FEPD Circular No. 38: Export Subsidy Against Export of Ceramics Goods

Foreign Exchange Policy Department Bangladesh Bank Head Office Dhaka. Ref. No. FEPD Circular No. 38 To: All Authorized Dealers of Foreign Exchange Transactions.

Dear Sirs,

Context regarding the provision of subsidy against the export of Ceramics goods.

It is brought to the notice of all concerned in this regard that the Government has decided to provide a subsidy against the export of domestically produced ceramics goods to encourage the country's export trade. This facility will be applicable to goods shipped during the 2018-2019 fiscal year. The following paragraphs outline the guidelines to be followed by Authorized Dealer Banks regarding the payment of subsidies:

2. Recipient of Subsidy and Extent of Entitlement: In the case of exporting ceramics goods 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 to establishments located in Special Areas (EPZ, IZ).

3. Extent of Local Value Addition: In the case of exporting ceramics goods, the rate of local value addition must be at least 30%. The export subsidy and duty drawback/duty 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 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 subsidies in Form-C at the Authorized Dealer Bank branch against repatriated export proceeds under export letters of credit/contracts prepared after the export or through Documentary Collections. For exports against advance payment repatriation under export letters of credit/contracts with conditions, the Authorized Dealer Bank branch must ensure the authenticity/reliability of the foreign buyer, correctness of value, and actual export from Bangladesh through the TT (Telegraphic Transfer) cancellation certificate and other documents. Advance payment repatriated through TT must be remitted directly through banking channels (excluding Exchange Houses) by the exporter or importer, and the TT cancellation certificate must mention information related to the import. In all cases, the subsidy application must be submitted to the relevant Authorized Dealer Bank branch within 180 days from the date of export price assessment (repatriation of export proceeds) in the relevant bank's Nostro account. However, regarding the submission of subsidy applications for exports against different shipments of the same export, the instructions of FEPD Circular No. 12, dated December 20, 2012, will be followed. (c) Complete sets of documents required for export, such as 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 and endorsed by the carrier upon delivery), etc., must be submitted.

5. Receipt, Examination, and Disbursement Decision by Authorized Dealer Bank Branch: (a) The Authorized Dealer Bank must ensure in the initial examination that all documents, certificates, and endorsements mentioned in various paragraphs of the export subsidy application form are attached with the application in complete and full form. A certificate must be submitted along with the subsidy application in accordance with the attached table (Form-B) from the Bangladesh Ceramic Manufacturers and Exporters Association. The relevant bank branch must also ensure the authenticity of the documents processed by the bank branch and the accuracy of the information mentioned therein. The Authorized Dealer Bank branch will inform the applying establishment in writing within 03 (three) working days of receiving the application regarding any discrepancy/incompleteness observed in the initial examination. (b) To ensure consistency between the production capacity of the applying establishment and the exports mentioned in the application, the Authorized Dealer Bank will determine the payable subsidy amount after the application is completed and fully received, including additional explanations/documents from the applicant and information/certificates collected from the bank branch's own records or other bank branches where applicable. This process will be completed by following the instructions in the designated section of the application form for use by the Authorized Dealer Bank branch sequentially. (c) Each application must be inspected by an appointed external audit firm to ensure the correctness of the amount payable according to the subsidy application. After conducting the inspection, the claim for the amount payable as export subsidy must be sent to the Accounts and Budgeting Department of the Head Office of Bangladesh Bank via the Head Office of the Authorized Dealer Bank in Form-D. The statement of amounts paid in favor of the applying establishment in respect of subsidies issued by Bangladesh Bank must be submitted to the Foreign Exchange Policy Department of the Head Office of Bangladesh Bank via the Head Office of the Bank in Form-E within the second week of the following month. (d) Along with the approval of subsidy payment in each case, a seal indicating the amount of subsidy paid and the signature of the authorized officer must be placed on the export proceeds repatriation certificate (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, at a place easily visible, so that these documents are not misused. The Authorized Dealer Bank branch must take special care not to issue multiple PRIs (Payment Release Instructions) for the same facility for the same export. Additionally, before processing the application, the Authorized Dealer Bank must ensure that the exporter's export proceeds have not been unrepatriated by checking the Bangladesh Bank's Online Exporter Monitoring System in accordance with the instructions 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 inspection by the Bangladesh Bank's Inspection/Government Commercial Audit Department. (f) If any ambiguity arises regarding export-related matters or if information is needed, the relevant bank and audit firm will seek advice from the Export Promotion Bureau, TSC Building, 1 Kawran Bazar, Dhaka.

6. Punitive Measures for Payment of Subsidy Outside the Rules: (a) If the subsidy is paid illegally, the paid amount will be recovered by debiting the paying bank's account maintained with Bangladesh Bank. (b) Appropriate punitive measures will be taken against the bank officials/officers involved in the committed violation. (c) If any officer of the Exporters Association is involved in the committed violation or assists in the violation by providing false information, appropriate punitive measures will be taken against the Exporters Association/officer.

7. Process of Payment of Amount for Subsidy: The amount in favor of the relevant bank will be provided from the funds released against the government budget allocation against the applications submitted for subsidies.

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

Yours faithfully,

Attachment: As per description.

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

Page-2 11 December 2018 Date: ------------------- 27 Agrahayan 1425

-2-

(Form-'C') (See Paragraph 04(b) of FEPD Circular No. 38/2018) Application for Export Subsidy Against Export of Ceramics Goods

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

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

(c) Source, Quantity and Value of Products Used in the Production of Exported Goods:

Name and Address of Supplier	Quantity	Value	Payment Method
1	2	3	4

(A certificate from the Bangladesh Ceramic Manufacturers and Exporters Association regarding the description, value, and source of the exported products must be submitted. Documents required for the payment method must be submitted if applicable.)

(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	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 duty bond facility has not been availed for materials used in the production process/duty drawback facility has not been taken and will not be applied for in the future must be submitted.)

(e) Details of Export Shipment:

Description of Product	Quantity	Name of Importer's Country	Invoice Value (Foreign Currency)	Date of Shipment	EXPI Number	Repatriated Export Proceeds (Foreign Currency) and Date of Repatriation
1	2	3	4	5	6	7

(Certified legible copies of Commercial Invoice, Packing List, Bill of Lading/Air Waybill issued and endorsed by the carrier as proof of shipment, Bill of Exporter (issued and examined by Customs and endorsed by the carrier upon delivery), etc., and the export proceeds repatriation certificate must be submitted.)

(f) Amount Applied for Subsidy:

Repatriated Export Proceeds (if applicable) Ship Hire Amount	Commission, Insurance etc. Payable in Foreign Currency (if any)	Net FOB Export Proceeds
1-(2+3)	1	2

(A certified legible copy of the Freight Surcharge containing the mention of ship hire must be submitted if applicable.)

Value of Products Used in Export Product Production	Local Value Addition Rate
[(4-6)/4] x 100

Payable Subsidy
4 x 10%

Domestic Products	Imported Products
5	6

(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. A production cost calculation must be submitted for this matter.)

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

Date: --------------------- ---------------------------------- Signature and Title of the Owner/Authorized Officer of the Applying Establishment.

(g) To be filled by the Subsidy Providing Bank Branch:

Repatriated Export Proceeds (if applicable) Ship Hire Amount	Commission, Insurance etc. Payable in Foreign Currency (if any)	Net FOB Export Proceeds
1-(2+3)	1	2

Value of Products Used in Export Product Production	Local Value Addition Rate
[(4-6)/4] x 100

Amount of Payable Subsidy (in Taka)
4 x 10% x

Domestic Products	Imported Products
5	6

(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 Title of the Authorized Bank Officer for Subsidy Approval

(At the date of export proceeds repatriation, the ODI Site Purchase Rate of the relevant Foreign Currency)

(See Paragraph 05(a), FEPD Circular No. 38/2018) Form - 'B' Certificate of Verification Issued by Bangladesh Ceramic Manufacturers and Exporters Association

Certificate of Verification for Export Subsidy Against Export of Ceramics Goods

1. Name, ERC Number and Address of 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 of Products Mentioned in Invoice: Value:
6. Source of Local Materials for Production of Exported Ceramics Goods (Name and Address of Supplier): Quantity: Value:
7. Source of Imported Materials Used in Production of Exported Ceramics Goods (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 Proceeds (Foreign Currency): Net FOB Export Proceeds (Foreign Currency):
12. Certificate Number of Repatriated Export Proceeds: Date:

Signature and Date of Exporter

I hereby certify that the information mentioned in the aforementioned paragraphs is correct and reliable for the purpose of applying for export subsidy against the export of ceramics goods 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 of the foreign buyer/importer has also been ensured.

Signature and Date of Exporter

It has been verified that the exporter's aforementioned declaration is correct. The declared export value in serial number 8 has been found consistent with the actual and current 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 proceeds (Net FOB Value).

Signatures, Date and Seal of Two Suitable Officers of Bangladesh Ceramic Manufacturers and Exporters Association

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

Form-'D' (See Paragraph 5(g), FEPD Circular No. 38/2018) Claim Proposal for Amount Payable as Export Subsidy in the Export of Ceramics Goods in accordance with FEPD Circular No. 38/2018

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

Name and Address of Subsidy Applying Establishment	Export Related Information	Date of Application Receipt by Branch	Amount Applied for	Payable Claim Amount
	Product Description	Date of Shipment and Destination	EXPI Number	Total Repatriated Export Proceeds (Foreign Currency)
1	2	3	4	5

Official Seal, Signature, Name and Title of Authorized Bank Officer

Form-'E' (See Paragraph 05(g), FEPD Circular No. 38/2018) Statement of Paid Amount as Export Subsidy in the Export of Ceramics Goods for the Month.......... of the Year......... in accordance with FEPD Circular No. 38/2018

Name of Authorized Dealer Bank Branch:..............................................................................

Name and Address of Subsidy Applying Establishment	Export Related Information	Paid Subsidy (Taka)	Date of Payment	Pending Applications Received at Branch
	Product Description	Date of Shipment and Destination	EXPI Number	Total Repatriated Export Proceeds (Foreign Currency)
1	2	3	4	5

---

Official Seal, Signature, Name, Title and Date of Authorized Officer