The impact of the global economic crisis due to Covid and Ukraine war has also affected Bangladesh, although initiatives have been taken to control the import of unnecessary and luxury goods but there has been a record in the import of cars.
In the last fiscal year (2021-22), 6799 more cars were imported than the previous fiscal year. Total car imports also hit a five-year record in last fiscal.
According to the sources, a record number of cars were imported in the country in the fiscal year 2021-22 without taking into consideration the rules and regulations of the government.
Meanwhile, the traders are bringing cars without LC due to the control of LC for luxury goods. As a result, complications have arisen regarding how the cost of importation of cars without LC will be paid and how Chattogram Customs will tax them.
According to the sources of Bangladesh Bank, the banking sector regulatory body has reined in the import of goods on April 11, 2022 to deal with inflation, keep the dollar market stable and prevent the decline of foreign exchange reserves.
Later, on July 4, Bangladesh Bank ordered to preserve LC's 100 per cent cash margin for imports of motor cars (sedan cars, SUVs, MPVs), electrical and electronics home appliances, gold and gold ornaments, precious metals, pearls and ready-made garments in order to keep the country's currency and credit management more integrated. But in spite of such strictness, the car import recorded in the financial year 2021-22.
In the fiscal year 2021-22, about 34,721 cars were imported into the country. Out of this, 20, 808 cars were imported through Mongla port. 13, 913 cars were imported through Chattogram Port during the same period, which is the highest in the last five years. Those concerned said that the reserve crisis may increase as the import of luxury cars increases despite the dollar crisis.
Meanwhile, in the fiscal year 2020-21, 27,922 cars were imported into the country. Out of this 14,474 vehicles came through Mongla port. 13,448 cars were imported through Chattogram port.
In the fiscal year 2019-20, 17,093 vehicles arrived in the country, out of which 4, 800 and 12 thousand 293 vehicles came through Chattogram port and Mongla port respectively.
Car imports continue in FY 2022-23 as well. As car prices in Japan fell due to the global crisis, importers are importing cars without regard to regulations. However, entrepreneurs are facing difficulties in importing daily necessities.
According to NBR, 650 cars were imported without LC in the month of November only in the fiscal year 2022-23. Importers HNS Automobiles, Maryam Enterprises, GM Trading, SSRA Enterprises and Nagoya Corporation imported 934 vehicles on November 10 and 22 by vessels Lotus Leader and Malaysia Star.
Out of these imported vehicles, 585 were imported through consignment. 284 have been done as per import-export policy, remaining 301 consignments do not have LC. Against these 301 shipments, 650 vehicles have arrived. Now complications have arisen with the tolling process of vehicle shipment without LC. Currently LC and non-LC cars are in Chattogram car shed.
Import Policy Order According to the Import-Export Act, 1950, any product to be imported from abroad shall be imported by opening LC or letter of credit with an authorized commercial bank properly mentioning the Product Identification Code (HS).
According to the Import General Manifesto (IGM), the goods are shipped from the exporter's country and unloaded at the importer's port if the goods description is correct. In the case of all types of imports, the 'Country of Origin' must be clearly mentioned on the product, product packaging and container. But due process was not followed in case of 650 vehicles.
Those concerned said, even before in some cases, cars were imported without LC, as there was no dollar crisis, no complications were caused by doing LC even after the goods reached the port. In most of the cases, the importers have cleared the vehicle by completing the LC in the way of importation of the vehicle.
But this time due to the dollar crisis, even though the car import was completed, it was not possible to do the LC, which caused complications. Importers of vehicles without LCs are said to be trying to open LCs.
According to NBR sources, Shahidul Islam, owner of the car importing company HNS Automobiles, imported most of the imported cars without LC. Among the 934 cars imported on 10 and 22 of November, 25 reconditioned cars came in the name of his company.
19, 12, 10 and 10 vehicles have arrived in the name of Maryam Enterprises, GM Trading, MSRA Enterprises and Nagoya Corporation respectively. Apart from these 76 cars, the rest of the cars came in the names of different companies.
An official of NBR, who did not want to be named, said that even if the vehicles come without LC, there is no chance of illegal payment. Because, even if the money is paid through hundi the importers will not get any valid documents to release the vehicles. No importer shall import vehicles through this loss.
He said cars without LCs seem to have been imported in the hope of higher profits as car prices fell due to the global recession.
Dr. Khandaker Golam Moazzem, research director Centre for Policy Dialogue (CPD) said, “There is now a dollar crisis in the country. Keeping this in mind, some unnecessary or less necessary import control measures should be taken as a temporary measure. It should be for the purpose of creating an import alternative market.”
