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Bangladesh import volumes continue to rise

16/12/2016

In the ICC Global Trade Survey 2016, it was reported that in 2015 Bangladesh had seen the highest growth in MT700's sent (Issue of a Documentary Credit) at 12.84% when compared with 2014.

This trend seems to have continued into 2016 with the following report that appeared in the Financial Express, Bangladesh on 14 December 2016.

"Bangladesh's imports surged about 15 percent to 15.14 billion U.S. dollars in the first four months of the 2016-17 fiscal year (July 2016-June 2017), a central bank official said Wednesday.

The Bangladesh Bank (BB) official said the settlement of letters of credit (LCs), generally known as actual imports, stood at 15,140.56 million U.S. dollars in July-October period of the current fiscal year compared to 13,194.56 million U.S. dollars in the same period a year earlier.

Overall import orders, officially known as fresh opening of import letters of credit (LCs), also rose 14.45 percent in July-October period of the current fiscal year, he said quoting provisional BB data.

The central bank official who preferred to be unnamed said the overall import orders increased to 14,891.59 million U.S. dollars in July-October period this year against 13,011.31 million U.S. dollars in the same period of the last 2015-16 fiscal year (July 2015-June 2016)."


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We, as the issuing bank, requested the below document, under field 46A. “Insurance policy/certificate for 10.00 percent above CIF value payable to the order of Sampath bank PLC, covering institute cargo clauses (a), institute war clauses (cargo), institute strike clauses (cargo), transshipment risks marked premium paid claims payable in Colombo irrespective of percentage.” Insurance certificate is presented containing below wording on the face side of the document. “The settlement of loss and damage will be effected, unless otherwise provided, through the intermediary of Marsh SA/NV to whom all documents are to be forwarded for this purpose, and will collect the indemnity under deduction of a commission of one percent” Also, it indicates the LC conditions as a mirror image as follows under the heading of "letter of credit conditions" whereas insurance conditions are incorporated separately in the certificate: "covering institute cargo clauses (A), institute war clauses (cargo), institute strike clauses (cargo), transshipment risks marked premium paid claims payable in Colombo irrespective of percentage" Having considered the above clauses, we have quoted below discrepancies. 1) Insurance policy indicates a deductible of 1 pct instead of irrespective of percentage. 2) Insurance not marked premium paid Beneficiary’s bank disagrees with our discrepancy and raised below argument: “Insurance policy/certificate does not indicate a deductible of 1 pct irrespective of percentage on the face of the document and banks will not examine terms and condition in insurance document as per ISBP paragraph K22 and marked as premium paid under the LC conditions. Considering above, may we have your opinion on the discrepancy quoted by us and the counter argument raised by the beneficiary’s bank.