Bargain hunt by some evasive garment buyers upsets the industry owners and the apparel apex body moves for blacklisting those seeking "illogical" discount on clothing-price invoices, sources say.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has asked its members to provide list of those global garment buyers asking cut-down prices as the number of such incidents has been on the increase in recent times.
In a circular the association issued the instructions to its member- factories on December 21 in line with decision of the discount committee of the central bank following deceptive deals by this section of buyers.
"There are some unscrupulous buyers that do not receive goods after production according to the letter of credit (LC), announce bankruptcy after release of goods from foreign ports or after arrival of the goods at foreign ports and ask for discounts on different illogical pleas," the circular reads.
"Exporters themselves don't offer discount rather they have to accept discount as they get trapped by fraudulent buyers, buying houses and freight forwarders."
It is the exporters who have to pay bank interest and loans while factories might face closure if EXP gets overdue, the BGMEA says in its alert note on such apparent confidence trick or con-trick.
The BGMEA president, Faruque Hassan, in the circular has stated that it becomes difficult to get approval from the central bank discount committee in some cases due to the well-built strategy of the fraud groups, absence of proper documentation from exporters and related banks' poor presentation.
Case-to-case approval from the committee is required for discount over 5.0 per cent, he says, adding that they discussed the issue in the committee meeting held on December 11.
Asked about such dishonest deals, Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said in recent times such incidents of unwanted discounts by buyers increased.
"So, we from BGMEA and BKMEA want to blacklist such buyers who want discount illogically and also make our members aware of such buyers," said Mr. Hatem, also a member of the committee.
Sources have said the committee also discussed the issue of LC clause related to sanctions and advised apparel makers to be more cautious about such conditions.
A latest LC clause by a foreign buyer state that they "would not process transactions involving any country, region or party sanctioned by the UN, US, EU, UK".
They are not liable for any delay, non-performance or/ disclosure of information for Sanctions Reasons has raised concern and confusion among exporters. The clause was later scrapped.
The trade bodies are advised not to accept LC with any unwanted clauses or conditions, they added.
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