The ICC Banking Commission conducted its final meeting of 2024 virtually via Teams on 20-21 November. Four separate portions of the event open to Banking Commission members and ICC National Committee representatives took place.
Bangladesh Bank’s Foreign Exchange Policy Department (FEPD) issued FE Circular No. 09 (17 May 2022) to its Authorized Dealer (AD) branches and central trade processing units to ensure screening of underlying import shipments through vessel/container tracking. This circular complements the previously issued FE Circular 07 (20 April 2022) which mandated such tracking for underlying export shipments.
Domestic regulations for Bangladeshi imports, irrespective of trade payment methods1, have mandatory requirements for underlying goods entering into Bangladesh. Compliance was earlier fulfilled through submission of a Bill of Entry from the customs authority for the related transaction. A Bill of Entry is basically a document issued by the customs authority evidencing entry of underlying goods into Bangladesh. Banks in Bangladesh have direct access to the system known as ASYCUDA (Automated System for Customs Data).
In the recent past, Bangladesh has made remarkable progress on its Trade Based Financial Crime Compliance (TBFCC) program. Improvement began with issuance of “Guidelines for Prevention of Trade Based Money Laundering” by the Bangladesh Financial Intelligence Unit (BFIU) in 2019. After conducting a series of training workshops, BFIU granted additional time for commercial banks to prepare their own guidelines based on each bank’s risk appetite. Following this period, BFIU, through Circular Letter No. 01/2021 dated 7 March 2021, mandated implementation of the Guidelines as of 30 June 2021. As per the directive, banks are advised to ensure they have infrastructure in place for effective implementation the Guidelines. This includes vessel tracking. TBFCC Guidelines require that all ADs in Bangladesh comply with the regulatory requirement for imported goods entering Bangladesh by conducting container or vessel tracking in addition to the traditional requirement of submission of a Bill of Entry.
Endnotes:
According to a 2020 research study conducted by the Bangladesh Institute of Bank Management (BIBM), the vast percentage of trade services offered by Bangladeshi banks are in the form of documentary credits (88%) followed by cash in advance (9%), documentary collections (2.5%) and open account (0.5%).
