FEPD Circular No. 37: Export subsidy against export of Razor and Razor blades

Foreign Exchange Policy Department
Bangladesh Bank
Head Office
Dhaka.
Ref. No. 37
All Approved Dealers of Foreign Exchange Transactions.
Dear Sirs,

Regarding the provision of subsidy against the export of Razors and Razor Blades.

With reference to the subject matter, it is informed to all concerned that the Government has decided to provide subsidy against the export of domestically produced Razors and Razor Blades to encourage the country's export trade. This facility will be applicable to goods shipped during the 2018-2019 fiscal year. The instructions to be followed by Approved Dealers regarding the payment of subsidy are described in the following paragraphs:

2. Recipient of Subsidy and Entitlement: In the case of export of Razors and Razor Blades manufactured in own factories, 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 to exports from establishments located in Special Zones (EPZ, EZ).

3. Level of Local Value Addition: In the case of export of Razors and Razor Blades, the rate of local value addition must be at least 40%. The aforementioned export subsidy and Duty Draw-back/Duty Bond facility will not be applicable simultaneously.

4. Deadline for Submission of Export Subsidy Application:
   (a) The aforementioned subsidy will be payable against the expenses incurred for handling, quality improvement, processing of exported goods, and domestic and international transportation and freight charges, in accordance with the DWTO rules. (b) Exporters can submit applications for export subsidy in Form-K at the branch of the Approved Dealer Bank against the export earnings repatriated through documents prepared after export under the Export Credit Letter/Contract or through Documentary Collection. In the case of export against Export Credit Letter/Contract where advance export price is repatriated through TT, the Approved Dealer Bank branch must ensure the authenticity/reliability of the foreign buyer, correctness of the price, and repatriation of actual exports from Bangladesh based on the TT advice and other documents. Advance payment through TT must be made directly through banking channels (excluding Exchange Houses) by the exporter or importer, and the TT advice must mention information related to the import. In all cases, the subsidy application must be submitted to the relevant Approved Dealer Bank branch within 180 days from the date of assessment of export value (repatriation of export value) in the Nostro account of the relevant bank abroad. However, regarding the submission of subsidy applications against exports through different shipments for the same export, the instructions of FE Circular No. 12, dated December 20, 2012, shall be followed. (c) Necessary documents for export, such as Bill of Lading/Airway Bill issued and certified by the transport authority as proof of shipment, Commercial Invoice, Packing List, Bill of Exporter (issued and examined by Customs authority and certified by transport authority as proof of loading and departure), and other full sets, etc., must be submitted.

5. Receipt, Examination, and Settlement of Payment of Application by Approved Dealer Bank Branch:
   (a) The Approved Dealer Bank must ensure in the initial examination that all documents, certificates, and attestations mentioned in various paragraphs of the export subsidy application form are attached in complete and full form. A certificate in accordance with Form-K attached from the Export Promotion Bureau must be submitted with the subsidy application. The relevant bank branch must also ensure the authenticity of documents processed by the bank branch and the correctness of the information mentioned therein. If any error/incompleteness is observed in the initial examination, the Approved Dealer Bank branch will inform the applying institution in writing within 03 (three) working days of receipt of the application.

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

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(b) To ensure consistency between the production capacity of the applying institution and the export mentioned in the application, the Approved Dealer will determine the payable amount after receiving the application in complete and full form by attaching additional explanations/information from the applicant as necessary, and information/certificates collected from other bank branches from the bank branch's own records regarding export and repatriation of export value. This process will be completed by following the instructions in the section reserved for use by the Approved Dealer Bank branch in the relevant application form sequentially. (c) Each application must be audited by the appointed external audit firm. After completing the audit program, the claim for the amount payable as export subsidy must be sent to the Accounts and Budgeting Division of the Head Office of Bangladesh Bank via the Head Office of the Approved Dealer Bank in accordance with Form-G. In respect of the subsidy released from Bangladesh Bank, a statement of the amount paid in favor of the applying institution must be submitted to the Foreign Exchange Inspection Division of the Head Office of Bangladesh Bank via the Head Office of the Bank in the second week of the following month in accordance with Form-G. (d) In every case, along with the approval of subsidy payment, the relevant export value repatriation certificate (according to Appendix-5/36 of Guidelines for Foreign Exchange Transactions-2018, Volume-1), Bill of Lading/Airway Bill as proof of shipment, Commercial Invoice, Packing List, and Bill of Exporter certified by the Customs authority must have the amount of subsidy paid stamped visibly on top, and the signature of the authority approving the payment, so that there is no scope for misuse of such documents. The Approved Dealer Bank branch must take special care that a PRD is not issued multiple times for the same benefit under the same export. Additionally, before processing the application, the Approved Dealer Bank must ensure from the Bangladesh Bank's Online Exporter Monitoring System that the export value of the relevant exporter has not remained unrepatriated, in accordance with the instructions of FE Circular No. 30, dated August 16, 2017. (e) All documents regarding the settlement of subsidy payment must be preserved at the branch for at least 03 (three) years from the date of payment for examination by the Inspector/Official Commercial Audit Division of Bangladesh Bank. (f) In case of any ambiguity regarding export or need for information collection, the relevant bank will take advice from the Audit Firm, Export Promotion Bureau, TCB Building, 1 Kawran Bazar, Dhaka.

6. Punitive Measures for Payment of Subsidy Outside the Rules:
   (a) If subsidy is paid outside the rules, the amount paid will be recovered by closing the account of the paying bank kept with Bangladesh Bank.
   (b) Appropriate punitive measures will be taken against bank officials/managers involved in the irregularity.
   (c) If any official of the Exporters Association is involved in the irregularity or cooperates in the irregularity by providing false information, appropriate punitive measures can be taken against the Exporters Association/official.

7. Process of Payment of Amount for Subsidy: The amount will be provided to the relevant bank against the submitted application for subsidy from the funds released against the government budget allocation.

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

Yours faithfully,
Attachment: As described.

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

(See paragraph 04(b) of FE Circular No. 37/2018) Form-'K' Application for Subsidy against Export of Razors and Razor Blades

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

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

(c) Source, Quantity and Price of Locally Sourced Products Used in the Production of Exported Goods:
Name and Address of Supplier Quantity Price Payment Method 1 2 3 4 (Must submit the certificate of Export Promotion Bureau regarding the description, price and source of exported products. Must submit necessary documents as proof of payment method.)

(d) Imported Materials Used in the Production of Exported Goods:
Name and Address of Supplier Name and Quantity of Product LC/Back to Back LC/ Documentary Collection Number, Date Price 1 2 3 4 (Must submit a readable certified copy of the LC in column 3. Must submit a declaration by the exporter that duty bond facility has not been availed for materials used in the production process/duty draw-back facility has not been availed and will not be applied for in the future.)

(e) Details of Export Shipments:
Description of Product Quantity Name of Importer's Country Invoice Value (In BDT) Date of Shipment EXPI Number Repatriated Export Value and Date of Repatriation (In BDT) 1 2 3 4 5 6 7 (Must submit readable certified copies of Commercial Invoice, Packing List, Bill of Lading/Airway Bill issued and certified by transport authority as proof of shipment, Bill of Exporter (issued and examined by Customs authority and certified by transport authority as proof of loading and departure) and other full sets, and export value repatriation certificate.)

(f) Amount Applied for Subsidy:
Amount of Ship Freight in case of Repatriated Export Value BDT Payable Commission, Insurance etc. (if any) Net FOB Export Value 1-(2+3) 1 2 3 4 (Must submit a readable certified copy of the Freight Certificate mentioning ship freight, if applicable)

Price of Products Used in Production of Export Goods Local Value Addition Rate [(4-6)/4] x 100 Payable Subsidy 4 x 10% Domestic Imported 5 6 7 8 (Subsidy will be payable if the rate in column 7 is consistent with paragraph 3 of the aforementioned circular. If imported products are unused or previously imported products are used, the relevant production cost calculation must be mentioned in column 6 above. Must submit production cost calculation for this matter.

It is hereby declared that we have applied for subsidy against the export of Razors and Razor Blades manufactured 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 of subsidy received or part thereof can be recovered from us/our bank account.

Date: --------------------- ---------------------------------- Signature and Designation of Owner/ Authorized Signatory of the Applying Institution.

(g) To be filled by the Subsidy Providing Bank Branch:
Amount of Ship Freight in case of Repatriated Export Value BDT Payable Commission, Insurance etc. (if any) Net FOB Export Value 1-(2+3) 1 2 3 4 Price of Products Used in Production of Export Goods Local Value Addition Rate [(4-6)/4] x 100 Amount of Payable Subsidy (In Taka) Domestic Products Imported Products 4 x 10% 5 6 7 8 (Subsidy will be payable if the rate in column 7 is consistent with paragraph 3 of the aforementioned circular.)

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

Signature, Name and Designation of Bank
Authority Authorized to Approve Subsidy
(According to the ODI Site Purchase Price of the relevant Foreign Exchange on the date of Export Value Repatriation)

(See paragraph 05(a), FE Circular No. 37/2018) Form - 'K' Certificate of Attestation Issued by Export Promotion Bureau Certificate of Attestation for Receiving Export Subsidy against Export of Razors and Razor Blades

1. Name, ERC Number and Address of Applicant:
2. Export Credit Letter/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 Products Mentioned in Invoice: Value:
6. Source of Local Materials Used in Production of Exported Razors and Razor Blades (Name and Address of Supplier):
   Quantity: Value:
7. Source of Imported Materials Used in Production of Exported Razors and Razor Blades (Name and Address of Supplier):
   Quantity: Value:
8. Description of Exported Products: Quantity: Value:
9. Date of Shipment: Destination Port:
10. EXPI Number: Value: Date:
11. Total Repatriated Export Value (In BDT): Net FOB Export Value (In BDT):
12. Certificate Number of Repatriated Export Value: Date:
    Signature and Date of Exporter

Hereby it is declared that the statements mentioned in the aforementioned paragraphs are correct and reliable regarding the export against the procurement of materials from the sources mentioned in serial numbers 6 and 7 above through the production of Razors and Razor Blades in our own factory. It is also ensured regarding the authenticity/reliability of the purchase order of the foreign buyer/importer. Signature and Date of Exporter

It is verified that the declaration mentioned in serial number 8 is found correct and consistent with the existing international market price, and the authenticity/reliability of the foreign buyer has also been ensured. It is recommended to pay the export subsidy on the repatriated export value (Net FOB value). Signature, Date and Seal of Two Appropriate Officials of Export Promotion Bureau

[If any smudging, cutting or correction is made, this certificate will be considered void.]

Form-'G'
(See paragraph 5(g), FE Circular No. 37/2018)
According to FE Circular No. 37/2018
Claim Statement for Amount Payable as Export Subsidy in the Export of Razors and Razor Blades

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

Name and Address of
Subsidy Applying
Institution
Information Related to Export
Date of Receipt of
Application by
Branch
Amount of
Applied Claim
Amount of
Payable Claim
Description of
Product
Date of Shipment and
Destination
EXPI
Number
Total Repatriated
Export Value
(In BDT)
Net FOB
Value
(In BDT)
Date of
Value Repatriation
1 2 3 4 5 6 7 8 9 10
Official Seal Signature, Date, Name and Designation of Authorized Bank Official

Form-'H'
(See paragraph 05(g), FE Circular No. 37/2018) According to FE Circular No. 37/2018
Statement of Payment of Amount Payable as Export Subsidy in the Export of Razors and Razor Blades for the Month of.......... of the Year.........
Name of Approved Dealer Bank Branch:..............................................................................

Name and Address of
Subsidy Applying
Institution
Information Related to Export
Paid
Subsidy (Taka)
Date of
Payment
Unsettled Applications
Received at Branch
Description of Product Date of Shipment and
Destination
EXPI
Number
Total Repatriated
Export Value
(In BDT)
Net FOB
Value (In BDT)
Number Claimed
Amount
(Taka)
1 2 3 4 5 6 7 8 9 10

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