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Bangladesh to Allow Foreign Factories to Import Raw Materials Duty Free

The Bangladesh government announced it will provide utilization declaration (UD) certificates to foreign-owned garment factories, allowing them to import raw materials without paying duties. However, officials said there are three conditions.

According to the Financial Express, to attain a UD certificate, the readymade garment facilities must follow the country’s wage structure, only export goods to the countries where the investment was made, and remain outside the export processing zones.

This decision was made at a recent inter-ministerial meeting at the Ministry of Commerce with its Senior Secretary Hedayetullah Al Mamoon.

Foreign-owned factories will also be given memberships for the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). The Export Promotion Bureau (EPB) will issue the UD certificates to them, provided they abide by the conditions.

Last December, leaders of BGMEA and BKMEA had a meeting with EPB and agreed to give memberships to factories established before Oct. 15, 2014, the Financial Express reported.

Members at the meeting also established that the factories will only be able to produce and export fashion items to non-traditional or new markets, such as Russia, Brazil, China, South Africa, India, Australia and Mexico.