative of establishing interconnectivity for exchanging commercial information in the country, Customs officials said.  
Currently, customs verification of the declared products and its volume is conducted manually.
With the connectivity, the system would automatically find out false declaration after the trader submits bill of entry at the customs port. The system would not accept the bill of entry if any mismatch is found in the furnished information in LC.
Customs officials said false declaration of import products is rampant in Bangladesh causing loss of significant amount of revenue every year. Also, some vested quarters launder money by opening completely fake LC without importing any product.  
"False declaration of import and export products would be abolished with the introduction of the system," NBR Customs member Farid Uddin told the FE Monday.
The Customs wing has asked all customs houses across the country to verify the LC from January 25 next to check authentication of imported goods, Mr Farid said.
All banks and Customs houses would come under electronic LC system from that day, he added.
There are several evidences on import of high tariff products by declaring low tariff ones, he added.
It can be verified easily whether declared category of products and its volume of import quoted in the LC are  genuine, he said.
Dr Zaidi Sattar, Chairman of the Policy Research Institute, (PRI), termed the move 'a step forward towards trade facilitation.'
"The e-LC would save time of doing business in Bangladesh. Both exporters and importers would be benefitted with speeding up of clearance system," he said.
Dr Sattar said introduction of the system would help save at least five days' time of import-export clearances which requires 29 days now.  
The online system of LC will be introduced under the concept of National Single Window that the government undertook to replace the existing manual system with paperless system.
Customs offices will be able to verify the authenticity of LCs as the banks will upload those on the Bangladesh Bank's foreign exchange transaction monitoring dashboard.
The system will automatically link up with the ASYCUDA World system of the NBR.
Another customs official said currently customs houses send paper documents to the banks to cross-check authenticity of documents which is time consuming and lengthy..   
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