RMG sector suffering huge losses due to non-repatriation of export proceeds

Pankaj Dastider CHITTAGONG, Oct 21: Country's readymade garment (RMG) sector suffers huge financial loss due to non-repatriation of the export proceeds by a section of dishonest importers abroad. The accumulated amount stands around US$ 1.0 billion in the last 10 years, payable to Bangladeshi exporters numbering over 300, who have been deprived of their dues mainly because of complications during air delivery of consignments to the buyers, according to complaints received by Mahbub Chowdhury, Advisor (Port and Shipping) of BGMEA. Complaints regarding non-receipt of export proceeds from buyers abroad have been lodged with the BGMEA arbitration cell. But the arbitration cells in Dhaka or Chittagong cannot take any step without interception by Bangladesh Bank and embassy of concerned importer country in Bangladesh, exporters said. Local exporters of readymade garment blame the freight forwarders and shipping agents for non-repatriation of their export proceeds while freight forwarders say they being forwarders are not involved in the process but such things happen due to breach of verbal agreements between the buyers and exporters. Design Makers Ltd, an RMG manufacturer in Fouzderhat industrial area in Chittagong lodged a complaint recently with the arbitration cell of BGMEA stating that Classic Logistic Inc at Jamaica in New York, as its consignee's agent, took delivery of garments worth $ 67,089.60 in May 2011 but yet to receive payment of the same. The Managing Director (MD) of the company alleged that the freight forwarder and shipping agent in connivance with the US buyer made the bill of lading (BL) in the name of consignee's agent violating section 8(1) chapter 16 of Exchange Control Regulation of Bangladesh Bank and thus they delivered the goods of HBL no. CGSJ-04602 dated May 6, 2011 without bank endorsement. In this regard he alleged that Aryan Freight Liners Ltd of Sector-1, Uttara, Dhaka, freight forwarder of the consignment, in a telex release on May 28, authorised the shipper MH-Global Logistics at Banani, Dhaka to deliver the container to the consignee's agent. When contacted, MD of Aryan Freight Liners Ahktar Hossain told this correspondent this afternoon that the buyer did not receive the cargo and he has informed the concerned exporter and BGMEA leaders to take back the cargo stored in their agent's warehouse in New York for the last six months but received no reply from concerned quarters. "We are simply forwarders and don't know how the deal was made between the exporter and the buyer," he said concluding that the exporters can arrange re-sale of their cargoes to other interested parties there. Outfit Apparels at Baizid area in the city also said they made an air delivery of RMG worth $ 0.12 million to its buyer at Busan in Korea through Sky Sea Logistics of Dhaka but are yet to receive the proceeds. Another exporter favouring anonymity told the FE that the exporters often deliver goods to the buyers on credit through an understanding that the payment would be made after two weeks or so. But after receiving the cargo through the agent the buyer hesitates to pay by taking advantage of the delivery without bank endorsement. Mahbub Chowdhury, vice president of Chittagong Metropolitan Chamber of Commerce and Industry, said he lodged two cases in a Chittagong court 56 years back to recover $ 0.15 million. But the court is yet to fix any verdict. "As far as I have been dealing with such cases of the BGMEA for a long time I would suggest that the government should enact laws for settlement of such cases involving commercial attaché of the concerned buyer countries in Bangladesh and representatives from the Ministry of Commerce and Bangladesh Bank," he said. Chowdhury said Foreign Exchange department of Bangladesh Bank is receiving scores of allegations from different exporters and their banks every month which is evident from the BB divisional branch statement submitted to the Head Office. "Bangladesh Bank as custodian of the FER Act does not bother about it at all. The officials often say the bank is running short of adequate officials to deal with the such cases," he added. Cases of non-recovery of export proceeds are coming to the BGMEA arbitration cell every now and then, said BGMEA first vice president Nasir Uddin Chowdhury. "We have nothing to do except issuing an 'award' without any legal support from the court or regulatory measures under the FER Act of Bangladesh Bank," he said.