I personally know BB was allowing imports by paying only 30% of the L/C money in advance and the remainder plus interest after the commodity arrives in the Port and the exporter's documents reach the importer's bank.
Now, BB will ask for the full L/C payment and the interest when the documents reach the company's bank. I think the new system was long overdue, and it is better late than never.
But, do you guys also know how some BD importers used this system to do fraud?
The importer X company would not go to the bank. It will not pay the remainder and take hold of the documents. After, say, 12 months, the port authority would call an auction for cars imported by the X, Y, and Z companies.
Now, who can participate in the auction? Those companies within the syndicate will participate because they have both muscle, political, and money power. Others dare not participate.
The X company's agent company would then buy up its vehicle(s) at a price much lower than it would have paid in duty and sales tax, etc. Quite a few bucks change hands between the companies and the Customs officials.
Are you guys surprised? I am not because I know many vehicles are sitting idle in the yards of the Mongla Port, Chittagong is too busy to handle them. This is how the govt was being frauded by these uncouth traders and many new PK Halders are born.
So, the 100% payment for the L/C opening is a very good step although late by 72 years. It would have been done just in 1947.
