FEPD Circular No. 35: Export subsidy against export of Motorcycle

Foreign Exchange Policy Department
Bangladesh Bank
Head Office
Dhaka.
Ref. No. FEPD Circular No. 35
All Approved Dealers of Foreign Exchange Transactions.

Dear Sir,

Regarding the provision of subsidy against the export of motorcycles.

Attention is drawn to all concerned regarding the subject matter, informing that the government has decided to provide a subsidy against the export of domestically manufactured motorcycles to encourage the country's export trade. This facility will be applicable for goods shipped during the 2018-2019 fiscal year. The guidelines to be followed by approved dealer banks regarding the payment of subsidy are described in the following paragraphs:

2. Recipient of the subsidy and the amount of entitlement: In the case of exporting motorcycles produced in their own factory, the manufacturer-exporter will be entitled to a subsidy at the rate of 10% on the net FOB value. The aforementioned facility will not be applicable for exports from establishments located in Special Areas (EPZ, IZ).

3. Level of local value addition: In the case of exporting motorcycles, the rate of local value addition must be at least 30%. The export subsidy and duty draw-back/customs bond facility will not be applicable simultaneously in the aforementioned sector.

4. Deadline for submission of export subsidy application:
   (a) The aforementioned subsidy will be paid according to the DSR rules against the expenses incurred for handling, inspection, processing of exported goods, and domestic and international transportation and freight charges.
   (b) Exporters may submit application forms in Form-C at the approved dealer bank branch against the repatriation of export proceeds generated from documents prepared after the export under the export letter of credit/contract or through documentary collection. For exports against advance payment of export price under export letter of credit/contract stipulated through TT, the approved dealer bank branch must ensure the authenticity/reliability of the foreign buyer, accuracy of the price, and actual export from Bangladesh based on the TT cancellation opinion and other documents. The advance payment through TT must be made directly through banking channels (excluding exchange houses) by the export order giver or importer, and the TT cancellation opinion must mention information related to the import. In all cases, the subsidy application must be submitted to the respective approved dealer bank branch within 180 days from the date of assessment of the export price (repatriation of export price) at the respective bank abroad. However, regarding the submission of subsidy applications against exports through different shipments for the same export, the guidelines of FEPD Circular No. 12, dated December 20, 2012, will be followed. (c) Required documents for export, such as the full set of Bill of Lading/Air Waybill issued and endorsed by the carrier as proof of shipment, Commercial Invoice, Packing List, Bill of Exporter (issued and examined by Customs authorities and endorsed by the carrier for export), etc., must be submitted.

5. Receipt, examination, and payment decision of the application by the approved dealer bank branch:
   (a) The approved dealer bank will ensure in the initial examination that all documents, certificates, and endorsements mentioned in various paragraphs of the export subsidy application form are attached completely and in full with the application. A certificate in accordance with Form-B attached by the Motorcycle Manufacturers and Exporters Association of Bangladesh must be submitted with the subsidy application. The respective bank branch will also ensure the authenticity of the documents processed by the bank branch and the accuracy of the information stated therein. The approved dealer bank branch will inform the applicant institution in writing within 03 (three) working days of receiving the application regarding any defect/incompleteness found in the initial examination.

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11 December 2018
Date:--------------------
27 Agrahayan 1425

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(b) To ensure the compatibility of the application with the production capacity of the applicant institution, additional explanations/information and data/certificates collected from the bank branch's own records or other bank branches regarding export and repatriation of export prices may be required. After the application form is completed and fully received, the approved dealer will determine the payable amount. This process will be completed by sequentially following the instructions in the section designated for use by the approved dealer bank branch in the relevant application form. (c) Each application must be examined by the appointed external audit firm to ensure the accuracy of the amount payable according to the subsidy application. After conducting the examination, the claim for the amount payable for the export subsidy must be sent to the Accounts and Budgeting Department of the Head Office of Bangladesh Bank through the Head Office of the approved dealer bank in Form-D. Regarding the subsidy released from Bangladesh Bank, the details of the amount paid in favor of the applicant institution must be submitted to the Foreign Exchange Policy Department of the Head Office of Bangladesh Bank through the Head Office of the bank in Form-E within the second week of the following month. (d) Along with the approval of the subsidy payment, a seal indicating the amount of subsidy paid and the signature of the authorized officer must be placed in an easily visible location on the export price repatriation certificate (according to Appendix-5/36 of Guidelines for Foreign Exchange Transactions-2018, Volume-1), Bill of Lading/Air Waybill as proof of shipment, Commercial Invoice, Packing List, and Bill of Exporter endorsed by Customs authorities, so that there is no scope for misuse of these documents. The approved dealer bank branch must take special care to ensure that a PRC is not issued multiple times for the same export for the same facility. Additionally, before processing the application, the approved dealer bank must ensure from the Bangladesh Bank's Online Exporter Monitoring System that the export price of the respective exporter has not remained unrepatriated, according to the guidelines of FEPD Circular No. 30, dated August 16, 2017. (e) All documents related to the decision of subsidy payment must be preserved at the branch for at least 03 (three) years from the date of payment for the examination of the Bangladesh Bank's inspection/government commercial audit department. (f) If any ambiguity arises regarding export or if information is needed, the respective bank and audit firm will seek advice from the Export Promotion Bureau, TSC Bhaban, 1 Kawran Bazar, Dhaka.

6. Punitive measures for illegal subsidy payment:
   (a) If the subsidy is paid illegally, the paid amount will be recovered by debiting the account of the paying bank maintained with Bangladesh Bank.
   (b) Appropriate punitive measures will be taken against the bank officials/staff involved in the committed irregularity.
   (c) If any official of the Exporters Association is involved in the committed irregularity or assists in the irregularity by providing false information, appropriate punitive measures will be taken against the Exporters Association/official.

7. Process of payment of amount for subsidy: The amount will be provided in favor of the respective bank against the submitted application for subsidy from the fund released against the government budget allocation.

It is requested to inform all concerned parties about this matter.

Yours faithfully,

Enclosure: As per description.

(Md. Harun-Or-Rashid)
Deputy General Manager
Phone: 9530625

(Note: See FEPD Circular No. 35/2018, Paragraph 04(b)) Form-'C' Application for Subsidy against Export of Motorcycles

(a) Name and address of the applicant institution: ---------------------------------- Export Registration Certificate (ERC) Number: -----------------------------------------------

(b) Export Letter of Credit/Contract Number, Date, and Value ------------------------------------- (A legible certified copy must be submitted)

(c) Local source, quantity, and value of goods used in the production of exported goods:
Name and address of supplier | Quantity | Value | Payment Method 1 | 2 | 3 | 4

(A certificate from the Motorcycle Manufacturers and Exporters Association of Bangladesh regarding the description, value, and source of the exported goods must be submitted. Documents necessary for the payment method must be submitted.)

(d) Imported materials used in the production of 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

(A legible certified copy of the LC in column 3 must be submitted. A declaration by the exporter stating that the customs bond facility/duty draw-back facility has not been availed/claimed for the materials used in the production process and will not be claimed in the future [subject to government decision] must be submitted.)

(e) Details of export shipment:
Description of goods | Quantity | Name of importer's country | Invoice Value (Foreign Currency) | Date of Shipment | EXPI Number | Repatriated Export Price (Foreign Currency) and Date of Repatriation 1 | 2 | 3 | 4 | 5 | 6 | 7

(Legible certified copies of Commercial Invoice, Packing List, Bill of Lading/Air Waybill issued and endorsed by the carrier as proof of shipment, full set of Bill of Exporter (issued and examined by Customs authorities and endorsed by the carrier for export), and export price repatriation certificate must be submitted.)

(f) Amount of subsidy applied for:
Repatriated Export Price | Amount of Ship Hire (if applicable) | Commission, Insurance, etc. payable in Foreign Currency (if any) | Net FOB Export Price 1 | 2 | 3 | 1-(2+3)

(Legible certified copy of the Freight Sattifcate mentioning ship hire, if applicable, must be submitted.)

Value of goods used in the production of exported goods | Rate of Local Value Addition [(4-6)/4] x 100 |

Payable Subsidy | 4 x 10% |

Domestic Imported | 5 | 6 | 7 | 8

(The subsidy will be payable if the rate in column 7 is compatible with paragraph 3 of the aforementioned circular. If imported goods are unused or previously imported goods are used, the relevant production cost calculation must be mentioned in column 6 above. A production cost calculation must be submitted for this matter.)

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

Date: --------------------- ---------------------------------- Signature and designation of the owner/authorized official of the applicant institution.

(g) To be filled by the subsidy-providing bank branch:
Repatriated Export Price | Amount of Ship Hire (if applicable) | Commission, Insurance, etc. payable in Foreign Currency (if any) | Net FOB Export Price 1 | 2 | 3 | 1-(2+3)

Value of goods used in the production of exported goods | Rate of Local Value Addition [(4-6)/4] x 100 |

Amount of Payable Subsidy (in Taka)
Domestic Goods | Imported Goods | 4 x 10% |
5 | 6 | 7 | 8

(The subsidy will be payable if the rate in column 7 is compatible with paragraph 3 of the aforementioned circular.)

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

Signature, Name, and Designation of the Authorized Bank Officer for Subsidy Approval (At the date of export price repatriation, the relevant Foreign Exchange ODI Purchase Rate)

(Note: See Paragraph 05(a), FEPD Circular No. 35/2018) Form - 'B' Certificate of Verification Issued by Motorcycle Manufacturers and Exporters Association of Bangladesh

Certificate of Verification for Receiving Export Subsidy against Export of Motorcycles

1. Name, ERC Number, and Address of the Applicant:
2. Export Letter of Credit/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 and Value of goods mentioned in the Invoice:
6. Source of Local Materials for the Production of Exported Motorcycles (Name and Address of Supplier):
   Quantity: Value:
7. Source of Imported Materials Used in the Production of Exported Motorcycles (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 Price (Foreign Currency): Net FOB Export Price (Foreign Currency):
12. Certificate Number of Repatriated Export Price: Date:

Signature and Date of Exporter

Hereby certify that the information stated in the aforementioned paragraphs is correct and reliable for the purpose of receiving export subsidy against the export of motorcycles produced in our own factory by sourcing materials from the sources mentioned in serial numbers 6 and 7 above. The authenticity/reliability of the purchase order from the foreign buyer/importer has also been ensured.

Signature and Date of Exporter

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

Signature, Date, and Seal of Two Appropriate Officials of the Motorcycle Manufacturers and Exporters Association of Bangladesh

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

Form-'D'
(Note: See Paragraph 5(g), FEPD Circular No. 35/2018) According to FEPD Circular No. 35/2018 Claim Proposal for Amount Payable for Export Subsidy in the Motorcycle Export Sector

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

Name and Address of the Applicant Institution for Subsidy | Date of Application Receipt by Branch | Amount Applied For | Amount of Claim Payable | Description of Goods | Date of Shipment and Destination | EXPI Number | Total Repatriated Export Price (Foreign Currency) | Net FOB Value (Foreign Currency) | Date of Price Repatriation 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10

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

Form-'E'
(Note: See Paragraph 05(g), FEPD Circular No. 35/2018) According to FEPD Circular No. 35/2018
Details of the Account of Paid Amount for Export Subsidy in the Motorcycle Export Sector for the Year.........Month.........

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

Name and Address of the Applicant Institution for Subsidy | Export Related Information | Paid Subsidy (Taka) | Date of Payment | Pending Applications at Branch | Description of Goods | Date of Shipment and Destination | EXPI Number | Total Repatriated Export Price (Foreign Currency) | Net FOB Value (Foreign Currency) | Number | Claimed Amount (Taka) 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12

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Official Seal, Signature, Name, Designation, and Date of the Authorized Officer