FEPD Circular No. 30: Export subsidy against export of agar and agarwood

Foreign Exchange Policy Department
Bangladesh Bank
Head Office
Dhaka.
Ref. No. FEPD-Circular-30

Dated: ----------------------
November 24, 2016

To All Approved Dealers in Foreign Exchange Transactions.
Dear Sirs,

Regarding the provision of subsidy against the export of agar and agarwood.

The attention of all concerned is drawn to the subject cited above, informing that the Government has decided to provide subsidy against the export of domestically produced agar and agarwood to encourage the country's export trade. This facility will be applicable for goods shipped from the date of issuance of this circular. The following paragraphs outline the guidelines to be followed by approved dealer banks regarding the payment of subsidy:

2. Recipient of Subsidy and Extent of Entitlement: In the case of exporting agar and agarwood produced in own factories, the manufacturer-exporter shall be entitled to a subsidy at the rate of 20% on the net FOB value.

3. Deadline for Submission of Export Subsidy Application:
   (a) The aforementioned subsidy shall be paid in accordance with the DUS (Duty Drawback Scheme) rules against the expenses incurred for handling, quality inspection, processing of exported goods, and domestic and international transportation and freight charges. (b) Exporters may submit applications for export subsidy in Form-C at the approved dealer bank branch against repatriated export proceeds generated under export credit documents/contracts or through documentary collection. For exports against advance payment repatriation under export credit documents/contracts via TT (Telegraphic Transfer), the approved dealer bank branch must ensure the authenticity/reliability of the foreign buyer, accuracy of value, and genuine export from Bangladesh based on the TT banker's advice and other documents. Advance payment via TT must be made directly through banking channels (excluding exchange houses) by the exporter or importer, and the TT banker's advice must mention information related to the import. In all cases, the subsidy application must be submitted to the concerned approved dealer bank branch within 180 days from the date of export value assessment (repatriation of export proceeds) at the concerned bank abroad. However, regarding the submission of subsidy applications against exports via different shipments for the same export, the guidelines of FEPD Circular No. 12, dated December 20, 2012, shall be followed. (c) Documents required for export, such as Bill of Lading/Air Way Bill as proof of shipment, Commercial Invoice, Packing List, Bill of Exporter issued by Customs (Form 'A' and 'B'), etc., must be submitted.

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4. Receipt, Verification, and Payment Decision of Application by Approved Dealer Bank Branch:
   (a) The approved dealer bank shall verify in the initial examination that all documents, certificates, and acknowledgments mentioned in various sections of the export subsidy application form are complete and attached with the application. A certificate attached in accordance with the format (Form-B) from the Bangladesh Agar and Agarwood Manufacturers and Exporters Association must be submitted with the subsidy application. The concerned bank branch shall also ensure the authenticity of documents processed by the bank branch and the accuracy of information mentioned therein. If any discrepancy/incompleteness is found during the initial examination, the approved dealer bank branch shall inform the applicant institution in writing within 03 (three) working days of receiving the application. (b) To ensure consistency between the production capacity of the applicant institution and the exported goods mentioned in the application, additional explanations/information and data/certificates collected from the bank branch's own records or other bank branches as necessary shall be attached to the application. After the application is complete and fully received, the approved dealer bank shall determine the payable amount. This process shall be completed by following the instructions sequentially in the designated section of the concerned application form for use by the approved dealer bank branch. (c) Each application shall be inspected by the appointed external audit firm to ensure the accuracy of the amount to be paid according to the subsidy application. After conducting the inspection, the claim for payment of export subsidy shall be sent to the Accounts and Budgeting Department of the Head Office of Bangladesh Bank via the Head Office of the approved dealer bank in Form-C. Regarding the subsidy drawn from Bangladesh Bank, the statement of amount paid in favor of the applicant institution shall be submitted to the Foreign Exchange Inspection Department of Bangladesh Bank, Head Office, via the Head Office of the bank in Form-D during the second week of the following month. (d) Along with the approval of subsidy payment in each case, the concerned export value repatriation certificate (according to Guidelines for Foreign Exchange Transaction-2009, Volume-1, Appendix-5/23), Bill of Lading/Air Way Bill as proof of shipment, Commercial Invoice, Packing List, and Bill of Exporter certified by Customs shall be marked with the seal of the paid amount and the signature of the authorized officer at an easily visible place to prevent misuse of such documents. The approved dealer bank branch shall take special care to ensure that PRS (Payment Receipt Slip) is not issued multiple times for the same benefit under the same export. Additionally, the approved dealer bank shall ensure that the export proceeds of the concerned exporter have not remained unrepatriated by checking the Bangladesh Bank's Online Exporter Monitoring System in accordance with the instructions
   of FEPD Circular-31, dated December 27, 2001. (e) All documents related to the decision of subsidy payment shall be preserved at the branch for at least 03 (three) years from the date of payment for examination by the inspection department of Bangladesh Bank or the Government Commercial Audit Department. (f) If any ambiguity arises regarding export or if information is needed, the concerned bank and audit firm shall consult the Export Promotion Bureau, TSCB Building, 1 Kawran Bazar, Dhaka.

5. Punitive Measures for Unauthorized Payment of Subsidy:
   (a) If subsidy is paid illegally, the paid amount shall be recovered by adjusting the account of the paying bank kept with Bangladesh Bank.
   (b) Appropriate punitive measures shall be taken against the bank officials/staff involved in the violation.
   (c) If any official of the Exporters Association is involved in the violation or assists in the violation by providing false information, appropriate punitive measures shall be taken against the Exporters Association/official.

6. Process of Payment of Amount for Subsidy: The amount shall be provided in favor of the concerned bank against the submitted application for subsidy from the funds drawn against government budget allocation.

All concerned parties are requested to be informed about this matter.

Yours faithfully,

Enclosure: As per description.

(Md. Zakir Hossain Chowdhury)
Deputy General Manager
Phone: 9530250

(See paragraph 03(b) of FEPD Circular No. 30/2016) Form-'C' Application for Export Subsidy against Export of Agar and Agarwood

(a) Name and Address of Applicant Institution: ---------------------------------- Export Registration Certificate (ERC) Number: -----------------------------------------------

(b) Export Credit Document/Contract Number, Date and Value ------------------------------------- (Must submit a legible certified copy)

(c) Source, Quantity and Value of Local Procurement of Goods Used in Producing Exported Goods:
Name and Address of Supplier | Quantity | Value 1 | 2 | 3

(Must submit a certificate from the Bangladesh Agar and Agarwood Manufacturers and Exporters Association regarding the description, value, and source of exported goods.)

(d) Imported Ancillary Materials Used in Processing Exported Goods:
Name and Address of Supplier | Name and Quantity of Goods | LC/Back-to-Back LC/Documentary Collection Number, Date | Value 1 | 2 | 3 | 4

(Must submit a legible certified copy of the LC in column 3.)

(e) Details of Export Shipment:
Description of Goods | Quantity | Name of Importer's Country | Invoice Value (in Foreign Currency) | Date of Shipment | EXPI Number | Repatriated Export Value and Date of Repatriation (in Foreign Currency) 1 | 2 | 3 | 4 | 5 | 6 | 7

(Must submit legible certified copies of Commercial Invoice, Packing List, Bill of Lading/Air Way Bill as proof of shipment, Bill of Exporter issued by Customs (Form 'A' and 'B' included), etc., and the export value repatriation certificate.)

(f) Amount Applied for Subsidy:
Repatriated Export Value | Amount of Ship Hire (if applicable) | Commission, Insurance, etc. Payable in Foreign Currency (if any) | Net FOB Export Value (1-(2+3)) | Payable Subsidy (20/100) 1 | 2 | 3 | 4 | 5

(Must submit a legible certified copy of the Freight Surcharge Certificate mentioning ship hire, if applicable.)

I hereby declare that the application for subsidy against the export of agar and agarwood produced in our own factory has been made. All information/declarations provided in this application are complete and correct. If any error/false information/fraud/forgery is discovered later, the entire amount of subsidy taken or part thereof shall be recovered from me/us and/or from my/our bank account.

Date: --------------------- ---------------------------------- Signature and Designation of Owner/Authorized Official of Applicant Institution.

(g) To be filled by the Subsidy Providing Bank Branch:
Repatriated Export Value (in Foreign Currency) | Total Deduction for Commission, Insurance, and Ship Hire Payable in Foreign Currency (if applicable) | Net FOB Export Value (1-2) | Amount of Payable Subsidy (in Taka): (20/100) 1 | 2 | 3 | 4

Amount of Subsidy --------------- Taka (in words: -----------------).
Date of Payment: --------------------

Signature, Name and Designation of Authorized Bank Official for Subsidy Approval (At the time of export value repatriation, the ODI site purchase price of the concerned foreign currency)

(See paragraph 04(a) of FEPD Circular No. 30/2016) Form - 'B' Certificate of Verification Issued by Bangladesh Agar and Agarwood Manufacturers and Exporters Association

Certificate of Verification for Receiving Export Subsidy against Export of Agar and Agarwood

1. Name, ERC Number and Address of Applicant:
2. Export Credit Document/Contract Number: Date: Value:
3. Name and Address of Foreign Buyer:
4. Name and Address of Foreign Buyer's Bank:
5. (a) Invoice Number: Date:
   (b) Quantity of Goods Mentioned in Invoice: Value:
6. Source of Local Materials for Producing Exported Agar and Agarwood (Name and Address of Supplier):
   Quantity: Value:
7. Source of Imported Ancillary Materials Used in Processing Exported Agar and Agarwood (Name and Address of Supplier):
   Quantity: Value:
8. Description of Exported Goods: Quantity: Value:
9. Date of Shipment: Destination Port:
10. EXPI Number: Value: Date:
11. Total Repatriated Export Value (in Foreign Currency): Net FOB Export Value (in Foreign Currency):
12. Certificate Number of Repatriated Export Value: Date:

Signature and Date of Exporter

Hereby certifying that the information mentioned in the aforementioned paragraphs is correct and reliable regarding the application for export subsidy against the export of agar and agarwood produced in our own factory through the procurement of materials from the sources mentioned in serial numbers 6 and 7 above. The authenticity/reliability of the purchase order of the foreign buyer/importer has also been ensured.

Signature and Date of Exporter

It has been verified that the above declaration of the exporter is correct. The declared export value mentioned in serial number 8 is found to be reasonable and consistent with the current domestic market price, and the authenticity/reliability of the foreign buyer has been ensured. It is recommended to pay export subsidy on the repatriated export value (Net FOB Value).

Signature, Date and Seal of Two Appropriate Officials of Bangladesh Agar and Agarwood Manufacturers and Exporters Association

[Any erasure, cutting or correction will render this certificate void.]

(See paragraph 4(g) of FEPD Circular No. 30/2016) Form-'C' Claim Proposal for Payment of Export Subsidy in the Export of Agar and Agarwood in accordance with FEPD Circular No. 30/2016

.............................................. Bank, Head Office, Dhaka.

Name and Address of Applicant Institution for Subsidy | Information Related to Export | Date of Receipt of Application by Branch | Amount Applied for | Payable Claim Amount | Description of Goods | Date of Shipment and Destination | EXPI Number | Total Repatriated Export Value (Foreign Currency) | Net FOB Value (Foreign Currency) | Date of Value Repatriation 1 | 2 | 3 | 4 | 5 | 6 | 6 | 7 | 8 | 9

Official Seal, Signature, Date, Name and Designation of Authorized Bank Official

(See paragraph 04(g) of FEPD Circular No. 30/2016) Form-'D'
Statement of Paid Amount for Export Subsidy in the Export of Agar and Agarwood in accordance with FEPD Circular No. 30/2016 for the Month of.......... Year.........

Name of Approved Dealer Bank Branch:..............................................................................

Name and Address of Applicant Institution for Subsidy | Information Related to Export | Paid Subsidy (Taka) | Date of Payment | Pending Applications at Branch | Description of Goods | Date of Shipment and Destination | EXPI Number | Total Repatriated Export Value (Foreign Currency) | Net FOB Value (Foreign Currency) | Number | Claimed Amount (Taka) 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 -------- ----------------------------- Official Seal, Signature, Name, Designation and Date of Authorized Official