The government has tagged three conditions to provide utilisation declaration (UD) certificate to foreign-owned garment factories, allowing them to bring raw materials without paying duties, officials said.
To obtain the UD certificate, the foreign readymade garment (RMG) units will have to follow Bangladesh's wage structure, have to export goods only to the countries from where the investment has been made, and those factories will have to remain outside the export processing zones (EPZs), they added.
The decision was taken at a recent inter-ministerial meeting at the Ministry of Commerce (MoC) with its Senior Secretary Hedayetullah Al Mamoon in the chair.
The meeting also decided that the foreign-owned factories will be given membership of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). The Export Promotion Bureau (EPB) will issue UD certificates to them, if they follow the conditions.
These factories have been failing to bring raw materials with duty-free facility without the BKMEA membership.
In December last, leaders of BGMEA and BKMEA at a meeting with EPB agreed to provide membership to the factories, established before October 15, 2014.
They also imposed conditions that the units will have to produce only fashion items and export those to non-traditional and new markets, like Russia, Brazil, China, South Africa, India, Australia and Mexico.
Subsequently, the EPB forwarded the proposal to the Commerce Ministry for taking the final decision in this regard.
BGMEA vice-president Shahidullah Azim had earlier told the FE that allowing foreigners in low-end garment items will create chaos in the industry.
Referring to previous experience, Mr Azim said some joint-venture factories, located outside the EPZs, paid excess wages to their workers, which other adjacent local factories could not afford.
As a result, workers of the local factories, who were getting wages according to the government-set structure, demanded additional payment from their owners, leading to labour unrest.
The two trade-bodies do not issue UD certificates to factories having foreign investment on the ground that such investment outside the EPZs would pose threat to local RMG industry. Â
According to the law, membership of the associations concerned and UD certificate are must for the export-oriented factories to import raw materials under bonded-warehouse facility.
   syful-islam@outlook.com
Foreign garment makers to get benefit for raw materials import
Syful Islam | Published: March 18, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
Share if you like