FEPD Circular No. 41: Export Subsidy Against Export of Galvanized Sheet/Coils

Foreign Exchange Policy Department
Bank of Bangladesh
Head Office
Dhaka.
Ref. No. FEPD Circular No. 41
To:
All Authorized Dealers of Foreign Exchange Transactions.

Dear Sirs,

Regarding: Granting of subsidy against the export of Galvanized Sheet/Coils (Hot Rolled Sheets, Hot Rolled Strips and Sheets, and Cold Rolled Galvanized Sheets).

Attention is drawn to all concerned regarding the subject matter, informing that the Government has decided to grant a subsidy against the export of domestically produced Galvanized Sheet/Coils (Hot Rolled Sheets, Hot Rolled Strips and Sheets, and Cold Rolled Galvanized Sheets) to encourage the country's export trade. This facility will be applicable to goods shipped during the 2018-2019 fiscal year. The following guidelines are to be followed by Authorized Dealer Banks regarding the payment of subsidy:

2. Recipient of Subsidy and Extent of Entitlement: In the case of exporting Galvanized Sheet/Coils (Hot Rolled Sheets, Hot Rolled Strips and Sheets, and Cold Rolled Galvanized Sheets) produced in their own factory, the manufacturer-exporter will be entitled to a subsidy at the rate of 10% on the net FOB value. This facility will not be applicable to establishments located in Special Areas (EPZ, IZ).

3. Extent of Local Value Addition: In the case of exporting Galvanized Sheet/Coils (Hot Rolled Sheets, Hot Rolled Strips and Sheets, and Cold Rolled Galvanized Sheets), the rate of local value addition must be at least 30%. The export subsidy and Duty Draw-back/C Bond facility will not be applicable simultaneously in the said sector.

4. Deadline for Submission of Export Subsidy Application:
   (a) The said subsidy will be paid according to the Dues Waiver 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 Form-'C' to the Authorized Dealer Bank branch for export subsidy against returned export proceeds prepared under Export Credit/Contract documents or through Documentary Collection. In the case of exports against Export Credit/Contract with advance payment return through TT, the Authorized Dealer Bank branch must ensure the authenticity/reliability of the foreign buyer, accuracy of price, and actual export from Bangladesh based on the TT cancellation comment 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 cancellation comment must mention information related to the import. In all cases, the subsidy application must be submitted to the concerned Authorized Dealer Bank branch within 180 days from the date of assessment of export price (return of export proceeds) at the concerned bank abroad. However, regarding the submission of subsidy applications for exports through different shipments of the same export, the guidelines of FEPD Circular No. 12, dated December 20, 2012, will be followed. (c) Documents required 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 and endorsed by the carrier for export), etc., must be submitted.

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

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(d) To ensure the authenticity of the documents processed by the bank branch and the accuracy of the information stated therein, the concerned bank branch must ensure this. The Authorized Dealer Bank branch must inform the applicant institution in writing within 03 (three) working days of receiving the application regarding any defect/incompleteness found during primary examination.

(e) To ensure consistency between the production capacity of the applicant institution and the export stated in the application, the Authorized Dealer will determine the payable amount after the application is completed and fully received by attaching additional explanations/documents from the applicant and information/documents collected from the bank branch's own records or other bank branches as necessary. This process will be completed by following the instructions in the designated section of the application form sequentially.

(f) Each application must be examined by an appointed external audit firm to ensure the accuracy of the amount to be paid according to the subsidy application. After conducting the examination, the claim for the amount payable as export subsidy must be sent to the Accounts and Budgeting Department of the Head Office of Bank of Bangladesh in Form-'G' through the Head Office of the Authorized Dealer Bank. The statement of amounts paid in favor of the applicant institution in respect of subsidies granted by Bank of Bangladesh must be submitted to the Foreign Exchange Inspection Department of the Head Office of Bank of Bangladesh through the Head Office of the bank in Form-'D' during the second week of the following month.

(g) Along with the approval of subsidy payment in each case, the concerned export proceeds return certificate (according to Guidelines for Foreign Exchange Transaction-2018, Volume-1, Appendix-5/36), Bill of Lading/Air Waybill as proof of shipment, Commercial Invoice, Packing List, and Bill of Exporter endorsed by Customs must be stamped with the seal of the amount of subsidy paid and signed by the authorized officer at an easily visible location so that these documents cannot be misused. The Authorized Dealer Bank branch must take special care to ensure that PRS is not issued multiple times for the same facility under the same export. Additionally, before processing the application, the Authorized Dealer Bank must ensure that the export proceeds of the concerned exporter have not been unreturned, following the guidelines of FEPD Circular No. 30, dated August 16, 2017, by checking the Bank of Bangladesh's Online Exporter Monitoring System.

(h) 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 examination by the Inspection Department of Bank of Bangladesh or the Government Commercial Audit Department.

(i) If any ambiguity arises regarding export or if information is needed, the concerned bank shall consult the Audit Firm, Export Promotion Bureau, TSC Building, 1 Karwan Bazar, Dhaka.

6. Punitive Measures for Illegal 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 Bank of Bangladesh.
   (b) Appropriate punitive measures shall 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 shall be taken against the Exporters Association/official.

7. Process of Payment of Amount for Subsidy: Amount shall be provided in favor of the concerned bank against the submitted application for subsidy from the funds released against the Government Budget allocation.

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

Yours faithfully,

Attachment: As per description.

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

(Form-'C')
(See Clause 04(b) of FEPD Circular No. 41/2018) Application for Subsidy Against Export of Galvanized Sheet/Coils (Hot Rolled Sheets, Hot Rolled Strips and Sheets, and Cold Rolled Galvanized Sheets)

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

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

(c) Source, Quantity and Value of Products Used in Producing Exported Goods:
Name and Address of Supplier | Quantity | Value | Payment Method 1 | 2 | 3 | 4

(Must submit Export Promotion Bureau's endorsement regarding description, value, and source of export goods. Must submit necessary documents for payment method.)

(d) Imported Materials Used in Producing 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

(Must submit legible certified copy of LC in column 3. Must submit manufacturer's declaration that Bond facility for materials used in production process was not availed/Duty Draw-back facility was not taken and will not be applied for in the future.)

(e) Details of Export Shipment:
Description of Product | Quantity | Name of Importer's Country | Invoice Value (Foreign Currency) | Date of Shipment | EXPI Number | Returned Export Proceeds and Date of Return (Foreign Currency) 1 | 2 | 3 | 4 | 5 | 6 | 7

(Must submit legible certified copies of Commercial Invoice, Packing List, Bill of Lading/Air Waybill issued and endorsed by carrier as proof of shipment, Bill of Exporter (issued and examined by Customs and endorsed by carrier for export), and Export Proceeds Return Certificate.)

(f) Amount Applied for Subsidy:
Amount of Ship Hire (if applicable for returned export proceeds) | Commission, Insurance etc. payable in Foreign Currency (if any) | Net FOB Export Value 1-(2+3) | 1 | 2 | 3 | 4

(Must submit legible certified copy of Freight Surcharge Note mentioning ship hire, if applicable)

Rate of Local Value Addition based on Value of Products Used in Producing Export Goods [(4-6)/4] x 100

Payable Subsidy
4 x 10%

Domestic Products | Imported Products
5 | 6 | 7 | 8

(Subsidy will be payable if the rate in column 7 is consistent with Clause 3 of the said 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.)

I hereby declare that I have applied for subsidy against the export of Galvanized Sheet/Coils (Hot Rolled Sheets, Hot Rolled Strips and Sheets, and Cold Rolled Galvanized Sheets) 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 subsidy taken or part thereof shall be recovered from us/our bank account.

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

(g) To be filled by the Subsidy Granting Bank Branch:
Amount of Ship Hire (if applicable for returned export proceeds) | Commission, Insurance etc. payable in Foreign Currency (if any) | Net FOB Export Value 1-(2+3) | 1 | 2 | 3 | 4

Rate of Local Value Addition based on Value of Products Used in Producing Export Goods [(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 Clause 3 of the said Circular.)

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

Signature, Name and Title of Authorized Bank Official for Subsidy Approval (At the date of export proceeds return, the relevant Foreign Currency ODI Purchase Price)

(Form-'D')
(See Clause 05(c), FEPD Circular No. 41/2018)
Export Promotion Bureau Issued Endorsement Certificate Endorsement Certificate for Receiving Export Subsidy Against Export of Galvanized Sheet/Coils (Hot Rolled Sheets, Hot Rolled Strips and Sheets, and Cold Rolled Galvanized Sheets)

1. Name, ERC Number and Address of Applicant:
2. Export 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 Products Stated in Invoice:
6. Source of Local Materials for Producing Exported Galvanized Sheet/Coils (Name and Address of Supplier):
   Quantity: Value:
7. Source of Imported Materials Used in Producing Exported Galvanized Sheet/Coils (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 Returned Export Proceeds (Foreign Currency): Net FOB Export Proceeds (Foreign Currency):
12. Certificate Number of Returned Export Proceeds: Date:

Signature and Date of Exporter

Hereby certify that the information stated in the above clauses is correct and authentic regarding the application for export subsidy against the export of Galvanized Sheet/Coils (Hot Rolled Sheets, Hot Rolled Strips and Sheets, and Cold Rolled Galvanized Sheets) 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

Upon verification of the exporter's above declaration, it has been found correct. The declared export value in serial number 8 is 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 export subsidy on the returned export proceeds (Net FOB Value).

Signature, Date and Seal of Two Appropriate Officials of Export Promotion Bureau [If any smudge, cut, or correction is made, this endorsement certificate will be considered void.]

(Form-'G')
(See Clause 5(g), FEPD Circular No. 41/2018)
Claim Proposal for Amount Payable as Export Subsidy in the Export Sector According to FEPD Circular No. 41/2018

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

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

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

(Form-'H')
(See Clause 04(g), FEPD Circular No. 41/2018)
Statement of Paid Amount as Export Subsidy in the Export Sector According to FEPD Circular No. 41/2018 for the Month......... of the Year.........

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

Name and Address of Applicant Institution for Subsidy | Paid Subsidy (Taka) | Date of Payment | Pending Applications at Branch | Description of Product | Date of Shipment and Destination | EXPI Number | Total Returned Export Proceeds (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, Title and Date of Authorized Official