EXPORT SECTION

Payment for goods exported from Bangladesh should be received through an Authorized Dealer in freely convertible foreign currency or in Bangladesh Taka from a Non-Resident Account.

PARTIES TO EXPORT TRANSACTIONS

? L/C Issuing Bank
? Importer
? L/C Advising Bank
? Exporter
? Confirming Bank (If any)
? Negotiating Bank
? The paying/Reimbursing

Export L/C

Export L/Cs is issued by a foreign bank favoring Bangladeshi exports through our banks having correspondent relationship with them.

SERVICES PROVIDED BY BANKS AGAINST EXPORT L/C

A) Advising of export L/C:
The advising bank getting the import L/C sent by the issuing bank located abroad will advise the L/C to the beneficiary without any engagement or responsibly on their part. It will see the following only:

I. Authenticity of L/C (Test agreed in case of Telex L/C and signature verified in case (air mail L/C).

II. Merchandise specified in the L/C is permissible and clauses incorporated in the L/C are not against country’s regulations.

B) Add Confirmation of Export L/C:
Bank may add additional confirmation to export L/C where there is specific instruction from the L/ C issuing bank to do so. Additional confirmation of L/C gives the seller a double assurance of payment. Bank’s requirement of adding confirmation:

I. Issuing Bank should be a reputed bank.
II. Credit line/Arrangement with the L/C issuing bank.
III. L/C clause are to be acceptable to confirming bank
IV. Approval from the competent authority for adding confirmation of export L/C.
V. Confirmation charges are to be recovered as per rules.

C) Negotiating of Export L/C:
Documents/papers to be submitted by exporter to bank for negotiation/collection against export L/C. the exporter submit the documents to bank as per requirement of bank. List of export documents is as follows:

I. Export L/C
II. EXP Form
III. Bill of exchange
IV. Invoice
V. Bill of Lading
VI. Packing List
VII. Certificate of Origin
VIII. Inspection Certificate
IX. Insurance Document
X. Weight List
XI. Any other documents as per L/C

Bank must scrutinize all the documents stipulated in the credit with reasonable care to ascertain whether they confirm with the terms and conditions or not. If the documents are drawn strictly in terms of the credit, the bank may negotiate and pay the value of export bill to the exporter at:

? OD buying rate (Sight Draft)
? Usance rate (For DA Bill)
? Appropriate rate for DP Bill

Accounting Treatment

After adjustment of pre-shipment credit:

FBP (foreign bill purchased) A/C

Dr.

Party’s A/C

Cr.


REALIZATION OF EXPORT PROCEEDS:
On receipt of credit of the export bill from the foreign correspondent, banks realize the bill at specified rate and following vouchers are passed.

H/O (ID) --------------Dr.
FBP A/C----------------Cr.

Income A/C on exchange earning ------Cr.

COLLECTION DOCUMENTS:
Export documents not covered by and L/C documents not drawn in terms of the credit are accepted on collection basis with the shipper authority at their documents are forwarded through foreign correspondents to the drawee for payment or acceptance. After realization of the bills on collection, export is paid appropriate rate after adjustment of liabilities on his account (if any)

Voucher to be passed:
Lodgment (Accepted for sending on collection):

FBPL A/C

Dr.

FBPC A/C

Cr.


REALIZATION: (REVERSE OF CONTRA VOUCHER)

FDPC A/C

Dr.

FBPL A/C

Cr.

H/O (ID) A/C

Dr.

Party’s A/C

Cr.


Income on com/charge

Cr.