Bangladesh Garment Export Process: Documentation, Compliance & Trade Terms Explained
Garment export plays a pivotal role in Bangladesh’s economy, contributing more than 80% of total export earnings. For exporters, a sound understanding of procedural, legal, and financial frameworks is essential to operate efficiently in global trade. This guide offers an in-depth overview of the export procedure of garments from Bangladesh, covering instruments, documentation, international trade terms, rules of origin, and financial settlements.
A) Export Instruments and Their Types
Export instruments refer to the tools, documents, and methods used in the execution and monitoring of export transactions. Below are the critical components:
1. Ex-Factory Date
2. On-Board Date
3. Document Submission Procedure
Proper documentation ensures smooth customs clearance and payment realization. Key documents include:
Commercial Invoice
Export Permit / EXP (explained below)
Bill of Lading / Air Waybill
Certificate of Origin (if required)
GSP / REX form (for duty-free market access in EU)
Timeline:
Post-shipment, documents are submitted to the bank under the Letter of Credit (L/C) or collection arrangement.
The bank then sends documents to the importer’s bank to facilitate payment.
4. Role of EXP (Export Form)
5. Bill of Lading (BL)
There are three main types:
Original BL – negotiable; required for document release at the destination.
Seaway BL – non-negotiable; faster processing.
House BL – issued by freight forwarders, often for consolidation shipments.
B) Rules of Origin (RoO) Applicable for Bangladesh
Rules of Origin determine the eligibility of garments for duty-free or preferential treatment under Free Trade Agreements (FTAs) or trade schemes.
Key Aspects for Bangladesh:
Bangladesh enjoys preferential market access under:
EU GSP (EBA Scheme)
UK Developing Countries Trading Scheme (DCTS)
Canada GSP
To qualify, garments must be manufactured from regionally sourced raw materials or meet minimum local value addition (typically 30%-40%).
Certification:
Certificate of Origin issued by EPB (Export Promotion Bureau).
REX (Registered Exporter) certification used for EU countries.
C) Proceed Repatriation
Definition:
Repatriation of export proceeds means bringing back foreign currency earned from exports into the local banking system of Bangladesh.
Process:
Exporter ships goods and submits documents to their bank.
Upon acceptance of documents by buyer’s bank, the payment is remitted.
Foreign currency is converted into local currency (BDT) and credited to the exporter’s account.
As per Bangladesh Bank regulation, proceeds must be repatriated within 120 days from the date of shipment.
D) Export Under Open Account
Open Account Export refers to shipping goods before payment is received, where the buyer promises to pay at a later date (typically 30/60/90 days).
Pros:
Builds trust with long-term buyers.
Reduces paperwork and banking costs.
Risks:
Higher risk of default/non-payment.
Exporters should insure against buyer insolvency using credit insurance or seek bank guarantee.
Usage in Bangladesh:
Gaining traction in trade with reliable buyers.
Not advisable for high-risk countries or new clients.
E) Inco Terms and Their Relevance
Incoterms (International Commercial Terms) define the responsibilities of buyers and sellers in international trade.
Common Incoterms Used in Garment Export:
| Term | Meaning | Seller’s Responsibility | Buyer’s Responsibility |
|---|---|---|---|
| FOB (Free on Board) | Seller delivers goods onboard vessel at port of shipment | Cost of goods, local transport, export clearance | Ocean freight, insurance, import duty |
| CPT (Carriage Paid To) | Seller pays freight to named destination | Cost of goods, main transport, export formalities | Import clearance, local delivery |
| FCA (Free Carrier) | Seller delivers goods to a carrier at a named place | Goods and export clearance | All costs from carrier onward |
Note: Use of appropriate Incoterms ensures legal clarity and avoids disputes.
Conclusion
Understanding the export procedure is essential for sustainable and profitable garment trade. Exporters must stay updated with documentary compliance, currency regulations, and buyer payment terms. Bangladesh’s position as a major garment exporter continues to strengthen with evolving global trade policies, and mastering these export procedures ensures smooth business operations and financial security.
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