Foreign Exchange Policy changes its guidelines; allows Shipping Agents to get higher Commission

Bangladesh Bank allowed shipping agents to charge a higher commission in the import of goods. However, the commission in the cases of export shipments is kept unchanged. The new commission will take effect from the 1st of April this year.

The foreign exchange Policy Department of the central bank issued a circular to bring a number of changes in the guidelines for Foreign Exchange Transactions 2018 relating to the shipping agent’s commission on 31st March. As per the circular, the shipping agents will charge at least 5% as commission on the total transport charge against imports on cost or fright or similar terms. The commission rate has been fixed in two phases at the rate of 5% and 2.5% instead of the previous 2% in general. However, in the case of the export, the Commission rate will remain the same as before.

In the case of export, if the shipping fee is added to the price of the products( export on CFR), then the exporter has to pay the ship rent, so the foreign currency leaves the country, that’s why the rate has been fixed less to 2.5%. Similarly, the opposite mode occurs in terms of imports. If the shipping fee is added to the product in case of import, then the seller has to rent the ships, that’s why the commission rate is fixed high to 5%.

On the other hand, if the price of the products and fare of the ship is separate (export on FOB), the commission rate, in this case, is higher by 5% because there remains a chance of bargaining in this case. In these cases, buyers mostly bear the shipping cost. That is why the rate is fixed high. Again, if the price of the products and the fare of the ship is separate in terms of imports (import on FOB), then the importer has to pay the transportation cost and currency goes out. To discourage this practice and promote the growth of the economy, the government has lowered its rate to 2.5%. KM Mahmudur Rahman, Former Chairman of Bangladesh shipping Agents’ Association told New Age that the newly set agency commission for import shipments would bring prosperity for them. An official of the central bank proclaimed that the customization of the guidelines would save the foreign currency of Bangladesh.

Source: Business Outlook

 

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