Bangladesh draft pol­icy to reg­is­ter ap­parel buy­ing houses

Apparel Online - - Beyond India -

Bangladesh Govern­ment is mov­ing to bring dis­ci­pline and ac­count­abil­ity in the line of ap­parel buy­ing houses. Min­istry of Com­merce has pre­pared a draft pol­icy which has been for­warded to all stake­hold­ers to shed light on its pro­pos­als. Ap­parel Online has ob­tained in­sights into the con­tents of the draft pol­icy.

The pol­icy en­ti­tles all buy­ing houses to reg­is­ter with the

Ex­port Pro­mo­tion Bureau (EPB). With­out regis­tra­tion, no house will be able to han­dover Let­ter of Credit (LC) from buy­ers to manufacturers. No­tably, there are over 1,000 ap­parel buy­ing houses in Bangladesh, about 400 of which are un­der a struc­tural body Bangladesh Gar­ment Buy­ing House As­so­ci­a­tion (BGBA). These houses ob­tain or­ders from buy­ers abroad, source from lo­cal manufacturers and then de­liver to those ap­parel buy­ers. Up un­til now, these buy­ing houses have been op­er­at­ing with­out a le­gal frame­work and over­sight – which came to light rather badly when Bangladesh’s ap­parel in­dus­try suf­fered a US $ 72,000 set­back, the largest in his­tory, last year due to fake or­ders from a non-ex­is­tent over­seas source. “We wel­come the Govern­ment’s move,” said

Md An­war Shahid, Vice President of BGBA to AO, adding, “This will be good for those who want to be gen­uinely in­volved in the buy­ing house business. In fact, we have been push­ing the Govern­ment for quite some time for this.” Shahid is also the Manag­ing Direc­tor of Shimex In­ter­na­tional Ltd., a buy­ing house.

Fur­ther, AO has learnt that the draft pol­icy would en­ti­tle both buy­ing houses and ap­parel manufacturers to en­ter into a con­tract be­fore fi­nal­is­ing on a business deal. Copies of the draft con­tracts would then have to be en­dorsed by their re­spec­tive or­ga­ni­za­tions. Buy­ing houses in the coun­try would then have to re­main trans­par­ent in de­ter­min­ing prices while ne­go­ti­at­ing be­tween gar­ment buy­ers and ex­porters.

Af­ter hand­ing over the let­ters of cred­its to ex­porters on be­half of buy­ers, the buy­ing houses will have to con­tinue to carry out its re­spon­si­bil­i­ties un­til the pay­ment is de­liv­ered to the ex­porters. As per the draft, buy­ing houses or buy­ing agents will have to send state­ments of or­der place­ment of gar­ments ex­port to the BGBA ev­ery three months. In turn, the trade as­so­ci­a­tion will have to send at­tested copies of the state­ments to Bangladesh Bank and EPB. Ad­di­tion­ally, there will be a panel to mon­i­tor and su­per­vise the ac­tiv­i­ties of the reg­is­tered buy­ing houses. It will in­form the Min­istry of Com­merce in case of any dis­crep­ancy in fol­low­ing the reg­u­la­tions. It will also rec­om­mend nec­es­sary ac­tions that need to be taken against a vi­o­la­tor.

“Our aim is to ex­pand our ap­parel ex­port mar­ket by cre­at­ing a good rep­u­ta­tion. Un­til now, there has been no pol­icy for the ap­parel buy­ing houses, and these houses have been op­er­at­ing with­out su­per­vi­sion,” Ab­dur Rahim Khan, Deputy Chief, Tex­tile Cell, Min­istry of Com­merce, told me­dia.

Buy­ing houses or buy­ing agents will have to send state­ments of or­der place­ment of gar­ments ex­port to the BGBA ev­ery three months. In turn, the trade as­so­ci­a­tion will have to send at­tested copies of the state­ments to Bangladesh Bank and EPB.

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