WELCOME

ALL
TO
THIS SESSION
Techniques of checking import related transactions
physically as well as through ABABIL system:

Presented By-
Md. Mijanur Rahaman CDCS
Senior Assistant Vice President
& Operation Manager
Al-Arafah Islami Bank PLC
Banani Branch, Dhaka.
 Area To be Covered

 A practical demonstration on transaction

checking especially on-Bill of entry, NOC,
shipping guarantee, LC opening, amendment,
Lodgment, retirement, Investment A/C wise
income.
 LC commission & fees, Margin.
 Types of LC (sight, UPAS, Deferred.
 Post import financing (MPI/MPI (TR) import
without LC.
 Auditing Non-AD branches' foreign trade
operations .
 Bill of Entry

A Bill of Entry is a legal documents that issued by customs

authorities when goods are entered into Bangladesh.
 It is the proof of entry of goods into Bangladesh

Become overdue: four months from dates of remittance, in case

of Suppliers credit/Buyers credit- 04 months from the date of

acceptance of import documents (GFET-VOL-1, PARA-29,CH-
7)
No L/C opening keeping Keeping B/E overdue

 IMP, invoice value, quantity, HS code, should be matched.

 NOC/Shipping Guarantee

 NOC/Shipping guarantee is issued for clearing

the goods from port before original shipping
documents received.
 NOC/ Shipping guarantee should be issued
after realization of bill value or must have MPI-
TR limit
 NOC issued for land port & airport whereas
Shipping guarantee issued for see port
 NOC/ Shipping guarantee issuing charge
 LC Opening

L/C (Letter of Credit)/Credit:

Credit means any arrangement, however named or described, that is
irrevocable and thereby constitutes a definite undertaking of the issuing bank
to honour a complying presentation.

 Banned item (IPO-21-24-APPENDIX 1,B)

 Restricted item (IPO-21-24-APPENDIX 1,A)

LC opened under HO Sanction and Branch Delegation Power

Excess over Limit

 Under Invoicing, Over invoicing

 Documents Required LC
Opening:
Application of the Client with amount.
Application in Bank’s Format.

Historical Background of the Client.

Bank Statement.

3- Years Audited Balance Sheet.

Detailed particulars of the Directors (with photograph) of the organization.

Declaration of Assets and Liabilities.

Tenancy Agreement (if required).

Memorandum & Articles of Association with certificate of commencement.

Board Resolution of the company (as applicable).

Trade License, IRC, Bond License, Insurance Policy, TIN, VAT, Membership Certification from

respective authority etc. and other related papers.

Collateral Security to be offered.

Security Cheque, Charge Documents etc.

All other related papers as per Bank’s rule.

 Amendment
 If the applicant wants to change or add
some new clause in the L/C then he/she
needs to amend the same with the consent
of the beneficiary , L/C issuing Bank and
Confirming Bank (if any). Please be noted
here that the amendment is not permissible
without joint consent of all parties.
 Lodgment & Retirement

 Lodgment : If the documents are found in order or the discrepancies in the

document, if any, are subsequently accepted by the applicant, the branch will
record the particulars of the documents in the PAD Register.

Retirement : Importer is to be advised on the date of lodgment of
documents with full particulars of shipment to retire documents against
payment or to dispose the import documents as per pre-arrangement, if any.
Subsequent reminders are also to be issued every week till retirement of the
bill. Such bills will be considered and be reported as overdue if the importer
fails to retire the documents within 21 days of arrival of the relative import
consignments at port of destination
Source of funds for retirement
 Cash from client
 Fund built up from export proceed
 Bank Finance- MPI-TR
 LC Commission & Fees,
Margin

L/C commission and charges, margin as per

sanction advice schedule of charges and
Bangladesh bank circular.
L/C opening commission from the opening date to

expiry date
 Acceptance commission related to L/C tenor

For example : A 360 days sight L/C opened on

19.12.2024 for USD 1,00,000 expiry date
19.02.2025
Documents Checking
 Transport document (UCP 600, article-19-
27, ISBP, Para- D1-J20 (68-169) )

 Insurance document (UCP 600, article-28,

ISBP, Para- K1-K23 (170-180))

 Commercial invoice (UCP 600, article-18,

ISBP, Para- C1-C15(57-67))

 Other document {(UCP 600, article-14(f)}

Other documents
 Bill of Exchange (Draft) (ISBP, Para-
B1-B18 (45-57)
 Certificate of Origin (ISBP, Para- L1-L8
(181-185)
 Packing List
 Weight List
 Pre-shipment Inspection Certificate
 Health Certificate
 Radiation Certificate
 Certificate of analysis. Etc.
 Other documents
If a credit requires presentation of a document
other than a transport document, insurance
document or commercial invoice, without
stipulating by whom the document is to be
issued or its data content, banks will accept
the document as presented if its content
appears to fulfill the function of the required
document and otherwise complies with sub -
article 14 (d). - Sub-Article 14(f) of UCP 600.
 iii-iv
(1)

• To avoid un-necessary costs, delays, and disputes in

examination of documents, the applicant and the
beneficiary should carefully consider:
 Which documents are required.
 Data content of documents.
 Issuer (s) of documents.
 Time frame for presentation.
Commercial Invoice,
Transport Document,
Insurance Document
Which
Document
s OTHER DOCUMENT :
Inspection Certificate, Sub-article 14(f):
required
COO, Health certificate fulfill the function
 Fulfil
Function
-L/C calls for Inspection Certificate……

Who are the issuer

What
Should be
Followed What will be the data content.
- Country C issued a DC for meat product.
- Document asked:
- Invoice with HS code and

- Health Certificate.

- Health Certificate bore a statement:

“The goods are not fit for human consumption.”
- Confirming Bank decided document complying.
- Issuing Bank raised discrepancy:
- Data conflict between invoice and health certificate.

[HS code stipulated in invoice referring meat : fit for human

consumption. And health certificate indicate unfit for human
consumption]

- What is your opinion??

ICC Official Opinion R-390 :

Document is complying.
Basis of Document
Checking
1. The terms and conditions of
the credit.
2. The applicable provisions
UCP600 rules.
3. The International Standard
Banking Practice.
4. The Document itself. Sub-
Article 14(d) of UCP 600.
Complying presentation
Complying presentation means a
presentation that is in
accordance with the terms and
conditions of the credit, the
applicable provisions of these
rules and international standard
banking practice. UCP-600,
Article-2
 Types of L/C (Sight, UPAS, Deferred)
 Sight L/C-
Commercial and Trading items
 Deferred L/C-Suppliers Credit

 UPAS L/C- Buyers Credit

Under Deferred L/C & UPAS L/C (GFET, Vol-1, Para-33)

 Capital machinery and spares for own use by industrial importers for 360

days.
 Industrial raw material for own use of industrial importers 180 days
 Import of coastal vessels including oil tankers and ocean going vessels
360 days.
 Import of agricultural implements and chemical fertilizers 180 days.
 Import of life saving drugs 90 days
 HR Coil, scrap, pig iron & sponge iron used for manufacturing of flat steel
and long steel under steel industries for 360 days.
Post Import Financing (MPI/MPI
(TR)

MIB

MPI-TR

MPI
 Import Without LC ( IPO-2021-2024,PARA-
8,SUB PARA-3)

 Industrial import: Raw materials, Capital machinery- Any

amount
 Commercial import –maximum USD 5.00 LAC yearly
 Any amount may be imported commercially under case
to case approval of Government
 As per an agreement between Mayanmer and Bagnladesh
executed 1994-

Not exceeding 50 thousand US DOLLAR in a single shipment import -
Rice,corn, beans, Ginger, Garlic, Soya bean oil, pallm oil, onion and fish .
30 thousand us dollar in case of other products

Rice import in case of under government managemernt maximum 2
million US dollar
Import Without LC ( IPO-2021-2024,PARA-8,SUB
PARA-3)

PII- Proforma Invoice Information

Import Against Advance TT (15 code)
 USD 10,000 without foreign bank guarantee.

 USD 25,000 from ERQ

 Auditing Non- AD Branch’s Foreign
Trade Operations.
Handling of L/C’s by Forwarding Branches:
Procedure to be followed by Forwarding Branch:
Before sending proposal to AD Branch the forwarding

Branch will:
On/after opening the L/C the forwarding Branch will:

Endorsement of Copy Documents again Cash LC

(Sight/Usance):
Upon getting the original shipping documents from AD

Branch The forwarding Branch will:

For opening and handling Cash L/C (Usance/Deferred) by

Forwarding Branch will:

 Auditing Non- AD Branch’s Foreign
Trade Operations.

Procedure to be followed by the A/D branches for opening

L/C of the forwarding branches:
 Responsibilities of AD Branches on or before opening L/C of
forwarding Branches.
 Upon receipt of the copy documents with forwarding Branch
request for endorsement the AD Branches will:
 Upon receipt of the original shipping documents the AD
Branches will:
 All the Copy/Original documents of forwarding branch will
be endorsed in favor of Forwarding Branch by the AD
Branch and the Forwarding Branch will subsequently endorse
in favor of the client'. or C&F Agent as the case may be.
 Auditing Non- AD Branch’s Foreign
Trade Operations.
 All the AD and Forwarding branches have to create cash
LC Import Bills instead of creating "Murabaha Import
Bills" if the document will be retired against Cash' It is
also mentionable that during the interim period of time for
preparing client wise product for "cash LC import Bills "in
our Core Banking Software (CBS) by our ICTW the
Branch will create "Murabaha Import Bills".
 For handling UPAS L/C all ADs & Forwarding branches
have to follow our Instructor Circular No'.
AIBL/IBW/FTOD /14/09 date: 04.03.2014.
 Auditing Non- AD Branch’s Foreign
Trade Operations.
 For the forwarding branches, it is advisable not to deal in
export business nor handle any BB L/C, which should be
done by A/D Branches only.
 All the AD and Forwarding Branches must
comply/observe all the terms and conditions of Guidelines
for Foreign Exchange Transactions (2009) of Bangladesh
bank, existing IPO & other related instructions/circulars of
the regulatory authorities and head office time to time' .
 AD and Forwarding Branches shall preserve all files and
records also after the retirement of the L/C/bills as per
bank's rules.
Q&A