COMMERCIAL PROCEDURES AND DOCUMENTATION FOR EXPORT-ORIENTED GARMENT FACTORIES IN BANGLADESH:

For the Export-oriented garment sector, there is some specific job for Commercial persons. These commercial procedures & activities should properly maintain otherwise shipment could not be done on time to the customer. These are the Basic Commercial activities/ operations, these should be followed by Commercial guys & Merchandisers for Export Garments in Apparel Sector

COMMERCIAL ACTIVITIES FOR EXPORT GARMENTS:

01. ORDER GENERATION STAGE:

• Follow up to get the export L/C from Buyer
• Export L/C collection from advising Bank with authentication
• Export L/C check up whether there is any discrepancy or if it is as per your confirmation and as per  UCPDC 600
• Proforma invoice to be collected from supplied as per Buyers instruction or their agent if the order is on a CM basis. In the case of FOB, order Suppliers should be selected by the garments unit and the merchandiser will collect the proforma invoice from the suppliers as per his consumption of the order.

                                            Image: A seaport, goods are being shipped by ship                    

 

02. BB L/C OPENING STAGE:
To open BB L/C one proposal should be prepared and the following documents to be submitted to the bank.
(a)   L/C application form duly filled up and signed by the account holder.
(b)   Proforma Invoice Duly attested by the L/C opener
 (c)    Forwarding Letter on Letterhead pad.
(d)   Insurance cover note with pad money receipt.
(e)    EXP or L/C original copy.
(f)    LCA form [ Letter of credit Authorization form ] duly fill up & signed.
(g)   IMP form [ Import permission from ] duly fill up & signed.

i) DOCS CHECKING:  Bank will check up on the proposal, particularly export L/C terms & conditions, and whether it is possible to open BB L/C to execute the export order. Normally the bank will check export L/C Validity, B/L clause, reimbursement clause & ICC500 [ revision 1993 ] Rules & regulations. After satisfaction with all respect, the bank will agree to open BB L/C

ii) BANK LIMIT:

If the L/C proposal exceeds the branch limit, the branch office will send the proposal to their head office for further approval or sanction.

iii)  L/C OPEN  :

After the proposal is approved by the bank, the BB L/C will be opened & the bank will give the L/C number.

 IV) BB L/C TRANSMISSION  :                

Bank officials will fill up the L/C telex format & sign it by two Sr. officers after that the L/C will be transmitted from the telex room by getting the correct test number from the respective officer of the bank.

 V)  NOTIFICATION TO BUYER / SUPPLIER:

The garments factory has to inform the suppliers as well as the buyer with full details of BB L/C or a copy of BB L/C to be sent.

 03.  U/D [UTILIZATION DECLARATION] STAGE:

To make readymade garments & export the same it is pertinent to import the          

For raw materials, it is also necessary to obtain utilization permission from the customs authority, through BGMEA.

 PROCESS FOLLOWED TO ISSUE U/D:

(a)  BGMEA recommendation preparation, export L/C copy, BB L/C copy, proforma invoice, order details, and correct consumption to be submitted to BGMEA with a prayer

(b)  Per Dozen Taka to be deposited by “ Pay Order “ in favor of BGMEA                       

(c)   BGMEA will approve the recommendation

(d)  Approved recommendation to be submitted to custom Authority with bank endorsement, and photocopy of export L/C. BB L/C proforma invoice duly attested by bank & one certificate from the bank regarding BB L/C opening against respective export L/C.

(e)  Customs Authority will verify/inspect all the documents submitted by you with the bank ( if they feel ). They will put up office notes for issuing U/D & after being approved by the “ collector of custom “ they will issue U /D.

         

 04. IMPORT SHIPMENT FOLLOW-UP STAGE:

It is most important to communicate with the suppliers regarding the shipment of raw materials within the shipment validity of BB L/C or the fate of shipment for Raw Materials, shipping details are most important for making a smooth production Schedule.

 IMPORTED RAW MATERIALS CLEARANCE:

(A). If the Original import document is received from Bank then the Documents to be endorsed

From Bank, after acceptance of “ Bill of exchange “ by the drawee [ BB L/C Opener ].

 (B). If original documents are not received through the Bank channel, you can endorse the Copy documents from the bank against the letter of guarantee or indemnity. In that case after receipt of original documents “ Bill of Exchange “ is to be accepted by the drawee as per the undertaking submitted at the time of endorsement of the copy documents.

 (C). Endorsed documents to be sent to C& F Agent with the following documents for Clearance of the cargo.

•             Photocopy of export L/C attested by the bank.
•             BB L/C [ Origin ].
•             Original U/D.
•             LCA Form duly endorsed by the bank.
•             Insurance cover note.
•             Duty bond & Risk bond duly signed.
•             Proforma invoice duly attested by the bank.
•             Commercial invoice duly endorsed by the bank.
•             Packing list & detailed packing list.
•             B/L [ Original ] duly endorsed by the bank.
•             Bank forwarding letter.
•             Authorization letter of Custom board.

 

(D) CARGO CLEARANCE FOLLOW-UP:

For early clearance of the cargo from the port, the following information is to be collected from C & F agent or shipping agent, regarding the vessel position asunder.

a)      Estimated time of departure.
b)     Estimated time of Arrival.
c)     Berthing date.
d)     Unstuffing.

(E) CUSTOM FORMALITIES:

C & F agent will submit all necessary documents to customs for the board. Board will examine the documents & will approve the same

Customs Inspector will examine the goods, and whether the goods were imported as per L /C, proforma invoice, as per U / P & will check the shipment date of Export & import L / C.

After the inspection report, an assessment is to be done by the customs authority & thereafter, they will issue a delivery order.

C & F agent will deposit shipping agent dues to the shipping line to get the delivery order.

Showing the delivery order of the shipping line to the port authority, they will issue. Outpass an order for the cargo and the C & F agent will take delivery of the goods & will send the goods by transport to the factory.

 

05. EXPORT DOCUMENTS  STAGE:

Commercial the department will prepare the following export. All documents should be as per garments export L/C instructions.

 (A) PREPARE EXPORT DOCUMENTS  :

To negotiate the export documents with the Bank, the following documents are required :

1.            Bank forwarding duly fill up & signed
2.            Bill of exchange duly signed by the account holder.
3.            Commercial Invoice duly signed.
4.            Original B/L or F.C.R. or AWB or HAWB as per export L/C instruction.
5.            Packing List.
6.            Inspection Certificate.
7.            Beneficiary’s Statement.
8.            Certificate of origin / Country of origin issued by the metropolitan chamber of commerce.
9.            EXP. Duly passed by Customs authority.
10.          Any other’s documents required by Buyer, if they have been mentioned in the export L/C.   

Negotiation Bank will check the above documents whether it is as per L/C or not. If they find everything in order or as per export L/C, Bank will negotiate the documents & will disburse the generated fund as per Bank norms. If the negotiation Bank finds any discrepancies in the documents, they will send the documents on collection or they can negotiate under reserve by the request of the export or they can seek permission/negotiation authority from issuing Bank to allow them to negotiate the documents despite the discrepancies. L/C issuing the bank will inform the matter of the buyer. if the buyer accepts the discrepancies mentioned by Negotiating bank, the issuing bank will be authorized negotiate bank to negotiate the discrepant documents.

 

 (B) COLLECTION OF DOCUMENTS:

 Normally negotiating banks send the documents on collection for the following discrepancies :
 i)  Late Shipment.
 ii) Late presentation.
 iii) Unit Price differs between L/C & Commercial Invoice.
 iv) Over Draft.
 v) Any major discrepancy in the B/L.
 vi)  Consignee Name & Address differ between L/C & other documents.

 

 (C) REALIZATION OF EXPORT PROCEEDS :

Negotiation Bank will send the documents to issuing bank by courier within 3 days from the date of submission. The commercial section will follow up on the matter with the buyer & inform the buyer of courier No. & date for respective Invoice & will request the buyer to release the payment within 21 days from the date of dispatch of the documents.

 

 (D) B/B  L/C PAYMENT:

 Bills of  Back to Back L/C must be paid after the realization of the export proceeds against relative export L/C, without any delay to save the BB L/C overdue interest. Commercial officers will follow up on the matter & will request the bank to make BB L/C payment & will take the payment voucher.

 

 06. DAILY COMMUNICATING/CORRESPONDING:

A Commercial manager or Commercial officer must communicate every day with the following organizations for following the above-mentioned job & to get the job satisfactorily.

01. Buying Office.                         02. Bank.
03. EPB.                                         04. BGMEA.
05. Custom.                                    06. C & F Agent.
07. Transport Company.                 08. Shipping Lines.
09.  Supplier for fab & access,       10. Insurance Company.