The Financial Express

Bangladesh framing India-like rules to administer tariff preferences

| Updated: May 08, 2021 14:49:34

A view of Chittagong Port is seen in this undated file photo A view of Chittagong Port is seen in this undated file photo

Bangladesh is enacting new customs rules to administer all the tariff preferences given under various bilateral, regional and multilateral pacts, officials have said.

The new rules being framed by the National Board of Revenue (NBR) will be identical to those the Indian government enacted last September. The latter have made the attainment of tariff preferences 'almost impossible' by the trading partners of India.

Bangladesh strongly protested the Indian new customs rules when those came into effect, saying those were severely hindering the Dhaka's export to Delhi under the preferential deals.

Economists also condemned formulating and applying such harsh rules by the regional powerhouse, which might ultimately make the preferential deals unproductive.

The Customs wing of NBR has prepared draft of the new rules and sent to the government and private sector stakeholders concerned, seeking their opinions.

The government is planning to make the new rules effective from the very first day of the upcoming fiscal year, 2021-22.

According to the draft, the rules will be named as - 'Customs duty preference rules under preferential or free trade agreements'. The rules will be applicable in case of providing tariff waiver under bilateral, regional and multilateral deals, where Bangladesh is a party.

According to the proposed rules, an importer, while claiming tariff preferences, has to submit certificate of origin, date of issuance of certificate, originating criterion, if accumulation or cumulation are applicable or not, if the certificate of origin was issued from a third country, and if the goods were directly exported from sourcing country or not.

Once the rules are enacted, a designated customs official will be able to refuse tariff preference, if the certificate of origin of goods is found incomplete or does not follow proper procedure of rules of origin or if the certificate issued is not entitled for tariff preference under the trade deal concerned.

The importers have to preserve all the documents linked to certificate of origin for five years, and have to submit to the designated customs officials when sought, the draft said.

The customs officials will be empowered to seek the documents while releasing the goods and later, if it is believed that the rules of origin related conditions were not met properly.

The importer has to submit the documents within 10 days, and if those are not found enough for granting duty preferences, the customs officials will be able to send verification proposal to the focal point official of the exporting nation.

The proposed rules will empower the commissioner of customs to refuse duty preference without verification, if the submitted documents prove that the imported goods do not meet the conditions of the rules of origin.

The draft also mentioned that customs officials will be able to propose visit to the factories/establishments in the exporting countries, if the available information is found incomplete. Granting tariff preference can be kept withheld until the verification is completed.

Goods can be released during the verification procedure by realising bank guarantee at the amount of the differences between normal duty rate and preferential duty rate.

If the designated authority of the exporting country fails to reply within the stipulated time, and if, according to the information and documents supplied by the exporting country, it is found that the imported goods are not designated to get duty preference, the official concerned will be able to turn down duty waiver demand.

The customs commissioner will be able to refuse the demand of preferential tariff for the identical goods of any importer without verification, when it fails to meet rules of origin criteria.

Meanwhile, Research Director of Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem told the FE on Friday that the NBR's move to prepare the rules is constructive, as Bangladesh is going to sign a good number of preferential and free trade deals in the coming days.

"But the structure, followed in preparing the proposed rules, aims at containing duty evasion, which is not supportive of the spirit of preferential trade deals."

Instead, Mr Moazzem suggested transforming the proposed rules into the duty waiver framework.

"The proposed rules may pose barrier to any initiative for creation of preferential and free trade areas, unless changed properly."

The NBR needs to review the revenue structure of the countries, with which Bangladesh may sign trade deals in future, before incorporating such customs rules.

Otherwise, while signing trade deals in future, Bangladesh will have to change the customs rules repeatedly upon request form the counterpart nations, he added.

NBR Member Khondaker Muhammad Aminur Rahman told the FE on Friday that such rules are under formulation to check exploitation of the tariff preference benefit, if any.

"India has prepared such rules. We are also following them."

Mr Rahman said the way India checked Bangladeshi goods in the name of examining rules of origin, Dhaka is now preparing the similar checking instrument.

"We are advancing lawfully," he mentioned.

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