WT/TPR/S/168/Rev.1 Trade Policy Review 
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III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) INTRODUCTION  
1. Since its previous Trade Policy Review in 2000, Bangladesh has pursued trade liberalizing 
reforms in order to reduce policy-induced anti-export bias and improve competitiveness.1   
2. The progressive dismantling of non-tariff barriers has made the customs tariff Bangladesh's 
main trade policy instrument.  The tariff is also  the second most important source of tax revenue, 
accounting for more than a fourth of the total.  Virtually all tariffs are ad valorem .  The average 
applied MFN tariff has been lowered from 22.2% in 1999/00 to 15.5% (2005/06);  the average rate for 
agricultural products continues to be higher than th at for industrial imports, and tariff escalation, an 
industrial policy objective, remains pronounced.  Tariff dispersion was lowered by simplifying the 
structure to four tiers;  about 58% of tariff lines are cu rrently in the range of zero to 13%.  Peak tariff 
rates on a wide range of import-competing/sensitiv e items were cut from 37.5% to 25%.  The limited 
coverage of tariff bindings (15% of the tariff lines) and a gap of up to 149 percentage points between 
the average bound and applied MFN tariff rates still im part a strong degree of unpredictability to the 
tariff regime and provide a great deal of scope fo r the authorities to raise applied rates within the 
bindings;  for instance, in 2005/06 applied MFN rates were raised on more than 40 eight-digit 
sensitive items (e.g. fish, iron, textile items, motor vehicles).  The extent of tariff concessions for 
imports of capital machinery and equipment as well as end-use inputs and parts, adds to the complexity and opacity of the tariff. 
3. Although protection involving other border levies and charges (exceeding the WTO bound 
level of 2.5%) and, in some instances, the discrim inatory application/nature of internal taxes was 
modified (including rate changes and suppression of  the letter of credit authorization fee), such 
measures may still raise average nominal protection by almost half. 
4. Bangladesh has implemented the WTO Agreement on Customs Valuation since 
February 2000.  By early 2006, the EC's relaxed regional cumulation (rules of origin) criteria for 
items eligible for GSP/preferential treatment ha d not yet been endorsed.  A ban on imports of 
yarn/textiles entering over land from India was in place in 2002-05.  Certain customs services have 
undergone significant reforms, including:  migration to ASYCUDA++, the setting of mandatory PSI requirements (1% of service charge on the c.i.f. va lue of imported goods born by the importers), and 
establishment of red and yellow channels.   
5. In line with pledges in the WTO Committee on Balance-of-Payments Restrictions, additional 
protection at the border, by means of import bans (now on live poultry and eggs only) or restrictions, 
was more than halved (from 9.8% to 3.3% of all tariff lines as of mid-2005) by liberalizing imports of, 
inter alia,  several textiles and clothing items and minimizing the number of measures taken for trade 
reasons.  Transparency in import licensing proce dures/requirements was improved through the first 
submission of replies to the relevant WTO questi onnaire in 2005.  No contingency measures were 
taken during the period under review. 
6. Despite efforts to simplify export clearance requirements, permission is required for each 
export shipment.  Exports of certain items (e.g. wheat, onions, unprocessed shrimps, raw hides, and 
                                                     
 
1 Nevertheless, according to a 2 005 World Bank study,  in early 2004, Bangla desh had the most 
protected economy in South Asia and was one of the top protectionist countries, ranking 5th among 
134 developing countries when all products are considered.  Large volumes of illegal imports from India – 
induced to a large extent by Bangladesh's high protection levels – as well as smuggling through official channels by way of under-invoicing and other mis-declarations reduce the scope for price increases (World Bank, 2005b). Bangladesh WT/TPR/S/168/Rev.1 
 Page 37 
 
 
blue leather) remain prohibited, to ensure ade quate domestic supply;  and exports of fertilizer 
produced by a state-owned plant also remain restri cted.  Such restrictions constitute an implicit 
subsidy to the downstream processing of the items affected. 
7. An array of measures, including concessional ta riffs, a duty drawback system, special bonded 
warehouses, and export processing zones (EPZs) continue  to mitigate the adverse impact of tariffs, 
other border charges, and restrictions on the competitiveness of import-dependent exporters.  
Governance and efficiency problems in administering customs clearance and tax concession schemes continue to add to import costs and reduce the level of  the nominal rate of drawback.  Direct subsidies 
(cash assistance) to exporters of certain items (incl uding fruit, vegetables, textiles, and clothing), soft 
loans for export finance purposes, a currency rete ntion scheme, and a 50% tax relief on income 
generated by any export business are also availa ble.  Some of these measures embody local-content 
requirements not yet notified the WTO.  As a result, the import and export regime remains complex. 
8. Support to both domestic production and trade continues through open-ended tax incentives 
(tax holidays), interest rate subsidies (for agricu lture, and small and cottage  industries), accelerated 
depreciation, and cross-subsidized utilities tariffs.  Direct subsidies are available for fertilizer imports 
and electricity bills for irrigation.  Product divers ification efforts (mainly for export production) are 
deployed for the development of high priority and special development sectors;  support to "thrust" 
sectors is, inter alia,  based on import substitution considerations.   
9. State involvement in the economy has remained  prominent with inefficient/loss-making state-
owned enterprises operating in several trade and trade/ related areas (e.g. jute, textiles, sugar, food, 
chemicals, steel engineering, oil, gas, minerals , power, banking, water and sewage, telecoms).  In 
2003 and 2004, the regulatory, procedural, and in stitutional framework for government procurement 
was revised;  local bidders may now be granted pr ice preferences of 15% (goods) or 7.5% (public 
works). 
10. Bangladesh has sought to strengthen intellectual property rights (IPR) protection by passing 
TRIPS-related legislation on copyrights;  further cha nges were expected in trade marks, patents, and 
remaining copyright legislation.  Institutional and ot her constraints have contin ued to impede effective 
enforcement of the existing legislation.   
11. While the preparation of a consumer protec tion law was under way in 2005, no progress has 
been made on the competition policy framework. 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Registration and documentation 
12. All importers, exporters  and "indentors" (e.g. firms, institutions, bodies, organizations, 
persons or group of persons) must be members of  a recognized Chamber of Commerce and Industry 
and a Bangladeshi "organization" representing their own trade.2 
13. Importers remain classified into private sector  and public sector importers;  private sector 
importers are further classified into industrial consumers and commercial importers.  Industrial 
consumers are units registered with one of the four sponsoring agencies:  the Bangladesh Export 
Processing Zones Authority (BEPZA), for industrie s located in EPZs;  the Bangladesh Small and 
Cottage Industries Corporation (BSCIC), for the sm all and cottage industries;  the Handloom Board, 
for handloom industries run by weavers' associations ;  and the Board of Investment (BOI), for all 
                                                      
2 Import Policy Order 2003-2006, para. 29(1). WT/TPR/S/168/Rev.1 Trade Policy Review 
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other private industries (section (4)(i)).  Commerc ial importers are those who import goods for sale 
without further processing.  Public sector impor ters include government organizations, statutory 
bodies, state-owned corporations, universities, resear ch institutions, and industrial enterprises in the 
public sector. 
14. All industrial consumers (except enterprises lo cated in EPZs) and commercial importers must 
register with the Chief Controller of Imports and Exports (CCIE) (in the Ministry of Commerce), who issues an import registration certificate (IRC).
3  The IRC specifies the ceiling value for each product 
that an industrial user may import each year, including items on the restricted list for imports.  Commercial importers are free to import any quantity of non-restricted items.  An IRC is generally 
issued within ten (previously 15) days of recei pt of the application.  The objective of import 
entitlement is to monitor imports of raw materials a nd machinery, most of which enter Bangladesh at 
concessional duty rates (section (2)(iv)(h)).
4  For a one-off production increase, regular industrial 
consumers may import up to three times the value of their regular entitlement for items banned for 
commercial purpose but importable by industrial consumers only;  indus trial consumers with an ad 
hoc IRC may import restricted items up to 100%  of their half-yearly import entitlement as 
recommended by the sponsoring authority.5  
15. In general, importers are allo wed to import with a letter of credit authorization (LCA) form6, 
the authorization form for the opening of an irre vocable letter of credit (L/C).  There are minor 
documentation requirements for public-sector import ers.  Other documents required for imports 
include a bill of lading or airway bill, commercial invoice or packing list, and certificate of origin.  In 
certain instances, additional certificates and/or im port permits related to health, security or other 
matters may be required by the relevant govern ment agencies for imports of restricted items 
(section (2)(vi) and (2)(vii)). 
16. Import against an LCA form may be allowed wi thout opening an L/C for:  (i) import of 
books, journals, magazines, and periodicals;  (ii) any permissible item for an amount not exceeding 
US$25,000 during each financial year against rem ittance made from Bangladesh;  (iii) import under 
commodity aid, grant or such other loans for wh ich there are specific procurement procedures for 
imports of goods without opening an L/C;  and (iv) import of "int ernational chemi cal references" 
through bank drafts by recognized pharmaceutical (allopathic) firms on the approval of the Director, 
Drug Administration, for the purpose of quality control of their products.7  Moreover, an L/C is not 
required for imports of perishable goods va lued between US$10,000 and US$15,000 (Tecknaf 
Customs Station) or between US$5,000 and US$7,500 (other land routes) per consignment, or for 
capital machinery and raw materials for industrial use.8 
                                                      
3 Individuals or institutions that are not registered importers may import up to US$5,000 for their own 
use without permission;  for imports exceeding US$5,000, prior permission is required from the regional import 
control authority and the CCIE.  An IRC is not required for public sector importers. 
4 WTO (2000). 
5 Import Policy Order 2003-2006, para. 23(1). 
6 Along with the LCA form, importers must submit a number of documents to the executing bank, 
including an L/C application form, an invoice, and an insurance cover note.  In addition, private sector importers must submit a membership certificate from the regist ered chamber of commerce and industry or any trade 
association;  proof of IRC renewal payment;  a declaration of income-tax;  Tax Identification Number;  and any 
other documents required by the Import Policy Order or other Public Notice.  Public sector importers are required to submit an attested photocopy of the allocation letter issued by the administrative ministry, division 
or authority. 
7 Import Policy Order 2003-2006, para. 7(4). 
8 Import Policy Order 2003-2006, para. 7(3). Bangladesh WT/TPR/S/168/Rev.1 
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(ii) Customs valuation and inspection  
(a) Customs valuation 
17. Bangladesh adopted the WTO Agreement on Cu stoms Valuation in February 2000, as 
scheduled9;  Section 25 of the Customs Act, 1969 was amended to reflect this change.10  Since then 
the tariff value regime (i.e. minimum import prices) has been virtually phased out.11  At present, only 
petroleum products (both crude and refined) are ass essed at tariff values;  under the current import 
policy, these products may be imported only by the Government. 
(b) Preshipment inspection 
18. Since 15 February 2000, a mandatory (previously voluntary) PSI system, involving physical 
inspection and price comparison of goods, has been in  place to help reduce the discretionary power of 
customs officials, lower costs, and improve efficiency at Bangladesh's trade entry points.12  
Bangladesh reappointed four PSI  agencies in September 2005 (ITS, BIVAC, COTECNA, and SGS) 
to inspect import consignments.  They operate in  five blocs, awarded after a competitive bidding 
process, divided geographically on the basis of trade volume.  A PSI company's Clean Report of Findings (CRF) provides information on quality, quan tity, HS classification and transaction value.  
The agencies are also required to examine the impor t conditions for restricted (SPS measures, etc.) or 
banned items, as stipulated in the Import Policy Or der, and report on whether the criteria have been 
fulfilled.  The value certified by the agencies shoul d reflect the actual transaction value in accordance 
with WTO Customs Valuation Agreement.  Importers  are charged 1%, on a c.i.f. basis, towards 
payment for these services;  the Customs Authorities collect this charge along with the duties and 
taxes payable (calculated automatically  under ASYCUDA++ in Assessment Notice). 
19. The floor c.i.f. values set for PSI are:  US$500 for life saving drugs;  US$100 for advertising 
material/gift items;  US$500 for machinery spares and parts by an industrial concern;  and US$200 for 
items for which payments are made abroad.  The following goods are exempt from preshipment inspection:  duty-free goods and goods imported by government, semi-government, public sector 
corporations or autonomous organi zations;  certain specified capital machinery;  goods imported by 
export-oriented industries under bonded warehouse facilities;  books, periodicals, and newspapers;  
and commercial samples. 
20. The authorities indicate that there have been allegations of misconduct (under-invoicing, 
quality and quantity not properly reported etc.) by PSI  agencies, and substantial penalties have been 
imposed by the customs authorities on several occasions.  A PSI aud it agency is to be operational 
soon. 
                                                     
 
9 In May 1995, Bangladesh notified the WTO, of its decision to delay application of the provisions of 
WTO Agreement on Customs Valuation. 
10 Notification No. 57-Law/2000/1821/Customs, 23 February 2000. 
11 The previous valuation regime, Section 25(7) of the Act empowered the Government to fix tariff 
values for the purpose of levying customs duty for a number of imported products;  that is, wherever tariff 
values are available, they replace the lo wer invoiced price.  At the time of  the previous Review of Bangladesh, 
in 2000, the tariff value schedule included 977 tariff lines  at the eight-digit HS level, accounting for 15.0% of 
total tariff lines.   
12 More information on past use of the PSI regime is available in WTO (2000);  USTC (2003);  and 
UNESCAP (2004). WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 40 
 
 
(iii) Customs clearance and administration 
21. Bangladesh maintains a self-assessment and a ra pid clearance procedure.  The self-assessment 
procedure (since 1997/98 budget) allows for quick clear ance for imports of food grain, edible oil, 
petroleum oil and lubricant, cement, cotton, sugar, ne ws print, etc.;  and imports by the public sector.  
At the time of the previous Review, the aut horities intended to extend the coverage of the 
self-assessment procedure graduall y to other imports;  no informa tion on recent developments was 
available from the authorities.  Under the rapid clearance procedure (since 1998/99 budget), certain categories of imports of food grain, edible oil, and disaster relief materials by selected groups of importers, and all imports of raw materials and capital machinery by 100% export-oriented enterprises 
are released without physical examinati on, once customs assessment is complete.
13  Moreover, 90% of 
general commercial imports (imported under PSI regime) are assessed on the basis of the CRF (with no physical inspection required);  51% of total imports benefit from rapid clearance facilities. 
22. Disputes relating to all customs matters are deal t with as provided for in the Customs Act.  
The National Board of Revenue is empowered to i ssue rulings as and when such disputes are referred 
to, either by the local customs-station authorities or  the traders.  Appeals are addressed or settled at 
the Office of the Commissioner (Appeal) and Appella te Tribunal.  Provisions are available for the 
representation of the business chambers and judiciar y.  Despite provision in the Import Policy Order 
in force, the Local Import Trade Control (IT C) Committee, comprising the CCIE, NBR, and 
Federation of Bangladesh Cham ber of Commerce and Industry
14, is no longer functional because 
importers "feel more comfortable" referring their di sputes to the High Court rather than following the 
procedures with Customs as provided for under the Act. 
23. During the period under review, certain custom s services have undergone significant change, 
including the:  migration to ASYCUDA++ (2003)15, introduction of a direct traders' input system 
(from 2003 to 2004)16, mandatory PSI for a wide range of non-government imports 
(section (2)(ii)(b)), and red and yellow (but not green)17 channels in Chittagong, Dhaka Inland 
Container Depot (ICD) and Benapole.  The author ities indicate that the DTI system has helped 
significantly in reducing the customs processing time a nd incidence of error at data entry level by the 
Customs operators.  Work is under way to brin g all imports under DTI (short term) and introduce 
remote DTI, enabling the traders to enter declarations from their own offices using web technology.  
The procedure for clearing temporary imports of fibr e and fabric and exports of fabric and garments 
was greatly simplified;  the number of steps were reduced from 25 to 14.  The greatest success seems 
to be in the clearance of exports and temporary imports at the ports, airports, and Dhaka Customs 
facilities.  All Customs Statutory Regulatory Orders  (SROs) were compiled in a single publication for 
ready reference. 
                                                      
13 Selected importers include the Ministry of Food , edible-oil refineries, n on-profit-making charitable 
organizations, and NGOs. 
14 Import Policy Order 2003-2006, para. 28. 
15 The current ASYCUDA++ system was upgraded  under the UNCTAD-led technical assistance 
project.  UNCTAD/ASYCUDA online information.  Ava ilable at:  http://www.asycu da.org/dispcountry.asp? 
name=Bangladesh [7 June 2005]. 
16 The DTI system is operated at Dhaka Custom House, Chittagong Custom House, and Dhaka ICD for 
all exports and imports of the ready-made garments (RMG) sector.  It enables traders to enter their declarations 
into the system through their C&F (clearing and forwar ding) agent's office at any time of the day.  The 
declarations are then opened by the customs appraisers  during office hours and system-generated registration 
numbers (entry number) are allocated for assessment purposes.  
17 By January 2006, the NBR had initiated the proce ss for introducing the green channel facilities for 
selected importers.  Trade bodies/associations had been  requested to furnish the names of businessmen with 
clean track records.  Once th e NBR receives such a list, it will review and scrutinize the names, and cross-check 
them with its records, before launching the system formally.  Bangladesh WT/TPR/S/168/Rev.1 
 Page 41 
 
 
24. According to the NBR18, customs assessment for imported consignments generally takes one 
working day from submission of declarations along with all relevant documents.  Clearance from 
ports requires certain formalities with shipping agents , freight forwarders, Port Authority, and banks, 
which can take from one day to a number of days because importers must settle their liabilities with 
the banks (for bank endorsed transport documents) prio r to delivery of the goods.  According to the 
authorities, the number of signatures required for customs purposes is now less than ten (49 to 51 at the time of the previous Review).  Consignments  selected for physical examination (10% of total 
CRFs under PSI
19, and consignments selected on the basis of  intelligence information, which is, on 
average, less than 1% of total declarations received) may take 3-4 days, depending on the cooperation 
extended by the importers and/or their agents.  The efficiency and readiness of agents also affects the 
clearance time;  instances of significant delay seem to  be due to unresolved disputes regarding unpaid 
commission/charges between the importers and their agents.  Unreasonable customs-related delays for 
imports and exports seem to be due only to incomplete documentation.20 
25. According to a World Bank survey, the total co st of unofficial charges (bribes and related 
costs) for certain transactions amount to 12% of th e total port-related charges, exclusive of duty and 
taxes (bribes).21  Minimum informal/speed payments (to get shipments through the system in a 
reasonable amount of time) at the Cu stoms are estimated in the range of Tk 2,000 per container and at 
the port such payments amount to about Tk 1,000 per container.  Informal payments to Customs seem 
to be set according to the value of  the cargo and are collected through the implicit threat of inspection 
and their discretionary power to identify discrepanci es.  Customs officials are under pressure to meet 
monthly revenue targets prescribed by the NBR. 22 
26. A large agenda for customs modernization remains unmet23;  in February 2006, the NBR 
clarified that automation work for improving effi ciency and curbing corruption was yet to be 
completed.  According to the World Bank survey , ASYCUDA-based systems for channel selectivity 
and/or risk management could reduce inspections, and DTI systems could be used to further reduce 
the number of signatures required.24  Reforms and computerization coul d be extended to road and rail 
border crossings and reduce delays and associated cost s at these points, particularly those relating to 
trucking both Indian and Bangladeshi goods throug h the Benapole border crossing (now operating 
                                                      
18 The NBR distinguishes between delays due to customs procedures, port handling, and customs 
agents processing.  
19 Although NBR claims that 95% of PSIs are good and no further inspection should be required, 
Customs reviews nearly all PSIs, and often orders re-inspections, even when a CRF has been filed .  World Bank 
(2005b). 
20 The authorities indicate that there had been no instances in recent years of delays due to 'customs 
harassment'.  Since the introduction of ASYCUDA++, th e assessment status can be tracked easily through the 
system by superior officers, thus the propensity for the lower level officers to harass importers/exporters has 
fallen drastically.   
21 World Bank (2005b). 
22 In February 2006, the NBR indicated to the WTO Secretariat that the methodology adopted in the 
World Bank survey was not known to them.  Although World Bank reports had, by and large, an objective 
analysis, the NBR had no knowledge of being consulted, e ither officially or unofficially, while this survey was 
being prepared.  However, the NBR ackn owledged that there were allegations  of malpractices by a section of 
customs officers, like elsewhere in the world, but refused to accept the extent as specified in the survey without 
a proper study to substantiate  or corroborate the facts. 
23 As indicated at the previous TPR, customs modernization has been an integral part of the 
Comprehensive Revenue Administration Modernization Programme, undertaken by the Government with assistance from the World Bank under the Export Diversification Project.  The project is aimed at, in particular, 
addressing corruption and inefficiency in duty collection, which have impeded business efficiency and 
weakened the Government's ability to collect revenue. 
24 World Bank (2005b). WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 42 
 
 
under ASYCUDA++), where restrictions on truck m ovements and lack of customs officers and 
checkpoints can delay trucks by a week.  In the contex t of a new project to modernize, restructure, and 
corporatize NBR25, an assessment is being undertaken of furt her needs in automation and integration 
of customs, VAT, and income tax data. 
27. Smuggling, especially across the Indian border, is a perennial problem for Bangladesh.  Cattle 
(cows) comprise the major target for smuggling becau se of India's export ban, for religious purposes, 
and Bangladesh's high domestic demand.  The authorities indicate that smuggling has fallen substantially as border protection efforts have improved and local production of the main items 
smuggled has become more competitive.  They also state that it is difficult to estimate the level of 
smuggling as there are no reliable, independent studi es.  At the time of the previous TPR, estimates 
indicated that the value of unofficial commodity imports could be as high as that of official trade or even twice that amount.
26  High tariffs (and other indirect taxes), quantitative restrictions or import 
bans tend to provide an incentive for such unoffici al trade, which, as stated earlier (section 1), 
diminishes the effects of border protection. 
(iv) Tariffs 
(a) Structure 
28. Tariffs are ad valorem , with few exceptions (section (d) below), and are levied on the c.i.f. 
value of imports.  As from  June 2002, the classification of the customs tariff has been based on the 
Harmonized Commodity Description and Coding System (HS) 2002.  In early 2006, there were 6,637 tariff lines classified at the HS 8-digit le vel (6,100 in 2000).  Bangladesh accords at least MFN 
treatment to imports from all trading partners, including non-members of the WTO. 
29. The Bangladesh Customs Tariff has a single ty pe of rate, the applied MFN tariff rate.
27  The 
Customs Tariff (under The First Schedule of the Cu stoms Act) is published annually;  the current 
schedule was published on 9 June 2005, and the 2006 /07 publication was due in June 2006.  Traders 
can have a clear idea of applicable import and expo rt tariffs by consulting a single document, i.e. the 
First Schedule.  
30. Efforts to simplify and rationalize the tariff structure have continued (Table III.1).  The 
2005/06 applied MFN tariff contains four tariff bands (zero, 6% (basic raw materials), 13% 
(intermediate goods), 25% (finished goods)) compar ed with five bands in 1999/00 (zero, 5%, 15%, 
25%, 37.5%).  The proportion of tariff lines with multip le rates at the HS four-digit level seems to 
have dropped from a quarter to 21.8% (21.6% accord ing to the estimates of the authorities).  As 
indicated in the previous Review, the existence of different rates within the same subchapter causes 
uncertainty, gives rise to disputes, and leads to allegations of harassment and corruption. 
                                                      
25 Corporatization removes direct control from th e Government, thereby making the agency more 
independent. 
26 WTO (2000). 
27 Until 1999/00 the customs tariff was divided into three rate classifications:  statutory, general 
exemption, and concessional rates, which were contained in the First Schedule to the Customs Act, 1969.  The statutory rate was operative when no general exemption rate was available;  the general exemption rate was 
applicable for all except 12 tariff lines. The applied MFN tariff rates were the general exemption rates, unless 
these were not available, in which cas e, the higher statutory rate was used.  Concessional rates were updated in 
each budget. Bangladesh WT/TPR/S/168/Rev.1 
 Page 43 
 
 
Table III.1 
Tariff structure, 1990-06 
Year Number of tariff 
bands Maximum rate 
(%) Unweighted 
average rate (%) Weighted average 
rate (%) Dispersiona 
1990/91 18 350.0 88.6 42.1 72.0 
1991/92 18 350.0  57.5 24.1 73.1 
1992/93 15 300.0 47.4 23.6 65.1 
1993/94 12 300.0 36.0 24.1 67.7 
1994/95 6 60.0 25.9 20.9 74.5 
1995/96 7 50.0 22.3 17.0 74.1 
1996/97 7 45.0 21.5 17.9 75.9 
1997/98 7 42.5 20.8 16.1 73.9 
1998/99 7 40.0 20.3 14.7 72.2 
1999/00 5 37.5 19.5 13.8 80.8 
2000/01 .. .. 18.6 15.1 .. 
2001/02 .. .. 17.1 9.7 .. 
2002/03 .. .. 16.5 12.4 .. 
2003/04 .. .. 15.6 11.5 .. 
2004/05 .. .. 13.5 9.6 .. 
2005/06 4 25.0 .. .. .. 
.. Not available. 
a Coefficient of variation. 
Note: The numbers may differ from those calculated by the WTO Secretariat. 
Source:  Data for 1990-99 provided by the authorities of Bangl adesh for the previous Review;  and Ministry of 
Finance (2005), Bangladesh Economic Review 2005,  Table 6.1. 
(b) Bound MFN tariffs 
31. As a result of the Uruguay Round (UR) and Ar ticle XXVIII negotiations (finalized in 2000)28, 
Bangladesh has bound 952 tariff lines (15% of the total number) (Table III.2):  100% of its 
agricultural tariff lines (WTO definition) and 3% of  its industrial tariff lines;  87% of agricultural 
tariff lines are bound at 200%, and the remainder ra nge from 7.5% to 50% (Table AIII.1).  The 
171 non-agricultural bound lines are at several rates ranging from zero to 200% with a high 
concentration at 20%, 30%, and 50%.  "Other duties and charges" are bound at 2.5%, which at the time of the Uruguay Round ne gotiations represented the ad valorem  licence fee that is no longer in 
place (section (v)).
29  The binding commitments for some items  were applicable immediately (as of 
1995), others were subject to a transition period up to 2004. 
32. The 2005/06 applied MFN tariff rates seem to meet tariff binding commitments, except for 
two items (vanilla other than vanilla beans, and sp arking plugs for use exclusively in aircraft or 
helicopter engines) where rates seem to exceed bound ceilings, possibly as a result of tariff 
nomenclature changes.30  Other border charges are at least 4%, which is higher than the bound rate for 
this type of levy.   
                                                      
28 Renegotiation of the pre-UR Schedule LXX in connection with the implementation of the 
HS nomenclature. 
29 Annex to Part I of Schedule LXX. 
30 The applied MFN tariff rate in the 2005/06 Customs Tariff for HS items 0905.00.10 (vanilla not 
wrapped (canned)) and 0905.00.20 (vanilla wrapped (can ned)) is 25%.  However, Bangladesh's Loose-Leaf WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 44 
 
 
33. The absence of bindings for 85% of tariff lines, and current gap of 149 percentage points 
between average bound and applied MFN tariff rates pr ovide a wide scope for the authorities to raise 
applied rates within bindings, thereby imparting a high degree of unpredictability to the customs 
tariff.  In 2005/06, tariffs on more than 40 eight-digit items were increased significantly.31  T h e  
widening of the gap since 1999/00 is mainly the result of unilateral reductions in applied MFN rates.  
The difference between average applied and bou nd rates remains much higher for agricultural 
products than for industrial products (Table III.2). 
Table III.2 
Structure of MFN tariff, 1999/00 and 2005/06 
(Per cent)  
  MFN 1999/00 MFN 2005/06 Final bound 
 Bound tariffa    
1. Bound tariff lines (% of all tariff lines) 13.2 15.0 15.0 
2. Simple average bound rate 188.4 163.8 163.8 
 Agricultural products (HS01-24) 196.1 187.1 187.1 
 Industrial products (HS25-97) 148.6 94.3 94.3 
 WTO agricultural products 197.7 191.0 191.0 
 WTO non-agricultural products 50.0 38.1 38.1 
 Textiles and clot hing 50.0 44.4 44.4 
3. Tariff quotas (% of tariff lines) 0.0 0.0 0.0 
4. Duty-free tariff lines (% of tariff lines) 0.0 0.2 0.2 
5. Non- ad valorem  tariffs (% of tariff lines) 0.0 0.0 0.0 
6. Non- ad valorem  tariffs with no AVEs (% of tariff lines) 0.0 0.0 0.0 
7. Nuisance bound rates (% of tariff lines)b 0.0 0.0 0.0 
 Applied MFN tariff    
1. Simple average applied rate 22.2 15.5 .. 
 Agricultural products (HS01-24) 25.1 19.6 .. 
 Industrial products (HS25-97) 21.8 14.7 .. 
 WTO agricultural products 24.6 18.1 .. 
 WTO non-agricultural products 21.9 15.1 .. 
 Textiles and clothing 31.5 21.3 .. 
2. Domestic tariff "peaks" (% of all tariff lines)c 0.0 0.0 .. 
3. International tariff "peaks" (% of all tariff lines)d 55.8 42.1 .. 
4. Overall standard deviati on of tariff rates 13.2 8.8 .. 
Table III.2 (cont'd) 
                                                                                                                                                                     
Schedule LXX HS code 0905 (vanilla) is split into two items, vanilla beans and vanilla other than vanilla beans, 
with, respectively, a final bound rate of 20% and 200% (implementation was in 1995).  Additionally, the 
Customs Tariff 2005/06 sets an applied MFN rate of 13% for HS item 8511.10.00 (sparking plugs), while Schedule LXX binds sparking plugs for use exclusively in aircraft or helicopter engines (HS 8511.10.10) at a 
ceiling of 3%. 
31 These increases cover:  drawing or colouring books, music, printed or in manus cript, iron ore, carbon 
steel strips, engines of capacity 3 to 45 hp (from zero to  7.5%);  cash registers, photosensitive semi-conductor, 
tractor parts (from zero to 15%);  conc rete-mixer lorries  (from 7.5% to 15 %);  works trucks fitted with crane 
(from 7.5% to 25%);  other anti-knock preparations, lumi lurex yarn, glass wool blanket, carbon steel strips, 
angles, shapes and sections of iron, low lift pump for sw imming pools, other self-propelled trucks, other trucks, 
mobile and other battery charger, other special purpose ve hicle (from 7.5% to 15%);  prepared or preserved fish, 
caviar, molluscs and other aquatic prepared or preserved, other food preparations, track suits of cotton, ski suits, 
copper wire, aluminium wire, taps, cocks, valves, static converters, vehicle 1,500 cc-1,649 cc in CKD, vehicle 
exceeding 1,649 cc in CKD (from 15% to  25%);  and, scrap vessel (from Tk  800 to Tk 1,000 ) (Ministry of 
Finance, 2005b), Annexure-B-2. Bangladesh WT/TPR/S/168/Rev.1 
 Page 45 
 
 
  MFN 1999/00 MFN 2005/06 Final bound 
5. Coefficient of variation of tariff rates 0.5 0.6 .. 
6. Tariff quotas (% of all tariff lines) 0.0 0.0 .. 
7. Duty free tariff lines (% of all tariff lines) 8.3 7.5 .. 
8. Non- ad valorem  tariffs (% of all tariff lines) 0.0 0.1 .. 
9. Non- ad valorem  tariffs with no AVEs (% of all tariff lines) 0.0 0.1 .. 
10. Nuisance applied rates (% of all tariff lines)b 0.0 0.0 .. 
.. Not available. 
a Calculations are based on 15.0% bound rates only;   14.6% are fully bound and 0.4% are partially bound. 
b Nuisance rates are those greater than zero, but less than or equal to 2%. 
c Domestic tariff peaks are defined as those exceeding three times the overall simple average applied rate. 
d International tariff peaks are defined as those exceeding 15%. 
Note: Calculations exclude specific rates (representing 3 and 6 tariff lines, respectively, for 1999/00 and 2005/06).  The 1999 /00 tariff 
is based on HS96 nomenclature, totalling 6,529 tariff lines;  the 2005/06 tariff is based on HS02 nomenclature, totalling 
6,637 tariff lines.  Bound calculations for 1999/00 do not cover the outcome of Article XXVIII nego tiations concluded in 2000. 
Source : WTO calculations, based on data provide d by the authorities of Bangladesh. 
34. In February 2006, the authorities indicated to the WTO Secretariat that the Bangladesh Tariff 
Commission (BTC) and NBR were verifying the concerns expressed on bindings-related issues.  
Their position would be notified to the WT O Secretariat in July 2006 following the 
revision/rationalization in the tariff and ot her duty structure for the Budget 2006/07. 
(c) Duty-free items 
35. During the period under review, in an effort to reduce the discretionary power of the assessing 
officers and to address the issue of tariff rationalizati on at the HS four-digit level, the percentage of 
duty-free tariff lines dropped slightly, from 8.3% (1999/00) to 7.5% (2005/06) (7% according to the 
authorities) (Table III.2);  at the time of the pr evious Review, the share of duty-free lines had more 
than doubled (from 3.4% in 1992/93). 
(d) Specific duties 
36. Despite pursuing a pro- ad valorem  duties policy since 2000, the authorities indicate that 
specific duties are used to thwart the tendenc y for under-invoicing and minimize disputes between 
traders and the customs authority resulting from such pr actices.  This also allows importers to predict 
their duty incidence at border level in absolute te rms, which is believed by the authorities to be 
desirable for trade and industry, especially when pric es go up in the international market.  In addition, 
some of the items are industrial raw materials ch aracterized by high price fluctuations in the 
international market, and could cause a lot of disturbances in the domestic market. 
37. All except six HS eight-digit tariff lines (three at  the time of previous Review) are subject to 
ad valorem  rates.  Specific duties are now levied on:   cement clinkers (Tk 350 per tonne, as from 
10 June 2004);  petroleum bitumen (Tk 3,500 per tonne, as from 9 June 2005);  cellular/mobile 
telephones (Tk 300 per set, as from 9 June 2005);  and vessels and other floating structures for 
breaking up (Tk 1,000 per light displacement tonnage, as from 9 June 2005).  Gold is now subject to 
an ad valorem  rate of 25%. 
(e) Level of MFN tariff protection 
38. Since its previous Trade Policy Review in  2000, Bangladesh has reduced its level and 
dispersion of nominal tariff protection.  The simple  average applied MFN tariff (exclusive of specific WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 46 
 
 
duties and other charges) fell from 22.2% in 1999/00 to 15.5% in 2005/06 (Table III.2);  the much 
lower import-weighted average MFN tariff rate followed a similar trend (Table III.1).  Most of this fall was achieved by lowering the peak rate – the maximum tariff rate decreased from 37.5% to 25% – 
and the re-distribution of high tariffs into lower "tiers" from zero to 13% (Chart III.1).
32  A variety of 
items are subject to the peak rate, including:  fresh /refrigerated/chilled/frozen meat/fish, milk and milk 
cream, fresh/dried/processed vegeta bles/fruit, coffee, spices, sugar, cereals, alcoholic beverages, 
various chemicals, tyres, plywood, paper, sacks/ bags, numerous woven fabrics, yarns, clothing, 
garments, footwear, jewellery, refrigerators/free zers, air conditioning units, radio/tv sets, motor 
vehicles, furniture, toys.  Average tariff protecti on remains higher for agricultural products, at 19.6%, 
than for industrial goods 14.7% (section 2(iv)(a)).   
 (8.3%)  (13.3%) 
 n.a.  n.a.(22.5%) (21.8%).  (33.9%) 
n.a.(7.5%)
n.a.(22.3%)(28.1%)(42.1%)
 n.a.
05001,0001,5002,0002,5003,000
Duty free 5% 6% 13% 15% 25% 37.5%
n.a.             Not applicable.  No such rate in force this year.
Note:          Figures in parentheses denote the share of total lines.     Source:     WTO Secretariat calculations, based on data provided by the authorities of Bangladesh.Number of tariff linesChart III.1
Distribution of MFN tariff rates, 1999/00 and 2005/06
Tariff rates MFN 1999/00
MFN 2005/06
 
 
(f) MFN tariff dispersion 
39. The potential efficiency losses associated with th e tariff depend not just on the average level 
of applied MFN tariff protection, but also on the dispersion in rates across products.33  Judging from 
the proportion of tariffs classified as domestic or in ternational "spikes", and particularly the standard 
deviation, the dispersion in tariff rates has dr opped since 1999/00 (Table III.2).  By contrast, the 
coefficient of variation has risen.  The average ta riff level for live animals, textiles, clothing and 
footwear, and prepared food continues to exceed co nsiderably the MFN average applied rate, while 
                                                      
32 Similarly, between 1999/00 and 2004/05 the import-weighted average MFN tariff dropped from 
13.8% to 9.59% (Ministry of Finance, 2005a). Bangladesh WT/TPR/S/168/Rev.1 
 Page 47 
 
 
the rates for mineral products, chemicals and chem ical products, hides and skins, machinery, and 
precision instruments remain relatively low (Chart III.2). 
0510152025303540
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 1617 18 19 20 21Chart III.2
MFN applied averages by HS section, 1999/00 and 2005/06
Per cent
Source :   WTO Secretariat calculations, based on data provided by the authorities of Bangladesh.1999/00
2005/06
01 Live animals and prod.        
02 Vegetable products03 Fats and oils      04 Prepared food, etc.
05 Mineral products
06 Chemical and prod.07 Plastic and rubber
08 Hides and skins09 Wood and articles10 Pulp, paper, etc.
11 Textiles and articles
12 Footwear, headgear13 Articles of stones
14 Precious stones, etc.15 Base metals and prod.16 Machinery
17 Transport equipment
18 Precision instruments19 Arms and ammunition
20 Miscellaneous manuf.21 Works of art, etc.
Note:      Calculations exclude specific rates (representing 3 and 6 tariff lines, respectively, for 1999/00 and 20005/06).MFN average applied 
rate 2005/06
(15.5%)MFN average applied 
rate 1999/00
(22.2%)
 
(g) MFN tariff escalation 
40. Industrial Policy 2005 sets explicit objectives on tariff escalation, stipulating that the duty 
structures of imported raw materials, intermed iate goods and manufactured goods will be set at 
gradually escalating rates.34  Bangladesh's escalating MFN tariff structure with average duty rates on 
raw materials lower than those for semi-pro cessed and fully processed goods favours domestic 
producers without spurring them,  through competition, to higher levels of efficiency.35  As indicated 
in the previous Review, this explains why the overa ll effective rate of protection (ERP) exceeded the 
                                                                                                                                                                     
33 The decline in the dispersion in nominal tariff rates reduces the scope for "rent-seeking" behaviour.  
Such behaviour might involve corrupt customs officials threatening to misclassify imports at a higher tariff rate, unless a bribe is paid by the importer, or agreeing to misclassify imports at a lower rate in return for a bribe. 
34 Industrial Policy 2005, paragraph 7.4.  Ava ilable at:  http://www.fbcci-bd.org/HTML/POLICY/ 
Industrial_Policy_2005.htm [8 November 2005].   
35 World Bank (2005b). WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 48 
 
 
average nominal applied MFN tariff rate;  no recent ER P estimates were available for this Review.  In 
2005/06, the average MFN tariff applied to primar y products was 14.9%, compared with 14.4% for 
semi-processed goods, and 16.3% for fully processed products, wh ich accounted for 55.6% of total 
tariff lines (Table III.3).  Tariff escalation remains pa rticularly pronounced in the textiles and leather, 
wood and wooden furniture, chemicals, and basic me tal sectors;  average tariffs on finished products 
in these industries are at least twice as high as those on raw materials (Chart III.3 and Table AIII.2). 
Table III.3 
Applied MFN tariff by degree of processing, 1992-06 
(Per cent) 
 1992/93 1994/95 1999/00 2005/06 
Raw materials 48.2 28.5 17.6 14.9 
Semi-processed  54.1 33.6 20.7 14.4 
Fully- processed  62.5 36.8 24.1 16.3 
Source : WTO Secretariat, based on data provided by the Bangladesh authorities.  
(h) Tariff concessions  
41. The foregoing indicators of tariff protection do not take into account various tariff 
concessions and preferences (section (i) below).  Du ty concessions and general exemptions to the 
applied MFN tariff rates are provided in accordance with Section 20 of Customs Act on a case-by-case basis through gazette notification.   Bangladesh seems to maintain some 
20 concessionary categories with rates ranging from  zero to 15% subject to certain terms and 
conditions (Table III.4).  There are three types of  tariff concessions:  those on imports of capital 
machinery and spares/parts by registered industrial consumers, including export-oriented industries;  
those targeting exporters;  and those provided for a specific use or user (i.e. end-use provisions) such 
as the dairy and poultry, pharmaceutic al, leather and textile industries. 
42. Industrial units that are registered with the re levant sponsoring agencies are now permitted to 
import machinery and parts duty free or at the con cessional 6% rate (previously 5% across the board) 
on up to 10% of the total c.i.f. value (section (4)(i )).  In the case of 100% export-oriented industries, 
no import duty is charged;  instead, importers subm it only one indemnity bond (on non-judicial stamp 
paper) for a period of two years within which they  must install all machinery and export all goods 
produced in the first year.  At the time of the pr evious Review, the then concessionary tariff rate of 
5% for machinery and parts, the largest category, covered 17.8% of total eight-digit tariff lines;  
machinery and parts for 100% expor t-oriented industries covered 15.2% of all tariff lines.  No recent 
statistical data on this matter were available fro m the authorities.  To enable quicker customs 
assessment and clearance for local industries, impor ted capital machinery and parts are also exempt 
from VAT, advance income tax and the infrastru ctural development surcharge (section (v)).   
43. With regard to exporters, apart from tariff ex emptions for imports of capital machinery and 
parts, available for 100% export-oriented industr ies, concessions are provided to assist generally 
import-dependent Bangladeshi producers to offset the effects of the country's relatively high customs duties.  These include duty drawback and speci al bonded warehouses, whereby customs duties paid 
on imports of inputs used in the manufacture of  finished products are refunded or exempted 
(section (3)(ix)).  Exemptions from customs tariffs  are also granted on imports destined for export 
processing zones (section (3)(xii)). 
 Bangladesh WT/TPR/S/168/Rev.1 
 Page 49 
 
 
n.a.n.a.0510152025303540
Food,
beverages
and tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishing Chemicals Non-metallic
mineral
products Basic metal Fabricated
metal
products and
machineryOtherChart III.3
Tariff escalation by two-digit ISIC industry, 1999/00 and 2005/06
n.a.n.a.0510152025303540
Food,
beverages
and tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishingChemicals Non-metallic
mineral
products Basic metal Fabricated
metal
products and
machineryOtherAverage applied rate in manufacturing
(22.5%)
Not applicable.
Calculations exclude specific rates (three and six tariff lines, respectively, for 1999/00 and 2005/06).WTO Secretariat calculations, based on data provided by the authorities of Bangladesh.n.a.
Note:
Source :Per cent
First stage of processing Fully processed Semi-processedPer cent
Average applied rate in manufacturing
(15.5%)1999/00
2005/06
 WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 50 
 
 
Table III.4 
Concessionary tariff rates 
Category of concession Eligibility No. of tariff lines Concessionary 
rate (%) 
Capital machinery  Registered industrial consumers 518 6.0 
Capital machinery (parts) Registered industrial consumers 565 6.0 
Capital machinery 100% export-oriented industries 500 0.0 
Capital machinery (parts) 100% export-oriented industries 429 0.0 
Electrical and electronic parts (Table 1)a .. 61 25.0 
Electrical and electronic parts (Table 2)a .. 63 25.0 
Agricultural inputs (raw materials for 
insecticides):  Annex 1a .. 55 0.0 
Agricultural inputs (raw materials for 
insecticides):  Annex 2a .. 81 15.0 
Agricultural inputs:  raw materials for fisheries  .. 4 0.0 
Pharmaceutical raw materials:  Annex 1.Aa Approved pharmaceutical 
industries 162 5.0 
Pharmaceutical packing materials:  Annex 1.Ba Approved pharmaceutical 
industries 24 5.0 
Pharmaceutical raw materials:  Annex 2.Aa Approved pharmaceutical 
industries 320 15.0 
Pharmaceutical packing materials:  Annex 2.Ba Approved pharmaceutical 
industries 20 15.0 
Raw materials for antibiotics .. 52 0.0 
Raw materials for paracetamol .. 16 0.0 
A. Raw materials for antibiotics .. 8 2.5 
B. Raw materials for paracetamol .. 11 2.5 
C. Raw materials for renitidine 
hydrochloride .. 12 2.5 
D. Raw materials for metronidazole benzoyet .. 4 2.5 
E. Raw materials for riboflavin sodium 
phosphate .. 2 2.5 
.. Not available. 
a Neither Tables nor Annexes were available to the Secretariat. 
Note: No comments were provided by the authorities on the content of this table. 
Source:  WTO Secretariat, based on information pr ovided by the authorities of Bangladesh.  
44. The tariff rate concessions provided on the b asis of end-use are allowed only after the 
importer proves that the goods have been used fo r the purpose for which th ey were cleared.  The 
objective of the end-use concessions was to mitigate the effect of tariffs on certain domestically oriented sectors, such as agriculture.  At the time of the previous Review of Bangladesh, concern was 
expressed that these concessions  add to the administrative complexity of the tariff schedule and may 
result in unintended and undesirable effects on domes tic resource allocation.  In February 2006, the 
NBR indicated to the Secretariat th at a study was being undertaken with the assistance of Bangladesh 
Tariff Commission and the World Bank regarding various  tariff-protection and related issues.  Further 
rationalization in the tariff structure is to be b ased on the conclusions of this study and carried out 
through the budget process held in June every year. 
(i) Tariff preferences 
45. Bangladesh grants tariff preferences (Chapter II) under:  the Bangkok Agreement;  the South 
Asian Preferential Trading Arrangement;  South As ian Free Trade Area (as from January 2006);  and Bangladesh WT/TPR/S/168/Rev.1 
 Page 51 
 
 
the Global System of Trade Preferences (Table III.5) .  Product coverage and preferential margins vary 
from one agreement to another;  product covera ge under the Bangkok Agr eement was expanded after 
the third round of negotiations (October 2001-mid- 2005) from 129 to 210 HS eight-digit items.  The 
relevant rules of origin are based on value-added criteria. 
Table III.5 
Preferential trading agreements, 2006 
Agreement Participants Coverage by Bangladesh  Preferential margin 
Bangkok Agreement  Bangladesh, India, Republic 
of Korea, Sri Lanka 210 lines  10% to 60%  of MFN tariffs 
South Asian Preferential Trading 
Arrangement (SAPTA) Bangladesh, Bhutan, India, 
Maldives, Nepal, Pakistan, 
Sri Lanka 494 lines;  and 206 additional 
lines from least-developed 
countries of the group (Bhutan, 
the Maldives, and Nepal) 10% to 20% of MFN tariffs 
South Asian Free Trade Area 
(SAFTA) Bangladesh, Bhutan, India, 
Maldives, Nepal, Pakistan, 
Sri Lanka  .. 100% of MFN tariffs 
Global System of Trade 
Preferences (GSTP) 48 countries (see Chapter II for 
the list of the countries) 7 HS four-digit items for least 
developed participating countries 2.5% to 10% of MFN tariffs 
.. Not available. 
Note: No comments were provided by the authorities on the content of this table. 
Source:  WTO Secretariat, based on information provided by the Bangladeshi authorities. 
46. At the time of the previous Review of Banglad esh, the tariff preferen ces it accorded under the 
regional and bilateral agreements were so marginal that they had not resulted in an increase in overall 
market access for the par ticipants of the agreements.  More over, the proportion of trade between 
Bangladesh and its trading partners under the prefer ential agreements had not increased significantly 
during the reviewed period.   The situation seems unchanged. 
(j) Rules of origin 
47. Bangladesh does not apply non-preferential rul es of origin on imports from MFN sources.  
For the purpose of implementing tariff preferences granted by Bangladesh, the Standard Rules of 
Origin, 1977, lay down procedures for determin ing the origin of products under preferential 
agreements.  The Standard Rules apply to impor ts under all preferential agreements, except SAPTA, 
whose rules of origin are laid down in the agreemen t itself.  The general rule is that the minimum 
local value added must be 50% of the f.o.b. value. 
48. Under the SAPTA, the general rule of 40% mi nimum local value added applies if a product 
originates from a single member state.  When produc tion involves more than one member state, 50% 
of value added is required.  For the least devel oped countries (LDCs), the value-added requirement is 
lower:  30% local value added for a product originat ing in a single state or 40% regional value added 
for production involving more than one state. 
49. In January 2006, Bangladesh had not endorsed  the relaxed regional cumulation criteria 
(special classification on goods originating in a pa rticular group, but sent to another country within 
the regional group for further processing) offered (i n the year 2000) by the EC under its GSP/EBA 
preferential scheme to all SAARC and ASEAN exports (Chapter II).36 
                                                      
36 Due to insufficient backward linkage industries, Bangladeshi manufacturers of woven garments have 
to rely heavily on fabric imports from countries such as India or China, and thus deprive the finished product originating in Bangladesh of EC GSP/EBA status.  The non-endorsement by Bangladesh of the relaxed value-WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 52 
 
 
(v) Other border charges and levies 
50. Additional protection afforded by three other bor der charges and discriminatory internal taxes 
has been modified during the period under review:  certain rates and produc t coverage have been 
changed, the import licence fee has been eliminated , and a regulatory duty was introduced in financial 
year 2000/01 (Table III.6).37  This form of protection is not reflected in the estimates of tariff 
indicators discussed in earlier sections.  The nominal rate of protection, taking into account the tariff 
and other border charges could raise the current av erage nominal applied MFN rate to 22.2% (35.7% 
including internal taxes).  As indicated earlie r, under Bangladesh's WTO Schedule LXX other duties 
and charges on covered lines are bound at 2.5%.  In  February 2006, the authorities indicated to the 
Secretariat that the Bangladesh Tariff Commission (BTC) in conjunction with NBR was in the 
process of reviewing these charges and taxes and their final position would to be  notified in July 2006 
once the necessary revision/rationalization of the stru cture of the tariff and other duties for the Budget 
2006/07 is decided. 
Table III.6 
Tariff and other duties on imports, 1999-00 and 2005/06 
 1999/00 2005/06 
 Ad valorem  rate 
(%) Coverage  
(% of tariff lines) Ad valorem  rate 
(%) Coverage  
(% of tariff lines) 
Customs tariff 0-37.5 100.0 0-25.0 100.0 
Other border charges     
 Infrastructural development 
 surcharge 2.5 98.4 4.0 96.2 
 Advance income tax 2.5 100.0 3.0 100.0 
 LCA/IP fee 2.5 89.6a n.a. n.a. 
Internal taxes     
 Value-added tax 15.0 93.7 15.0 88.3 
 Advance trade VAT n.a. n.a. 1.5 92.3 
 Supplementary duty 5.0-270.0 6.6 20.0-350.0 15.8 
Regulatory duty n.a. n.a. 5.0-30.0 (2003/04)b  
or 12.0 (2005/06)c  334 tariff linesb or 
1 tariff linec  
n.a. Not applicable. 
a Only imports above Tk 100,000 were covered. 
b According to the World Bank. c According to the authorities. 
Note: No comments were provided by the authorities on the content of this table. 
Source:  WTO Secretariat, based on information provided by th e authorities of Bangladesh;   and World Bank (2005b). 
(a) Infrastructural development surcharge 
51. The infrastructure development surcharge (ID S), an almost across-the-board import tax 
effective since 1 July 1997, has been increased grad ually, from 2.5% to 4% (of the 'assessable value' 
of imports).38  The IDS was introduced as a temporary measure, ostensibly to raise revenue for 
infrastructure development.  Given that it applies to most imports, the IDS augments overall average 
                                                                                                                                                                     
addition requirements targeted to SAARC (or ASEAN) su ppliers seems due to pressures from domestic textile 
manufacturers who might feel that such relaxation may favour inputs from elsewhere in the region.  EIU (2006). 
37 According to a 2003 World Bank report, the trade policy regime has become less transparent through 
resort to supplementary duties and infrastructure levies  that are effectively import duties (World Bank, 2003a). 
38 World Bank (2005b). Bangladesh WT/TPR/S/168/Rev.1 
 Page 53 
 
 
applied MFN tariff protection by around 3.84 percen tage points, thus counteracting the fall in the 
overall applied MFN tariff level.  The 258 (257 according to NBR) HS eight-digit items exempted from IDS include:  live animals/fish, sugar, rice;  ra w hides, skins and leather;  cotton;  minerals;  
chemicals;  fertilizers;  ferrous and non-ferrous articles;  synthetic staple fibres for spinning;  
computers;  cassettes and diskettes;  cellular phones;   watches;  and jeeps and cars of an engine 
capacity not exceeding 1,300 cc, imported by Members of Parliament. 
(b) Letter of credit authorization (LCA) or import permit (IP) fee 
52. The 2.5% LCA or IP fee has not been imposed since 2001/02;  the fee affected all imports of 
a value exceeding Tk 100,000, unless exempt by an Order.
39  Exemptions also included imports by 
public sector institutions, export-oriented industries,  and recognized industrial users (for imports of 
machinery and spares).  
(c) Advance income tax 
53. The advance income tax is levied on all commercia l importers, apparently at the rate of 3% of 
the c.i.f. value of imports.  This tax is creditabl e for corporate tax purposes, which means that it does 
not constitute an additional levy on imports as long as corporate (or personal) taxes payable are 
sufficient to be offset by the tax.  If the impor ter operates on a commercial basis the tax deducted at 
the import stage will be deemed to be the final settl ement of his tax liability.  If the importer benefits 
from a tax holiday, there is a legal provision to seek exemption from deduction of tax at source. 
54. Exemption from advance income tax is granted for, inter alia:  imports by Members of 
Parliament, of jeeps and motor cars of engi ne capacity not exceeding 3,000 cc and 1,300 cc 
respectively;  by bonded warehouse licensees;  temporary imports;  imports of capital machinery 
benefiting from concessionary rate  of import duty;  and some specific items subject to end-use 
provisions.   
(d) Value-added tax (VAT) and advance trade VAT (ATV) 
55. The VAT is still levied at a single rate of  15% on all imports and domestically produced 
goods;  currently 774 HS eight-digit tariff lines are zero rated.  In the past, the VAT had been used to 
provide extra protection for certain import-competing industries, including textiles.  In February 2006, 
the NBR indicated to the Secretariat that ther e were no provisions partly or fully exempting 
domestically produced textiles from VAT nor any excise duty on such items.  It also clarified that VAT valuation for some domestic te xtile products (such as cotton fabr ics) is based on a nominal fixed 
amount depending on the production capacity of the machine.  In the case of imports, valuation is 
based on the c.i.f. value plus import duty, and, in some cases, supplementary duty (see below).
40  
56. An ATV has been levied since 1 September 2004 at 1.5% on virtually all imports and 
domestically produced goods (513 HS eight-digit items zero-rated).  The authorities indicate that this 
tax is calculated assuming a minimum 10% value addition at the wholesale to retail level.  This VAT should ideally be collected after the sale is made.  Due to the limited capacity of the tax administration 
in collecting VAT on imported items for trade at retail level, the tax is collected at the import stage.  
They also indicate that the AT V does not create any bias against imported items as similar domestic 
items are also subject to a 1.5% ATV at the wholesal e level in addition to the regular 15% VAT at the 
manufacturing level. 
                                                     
 
39 World Bank (2003a). 
40 Exports are zero-rated;  VAT (and supplementary duty, where applicable) paid on imports used in 
the manufacture of exports is refunded. WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 54 
 
 
(e) Supplementary duty (SD) 
57. During the period under review, efforts have been made to narrow the range of SD rates.  SDs 
are aimed seemingly at discouraging imports of lu xury goods and production and supply of goods and 
services considered undesirable on social, moral or  religious grounds.  While these duties are like 
excise taxes and are, in principle, trade neutral (i.e. the same rates apply to imports and similar 
domestically produced goods), as pointed out at the ti me of the previous Review, this has not always 
the case in practice, taking into account produc t coverage and rate distribution by item.41  SDs are 
considered as tariffs in disguise.42 
58. According to the 2005/06 Customs tariff, SD pr oduct coverage has more than doubled since 
the previous Review, and the minimum and peak rates were raised;  six rates are now in force (20%, 
35%, 65%, 100%, 250%, 350%).  The three highest SD rates target, inter alia,  alcoholic beverages, 
tobacco products, road transport equipment, and parts.   Out of all the tariff lines subject to this tax 
about 69% are subject to the 20% rate and some 64% concern textiles and clothing.  
59. The Budget Speech 2005/06, contained a proposal to protect domestic industries (and save 
foreign exchange) by imposing a 35% SD on impor ted mineral water, and a 20% SD on imported 
detergent and all imported lamps and light fittings.43  In addition, an SD increase from 25% to 35% 
was proposed and implemented on some processed food and fruit juice items, and on all kinds of 
imported furniture.  
60. Levied on the landed value of goods plus cu stoms duty, but excluding VAT, supplementary 
duties have a cascading effect;  protection rates rise further with higher customs duty rates.  The 
discrepancy in tax rates is equivalent to an add itional tariff, which would add roughly 5.51 percentage 
point to the nominal average applied MFN tariff rate in 2005/06.  
(f) Regulatory duty 
61. According to a 2005 World Bank study, a regulat ory duty has been applied as an interim 
measure since 2000/01.  In 2003/04, it was levi ed on 334 tariff lines (including marine products, 
transport equipment, electrical and non-electrical ma chinery) at rates ranging from 5% to 30%;  for 
over 70%, the applied rate was 30%.44  According to the 2005/06 Customs tariff, it is levied at a single 
rate on one tariff line and rate (Table III.6).  At th e time of completion of this report, no further 
information or clarification had been provided by the authorities on the operation of this duty. 
(vi) Import prohibitions and restrictions 
62. Bangladesh has been subject to simplified c onsultations in the GATT and WTO Committee 
on Balance-of-Payments Restrictions since 1973, as it ma intains certain import restrictions or bans for 
balance-of-payments purposes, in accordance with  the provisions of Article XVIII:B of GATT.  
During the period under review, the BOPs Committ ee held consultations with Bangladesh in 
                                                      
41 At the time of the previous TPR, domestic cigarettes were subject to rates ranging from 30% to 51%, 
while the rate for imported cigarettes was 270%.  The current SD rate indicated in the 2005/06 Customs Tariff is 100%;  no information was available on the SD duty affecting domestic cigarettes. 
42 In practice, SDs seem to constitute a tool for le vying additional tariffs on any importables, as and 
when deemed appropriate by the authorities.  Many esse ntial and non-luxury goods, including raw materials and 
intermediates, are subject to SDs.  No consistent polic y objectives or pattern could be identified in the way SDs 
are levied (Federation of Bangladesh Chambers of Commerce and Industry, 2001). 
43 Ministry of Finance (2005b). 
44 World Bank (2005b). Bangladesh WT/TPR/S/168/Rev.1 
 Page 55 
 
 
October 2002 and November 2004;  the next consu ltations are to be held in the spring of 2007.45  
According to a 2000 phase-out plan (between Janua ry 2002 and January 2005) with respect to 
eleven categories of products, mainly textiles and clothing, the Committee was notified about the 
removal of restrictions on seven categories.  In October 2002, the Committee approved the 
maintenance of import restrictions for balance- of-payments purposes until 2009 on four additional 
items:  chicks, eggs, cartons (withdrawn in Ju ly 2005, section (x)(c) below) and common salt.  
Bangladesh is to submit a phase-out plan for the re maining import restrictions on these products in 
due course. 
63. The control list of Import Policy Order (IPO)  2003-2006 contains virtually all banned and 
restricted items (Tables AIII.3 and AIII.4).  The co ntent of this list has been  amended through several 
SRO/Public Notices;  a new IPO incorporating these amendments was being prepared at the time of 
completion of this report. 
64. The banned list generally includes two categories of products:  those that run counter to the 
religious and social morals of the Bangladeshis ("non-trade reasons"), for instance, swine products 
and drugs;  and items that directly compete with locally produced goods ("trade reasons") 
(Table AIII.3). 
65. Restricted items are importable subject to the c onditions specified in the Order.  Restricted 
items are controlled for social, religious, health, envi ronmental, security or trade reasons.  They can 
be classified generally as:  (i) products that re quire a certificate, prior permission or clearance from 
the relevant authorities (as partly listed in Table AIII .4);  (ii) products that can be imported only by 
registered industrial consumers, including expor t-oriented ready-made garments, hosiery and 
specified textile industries operating under the bonded warehouse system46, the pharmaceutical 
(allopathic) industries, and foreign exchange hotels,  within the import entitlement specified in their 
IRCs;  (iii) state-trading products, including arms  and ammunition, that can be imported only by 
government-designated firms;  and (iv) produc ts required to meet certain conditions. 
66. Significant progress has been made in reducing the number of trade-related items on the 
control list since the last Trade Policy Review of Bangladesh;  the IPO 2003-06 (as at March 2004) 
contained about half the number of HS four-digit items as the previous IPO (Table III.7).  By July 2005, its content had further dropped by a thir d as a result of the withdrawal (liberalization) of 
21 HS four-digit trade-related products (tandu leav es, packing carton for frozen food, woven/knit 
fabrics, grey cloth, shirting and suiting)
47 that were placed on the control list to protect domestic 
industries.  As of that date, according to the figures provided by the authorities, 3.3% of all HS four-
digit items were on the control list;  most of the item s remain subject to non-trad e-related restrictions.  
Only two HS four-digit products (live poultry, eggs) are currently subject to trade-related bans and 
one (common salt) to a trade-related restriction (Tables AIII.3 and AIII.4). 
67. A ban or restriction on an item can be re voked on the recommendation of the sponsoring 
authority or the Bangladesh Tariff Commission (BTC), which is responsible for monitoring 
production by "protected" industrial units.  If the qua lity of the domestic product deteriorates, if the 
domestic production level falls, or if anyone feels adversely affected by a ban or restriction, the 
sponsoring agency or the BTC can be requested to revoke the ban or restriction.  Details are not 
available on import bans or restrictions that  have been revoked on these grounds since 1992. 
                                                      
45 WTO documents WT/BOP/S/13, 16 November  2004, and WT/BOP/R/76, 3 December 2004. 
46 Indirect exporters are also included in this category. 
47 At the time of the previous Review of Bangladesh, the textile sector enjoyed the heaviest protection, 
accounting for 38.7% of all tariff lines subject to import prohibitions or restri ctions.  Import bans were in place 
on all woven fabrics, and imports of grey cloth were restricted to the ready-made-garment industry. WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 56 
 
 
68. Imports from Israel, as well as goods carried on the flag vessels of this country, remain 
prohibited.48  Between March 2002 and 15 December 2005,  under pressure of domestic producers, a 
ban on imports of yarn/textiles entering from Indi a on overland routes (Benapole border crossing) was 
in place.49 
Table III.7 
Evolution of the control list IPO 1991-93 to IPO 2003-06 
 IPO 1991-93 IPO 1993-95 IPO 1995-97 IPO 1997-02 IPO 2003-06 
Items on the control list at the HS four-digit 
level 193 
(15.6%) 111 
(9.0%) 120 
(9.7%) 122 
(9.8%) 62 
(4.9%) 
Trade-related items on the control list at the 
HS four-digit level 79 
(6.4%) 19 
(1.5%) 27 
(1.9%) 27 
(2.2%) 24 
(1.9%) 
Note: The figures in parenthesis is the share of total four-d igit HS tariff lines.  There were 1,240 lines at the HS96 four-dig it level until 
2002 and 1,244 (HS02) as from 2003. 
Source:  Various IPOs;  and the Bangladeshi authorities.  
(vii) Import licensing  
69. Until 31 December 1998, Bangladesh benef ited from a transitional period for the 
implementation of certain requirements linked to automatic licensing procedures under Footnote 5 to 
Article 2:2 of the Agreement on Import Licensing Procedures.50  In March 2000, Bangladesh notified 
the WTO Committee on Import Licensing that no import licence is required for import of any item into Bangladesh (therefore, questions related to im port licensing procedures were not applicable) and, 
in 2005 it provided its first replies to the questionnaire on import licensing procedures.
51 
70. Import licences, per se , are not required for any imports into Bangladesh.  However, in 
addition to the standard LCA import procedure, a permit, clearance, prior permission or approval may 
be required for a number of imported products (Table  AIII.4).  Such a requirement implicitly imposes 
import licensing.  Many of the clearance requirements for items on the restricted list are on health or safety grounds and therefore seem to be "automatic".   However, some requirements are used for the 
administration of quantitative restrictions (crude soyabean oil, second-hand clothing, methanol/methyl 
alcohol) and thus equivalent to "non-automatic licensing". 
71. Some categories of the restricted items (common salt, ethanol, petroleum products, 
methanol/ethyl alcohol, break acrylic, second-hand clothing, iron and steel scrap, aluminium waste 
and scrap) can be imported only by registered industria l consumers.  The list of restricted items these 
consumers can import must be appr oved by the relevant authorities;  the list, including the quantity 
and value, is then approved by the Chief Contro ller of Imports and Exports and recorded in their 
IRCs. 
72. Second-hand clothing is importable by 3,000  commercial importers selected by an open 
lottery of quotas distributed among different districts on the basis of population (see also section (viii) 
below).  A ceiling of Tk 50,000 is set for each importer, who may purchase, on the basis of prior permission from the CCIE, blankets, sweaters, ladies cardigans, men's jackets (including zipper jackets), men's trousers and shirts of synthetic and blended fabric;  the maximum quantity that may be 
                                                     
 
48 Import Policy Order 2003-2006.  
49 World Bank (2005b);  and EIU (2006). 
50 WTO document WT/Let/1/Rev.2, 22 May 1995. 
51 WTO documents G/LIC/N/1/BGD/1, 25 April 2000;  G/LIC/N/1/BGD/2,  1 April 2005;  
G/LIC/N/3/BGD/1, 25 April 2000;  and G/LIC/N/3/BGD/2, 4 April 2005. Bangladesh WT/TPR/S/168/Rev.1 
 Page 57 
 
 
imported within the ceiling is further subject to a weight limit.52  All consignments of second-hand 
clothing must also be accompanied by a certifi cate from a chamber of commerce of the exporting 
country certifying that the consignment does not contain any banned items.  
73. Apart from the restricted items in the control list, an import permit or clearance permit 
(though without an LCA), is required from the CCIE fo r:  (i) imports of books, magazines, journals, 
periodicals, and scientific and laboratory e quipment against surrender of UNESCO coupons; 
(ii) imports under the pay-as-you-earn (PAYE) scheme53;  (iii) imports by passengers coming from 
abroad of items in excess of the permitted allowan ce;  (iv) imports of free samples, advertising 
materials, and gift items above th e prescribed ceiling;  (v) imports of drugs and medicines (allopathic) 
under the product bonus system, under the guideline of th e Drug Administration;  and (vi) imports of 
capital machinery for joint-venture industrial units.  
(viii) Import quotas 
74. As indicated, the system of non-automatic import clearance, implicitly places ceilings on 
imports of the products covered.  In April 2005, Bangladesh notified the WTO Committee on Import 
Licensing that restrictions on import of products, were applicable globally.  In the case of food 
products and drinks, the condition of  radioactivity test applies to all other countries except Malaysia, 
Singapore, SAARC countries, and South-East  Asian countries, depending on the product54;  this 
policy could change upon collection of market sampl es and proof of existence of harmful levels of 
radioactivity.  Information concerning alloca tions of quotas for importing crude soyabean oil, 
second-hand clothing and methanol/methyl alcohol,  and formalities for filing applications were 
published by the CCIE through public notice.  In Febr uary 2006, the authorities indicated that only the 
second-hand clothing quota was in force.  The ove rall amount and the maximum allocated to each 
importer are published without any country-specific quota.  The size of the quota is determined district-wise on the basis of population in the case of second-hand clothing (yearly);  importers are selected through lottery.  Unused allocations are not added to quotas for a succeeding period.  The 
names of the concerned importers are made know n to the governments and export promotion bodies 
of exporting countries upon request.  No further in formation (e.g. on quota sizes and allocation by 
product (beneficiary and origin)) was provided by the authorities. 
(ix) State trading  
75. State involvement in the economy (including trad e and trade-related activities) has persisted 
during the period under review due, inter alia,  to the slow progress in the privatization process 
(section 4(vii)).  The authorities consider that th e opening up of the economy proceeded faster than in 
many neighbouring countries, thus allowing the private sector to assume the principal role. 
76. According to a World Bank survey, by 2003 the entities largely engaged in commercial 
activities consisted of around 40 state-owned non-fina ncial corporations and boards (including their 
approximately 200 subsidiary enterprises), two De partmental enterprises (Bangladesh Telephone & 
Telegraph Board (BTTB) and Bangladesh Railway),  and four nationalized commercial banks and 
                                                     
 
52 Weight limits are 4 tons for sweaters, ladies cardigans, men's jackets, and men's trouser, 1.5 tons for 
blankets, and 1 ton for shirts of synthetic blended fabric. 
53 The PAYE scheme links the repayment of the initial credit to the income earned from using the 
services of the import, and is subject  to clearance from the Bangladesh Bank .  The following imports are eligible 
for the scheme:  (i) plant and machinery of permissible specification, new or less than 12 years old;  (ii) motor 
cars, new or less than five years old;  (iii) cargo or passe nger vessels, new or less than 15 years old;  (iv) plant 
and machinery for export-oriented industrial units;  and (v) fishing vessels, new or less than 20 years old. 
54 WTO document G/LIC/N/3/BGD/2, 4 April 2005. WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 58 
 
 
four specialized development banks.55  The public sector is the country's largest importer as most 
government agencies, autonomous organizations, and public sector corporations import directly 
through public tenders.56  At the time of the previous Review , imports by government-sector agents, 
including the categories of Trading Corporation of Bangladesh (TCB), government and 
semi-government, and nationalized industries, account ed for 9.3% of total imports (1997/98);  no 
recent data on foreign trade undertaken by SOEs were available from the authorities.  By 2003, 
Bangladesh's major public sector or state-owned direct importers were:  Bangladesh Chemical 
Industries Corporation (BCIC);  Bangladesh Steel & Engineering Corporation (BSEC);  Bangladesh Oil, Gas and Mineral Corporation (BOGMC or Pe trobangla);  Bangladesh Sugar & Food Industries 
Corporation (BSFIC);  Trading Corporation of Bangladesh (TCB);  Bangladesh Power Development 
Board (PDB);  Rural Electrification Board (REB);  Dhaka Electric Supply Authority (DESA);  Water 
and Sewage Authority (WASA);  Department of He alth and Family Planning;  Bangladesh Telephone 
& Telegraph Board (BTTB);  Directorate General of Defense Purchase (DGDP);  and Civil Aviation Authority of Bangladesh (CAAB).  Exclusive import rights have been maintained for certain state 
firms or certain categories of goods (military w eapons and arms, petroleum products (HS headings 
27.09 and 27.10)/Bangladesh Petroleum Corporation (BPC), explosive substa nces for commercial use 
(HS headings 36.01 to 36.04)/TCB, sugar and salt/BSFIC and TCB). 
77. At present, the TCB is mandated to carry out import, export, and occasionally sales, to deliver 
essential commodities at a fair price at times of econom ic distress or special occasions;  the authorities 
indicate that its import activities have been reduced.  According to a Word Bank study, its functions 
are being squeezed.
57  The authorities indicate that the TCB imported salt and sugar during 2000-02, 
then did not undertake imports until July 2005 when it was given verbal instruction to import some 
essential commodities (red lentil (masur dal), onion, so yabean oil, gram, etc.) and procure locally 
(onion, gram, sugar) from the state firm BISFIC, before Ramadan to control market prices.  During 2001-05, the TCB exported raw jute, ready-made garmen ts, etc. to Egypt and the United States.  As 
per schedule I of the Rules of Business, the Ministry of Food is entrusted, inter alia,  with:  import and 
export of foodstuff and civil supplies, and procurem ent and distribution of food grains and other food 
items including sugar, edible oil, salt, etc.
58  Similarly, the Ministry of Commerce undertakes 
activities relating to purchase and supply of internal and external stores, state trading, and international commodity agreements.   In February 2006, the authorities indicated that the Ministry of 
Commerce had not undertaken any such activity. 
78. Bangladesh has not yet notified the WTO of an y state-trading activities undertaken by entities 
within the meaning of Article XVII:4(a) of the GATT 1994.  
(x) Standards and other technical regulations 
(a) Standards, testing, and certification 
79. The Bangladesh Standards and Testing Institutio n (BSTI), the national standardization body, 
formulates national standards for all products ex cept pharmaceutical products, enforces compliance 
with standards, and certifies the quality of products  for local consumption, export or import.  The 
BSTI Council, the highest decision-making organ of  the institution, consists of representatives from 
different ministries, business chambers, scientific organizations, and universities.  In November 2005, 
there were 1,870 standards in Bangladesh (1,612 in  2000), of which about 8% were compulsory;  
145 compulsory standards were in force.  Testing and certification procedures for compulsory 
                                                     
 
55 World Bank (2003b). 
56 USTC (2003). 
57 World Bank (2002). 
58 World Bank (2002). Bangladesh WT/TPR/S/168/Rev.1 
 Page 59 
 
 
standards are the same for domestic and imported pr oducts.  Bangladesh has notified the WTO of its 
acceptance of the Code of Good Practice of the WTO Agreement on Technical Barriers to Trade;  no 
further notification has been received.59  
80. The main policy objectives in the area of standards and technical regulations, as contained in 
the Industrial Policy 1999, remain the harmonizat ion of national standards with international 
standards and the adoption of intern ational standards in the field of the environment.  At present, 
some 96 Bangladeshi standards (36 in 2000) are identical to International Standardisation 
Organisation (ISO) standards, and another 23 ( 15 in 2000) are identical to International 
Electrotechnical Commission (IEC) standards (in November 2005, 126 national standards were 
adoptions of international standards (ISO, IEC, CAC, etc.)).60  Bangladesh has been a member of the 
ISO since 1974, but is not yet a member of the IE C due to funding constrai nts and its higher annual 
subscription fee;  nevertheless, the BSTI has been  a member of the IEC Affiliates Programme since 
June 2001 and, as such, has had access to IEC publications at preferential price terms.  The internationally equivalent standards in Bangladesh are mostly voluntary. 
81. The adoption of ISO 9000 and ISO 14000 certification is regarded as an essential instrument 
for Bangladeshi exporters to market their products in  foreign markets.  By 2005, 570 companies (25 at 
the time of the previous Review) had obtained ISO 9000 certificates and 20 companies had obtained ISO 14000 certificates issued by the foreign certification bodies operating in Bangladesh.  Some 12 companies remain holders of Hazard Analys is Critical Control Point (HACCP) certificates.
61  In 
order to encourage ISO 9000, ISO 14000 and HACCP accreditation, the BSTI conducts seminars and 
programmes to train auditors, and is planning to provide financial assistance to companies willing to 
obtain ISO 9000 and ISO 14000 certificates. 
82. At the time of the previous TPR, in the absence of laboratory scheme and accredited 
Bangladeshi laboratories, certificates from some multinational companies operating in Bangladesh 
were accepted in the country.  In 2002, the BSTI  Council formed a committee for the establishment of 
an accreditation body in Bangladesh under the convenor ship of a senior government official of the 
Ministry of Industries.62  This committee was to prepare guide lines for the establishment of a national 
accreditation body involving all interested parties, go vernmental and private.  The proposed national 
accreditation body will be involved in the accreditation of laboratories, certification bodies and assessors.  In February 2006, the authorities indicated to the Secretariat that a Bangladesh 
Accreditation Act, 2006 was being finalized. 
83. Bangladesh does not participate in any bilatera l or mutual recognition agreements with its 
trading partners in the areas of standards, testing, and certification.   BSTI maintains bilateral and 
international relations with other co untries and various foreign agencies.
63  It participates in the 
SAARC Standing Committee on standards, metrolog y testing and quality, which is working on 
harmonizing standards, mutual recognition agreem ents, and capacity building in the field of 
metrology.  In addition, BSTI ensures a delega tion to SAARC seminars and symposia whenever 
possible.  Quality control and information experts have been brought to the BSTI under opportunities 
offered by the UNDP.  BSTI experts attended vari ous meetings, seminars, and workshops sponsored, 
inter alia,  by APMP, CSC, INBAR, ISO, UNIDO, WTO, ITC, PORIM, PRODEC of Finland, SIDA 
of Sweden, NORAD of Norway, the EC, India. 
                                                      
59 WTO document G/TBT/CS/N/92, 28 January 1998.  
60 ISONET Communiqué No. 31, June 2003.  Availa ble at:  http://www.iso.org/iso/en/networking/ 
isonet/communique/pdf/ISONET_Communique_No_31.pdf [28 July 2005]. 
61 The HACCP guideline is administered by the Codex Alimentarious Commission, a joint FAO/WHO 
food standard programme. 
62 ISONET Communiqué No. 31. 
63 ISONET Communiqué No. 31. WT/TPR/S/168/Rev.1 Trade Policy Review 
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84. BSTI has been Bangladesh's WTO TBT national en quiry point since 2002.  It has an internal 
committee on WTO affairs and participates in the working groups on WTO agreements in the 
Ministry of Industries and Ministry of Agriculture .  BSTI is working on the implementation of the 
TBT and SPS Agreements. 
85. According to the authorities, Bangladesh l acks a national quality policy and institutional 
arrangements to provide assistance for and monitoring of quality control measures.64  The BSTI needs 
to be strengthened with adequate infrastructure a nd technical facilities and enforcement capacity for it 
to play a useful role in this regard.  They rec ognize that there is need for trade-specific initiatives to 
set up standards as per international requirements.  With support from grant facilities, the trade-related 
associations or chambers can play an important role in this regard and in helping member enterprises 
obtain internationally recognized certification such as ISO 9000. 
(b) Sanitary and phytosanitary standards 
86. Sanitary and phytosanitary standards in Ba ngladesh remain governed by the Pure Food 
Ordinance 1959, as revised by Food Safety Ordina nce 1994, the Quarantine Ordinance, and the Pure 
Food Rules.  Related activities are controlled at thr ee levels:  the Department of Public Health and 
Extension (DPHE) under the Ministry of Health, th e City Corporations under the Ministry of Local 
Government and Rural Development;  and the BSTI under the Ministry of Industries.   
87. Sanitary certificates and radioactivity test cer tificates are required for imports of food and 
edible products (Table AIII.4).  A sanitary certificate issued by the competent authority of the 
exporting country must indicate that the product is  free of injurious insects, pests, and diseases.  
Foreign certifications of radioactivity tests are also accepted in Bangladesh.  In addition, a purity test 
is conducted by the Bangladesh Council of Scientific and Industrial Research for imports of palm oil, 
olein, and refined bleached and deodorized (RBD) palm  stearine.  All expenses incurred for the tests 
are borne by importers. 
88. According to a 2005 World Bank survey, the infrast ructure that deals with  sanitary, hygiene, 
and standards-related issues (including e nvironmental issues) is extremely weak.65  This weakness 
includes the absence of adequate human resources  and technical capacity to address increasingly 
stringent global demands in standardization. 
(c) Labelling and packaging 
89. In the light of requirements in the WTO Agreements on TBT and SPS measures, a product 
labelling policy was introduced in 2004, but is awai ting the approval of the Cabinet Division under 
the Prime Minister (February 2006) to, inter alia,  ensure that no barriers are created for import (and 
export) of goods and that importe d products have proper labels.  The policy refers explicitly to 
international labelling standards to be observed in 13 sectors.66  
90. All imports are required to carry a label indicating the country of origin.  The label must also 
indicate quantity, weight, measurements, trade description, component materials, and date of 
manufacture/expiry.  Bangla or E nglish is permissible for labelli ng.  Imported goods, including their 
containers, must not bear any words or inscription of a religious connotation.67 
                                                      
64 Planning Commission (2004). 
65 World Bank (2005b). 
66 Ministry of Industries (2004). 
67 UNESCAP (2004). Bangladesh WT/TPR/S/168/Rev.1 
 Page 61 
 
 
91. For imports of food and beverages, the dates of  manufacture and of expiry must be clearly 
printed.68  Marking of the ingredients and compos ition of milk food is required in Bangla 
(Table AIII.4).  In addition, imports of milk food with fat content, and baby food must be in a tin 
container, and imports of non-fat dr ied milk must be in a bag or tin.  A measuring spoon must be 
supplied in all containers of baby food.69 
92. Labels for imports of pesticides and insec ticides, must contain information on the 
manufacture and ingredients, as well as a warning, antidote, and direction for use, in Bangla. 
93. Packaging costs for domestic items were found to be relatively high for Bangladeshi firms 
because of the import ban on cartons (withdrawn in July 2005).70 
(xi) Government procurement 
94. Government procurement has had a substantial impact on trade because of widespread 
government involvement in production and trade, though its scale has been reduced over the years 
(section (2)(ix)).  Government procurement is also used as an instrument of policy. 
95. According to the World Bank, annual public pr ocurement of goods, works, and services in 
Bangladesh is worth around US$3 billion, of which about US$2 billion is funded externally.71  
According to national sources, between 1999/00 an d 2004/05, national expendi ture for procurement 
of goods and services grew by 136%  to Tk 57.9 billion (US$940 million) or 1.6% of GDP;  during the 
same period, expenditure on pu blic construction and works rose by 31% to Tk 3.4 billion 
(US$55.4 million) or 0.09% of GDP.72  The central ministries handle very little procurement, 
essentially foodstuffs, printing, and stationery.  Th e departments under the ministries, such as the 
public works, roads and highways, and local govern ment engineering departments, handle works in 
their respective sectors.  The major share of public procurement is handled by the public sector 
corporations and semi-autonomous bodies such  as the Water Development Board, Rural 
Electrification Board, Dhaka Electric Supply Authority, Dhaka Water and Sewerage Authority (WASA), Port Authorities, etc.  Their authority to aw ard contracts, however, is very limited;  even the 
largest of them can only approve contracts under US$2 million equivalent, and the majority are under 
US$1 million.  A substantial amount of procurement is carried out by major government departments, 
such as Roads and Highways Department, Bangl adesh Railway, Local Government Engineering 
Department (LGED), Telephone a nd Telegraph (T&T) Board, Directorate of Health Services, 
Directorate of Education, etc. 
96. Following the establishment on 4 April 2002 of a Central Procurement Technical Unit 
(CPTU) within the Implementation, Monitoring and Evaluation Division of the Ministry of Planning, new public procurement regulati ons and procurement processing and approval procedures (all 
available on Internet) were prepared and passed in 2003 and 2004.
73  In July 2005, the Government 
approved a draft Public Procurement Act, based in principle on those guidelines, which is expected to 
be adopted by the Parliament in 2006.74  The draft Act has provisi ons for penalties for violators 
                                                      
68 The date of expiry is not required for imports of wine or liquor. 
69 USTC (2003). 
70 World Bank (2005b). 
71 World Bank (2002). 
72 Ministry of Finance (2005a). 
73 CPTU online information.  Available at:  http://w ww.cptu.gov.bd/CPTU.ASPX [3 November 2005];  
Central Procurement Technical Unit (2003);  Central Procurement Technical Unit (2004a);  and Central 
Procurement Techni cal Unit (2004b). 
74 The Financial Express,  11 July 2005.  Available at:  http://financialexpress-bd.com/index3.asp?cnd= 
11/7/2005&section_id=5&newsid=5940&spcl=no. WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 62 
 
 
(including a ban on delinquent suppliers or contractors).75  Prior to the introduction of the Public 
Procurement Regulations, there were no nationall y applicable, uniform, comprehensive procurement 
regulations or procedures;  these Regulations, whic h were published with immediate effect in the 
Official Gazette  on 1 October 2003, are now being used uniformly throughout the country for both 
development and non-development procurement of  goods, works, and services by all procuring 
entities of the public sector, including SOEs.  The policy objective under the 2003 reforms is, 
inter alia,  to:  ensure procurement is conducted in th e most efficient manner possible;  encourage 
competition between persons and/or firms;  ensure that all persons and firms in the public sector are 
treated equally;  ensure that public sector procur ement is implemented fairly and openly;  improve 
business opportunities within the country;  and ensu re that public procurement promotes value-for-
money. 
97. The CPTU is responsible for policy formulati on, coordination, monitoring, and improvement 
of public procurement in Bangladesh.  It also  monitors compliance with the regulations and 
procedures, and proposes any amendments, new laws or regulations.  The role of the CPTU is restricted to advising procuring entities on how th e regulations and procedur es should be implemented 
without diminishing their responsibilities;  it shoul d not have any involvement whatsoever in the 
proceedings leading to examination, evaluation, and/ or award of contract concerning individual and/or 
specific procurement.  It prepares standard format s, documents, user guides, and instructions in 
connection with public procurement as an Annua l Report regarding the overall functioning of the 
public procurement system.  The CPTU , which operates a website covering, inter alia,  information on 
public procurement opportunities, provides technical assistance in the field of public procurement by 
issuing technical guidance notes on procurement. 
98. The key ministries and divisions responsible for making procurement policies are:  the 
Cabinet Division under the Prime Minister, the Ministry of Finance, the Ministry of Planning, the 
Implementation Monitoring and Evaluation Divi sion (IMED), the Economic Relations Division 
(ERD), the Ministry of Commerce, and the Ministry of Establishment.
76  Most ministries and 
divisions handle procurement th rough their departments or subordi nate bodies, corporations, etc.77  As 
discussed earlier (section 2(ix)), the Ministries of Food and Commerce handle procurement centrally.  
The Department of Supply and Inspection remains th e main organ of the Ministry of Commerce for 
procurement of stores for:  the Ministry of Esta blishment's printing and stationery, Ministry of 
Information's mass communications, press, and publica tions, the Ministry of Livestock (other than 
bank financed projects), and the Department of Films and Archives. 
99. Since independence, the highest level pr ocurement committee has been the Cabinet 
Committee on Government Purchase.78  This committee decides all procurement for amounts over 
Tk 250 million (about US$5.1 million, taking Taka 49 as US$1), other than consultancy services.  The 
committee decides consultancy services procuremen t above Tk 50 million (about US$1.02 million).  
Its decision or recommendation is subject to approval by the Prime Minister.  The next level of 
committee or approving authority is the Ministry (at the level of Minister), followed by the purchase 
committees of the departments or the boards of the corporations or autonomous bodies. 
                                                      
75 The Financial Express , 21 February 2006. 
76 World Bank (2002). 
77 World Bank (2002). 
78 It is composed of the Ministers of Finance, Ed ucation, and Water Resource;  as well as appointed 
members from the Ministries of Commerce and Industries, Post and Telecommunications, Housing and Works, Civil Aviation and Tourism and other concerned ministries.  World Bank (2002). Bangladesh WT/TPR/S/168/Rev.1 
 Page 63 
 
 
100. The 2003 regulations contain conditions for th e use of five procurement methods:  open 
tendering79;  restricted tendering80;  direct procurement81;  two-stage tendering82;  and request for 
quotations.83  Each procuring entity is responsible for advertising directly all Invitations for Pre-
Qualification (IFPQ), Invitation for Enlistment,  Invitations for Tender (IFT) and Requests for 
Expression of Interest (EOI) for goods and related services, works and physical services, and 
intellectual and professional services.  Advertisemen ts must appear in at least one Bangla language 
national newspaper and one Englis h language national newspaper, bot h with wide daily circulation 
within Bangladesh.  If the procuring entity has a website , all invitations must also be advertised there. 
101. A voluntary domestic preference of 15% of the delivered price for goods and 7.5% of the 
contract price for works was introduced under the 2003 regulations, to provide local manufacturers 
and suppliers with a "price advantage" over intern ational competitors, to promote domestic products 
and/or industries;  the procuring entity may decide whether to apply this preference.  A tenderer may 
bring a complaint only to a Review Panel. 
102. The procurement procedure for development proj ects financed by bilateral or multilateral 
donors follows different guidelines, as laid down by th e donors.  Local bidders are not granted price 
preferences.  Suppliers are allowed to deploy any flag vessel from any eligible source country in case 
of CRF or c.i.f. contracts;  for f.o.b. contracts they  seem to be restricted to the use of Bangladesh flag 
vessels with a view to protecting the interests of Bangladeshi shipping companies, namely the state-
owned Bangladesh Shipping Corporation.84  If a Bangladesh flag vessel is not available, the buyer 
may obtain a waiver from the Director General, Shipping.  In cases of direct procurement, public 
sector agencies have recently been required to bu y products from a state-owned enterprise (e.g. 
BSEC) without tendering.85 
103. Most bidding documents and contracts have pr ovision for dispute settlement in accordance 
with provisions of International Chamber of Comme rce (ICC) Arbitration Rules or the United Nations 
Commission on International Trade Law (UNCITRAL).  The venue for arbitration is generally Dhaka. 
                                                      
79 For goods and related services, and works and ph ysical services, unless the threshold level or a 
specific requirement makes one of the other methods more appropriate. 
80 Used when (a) specialized goods and related servi ces or works and physical services are available 
only from a limited number of suppliers  or contractors;  and (b) the time and administrative cost of receiving, 
examining and evaluating a large number of tenders would be disproportionate to the value of the goods, works, 
or services to be procured.  The thresholds applicable to this method are Tk 500,000 (goods and physical 
services) and Tk 1 million (works). 
81 Used, inter alia,  for technical or emergency reasons, for additional goods (including essential food 
items), works or services extending a completed contract or additing to an ongoing or new contract.  The value 
of the additional goods may not exceed 15%  of the original contract value or Tk 50 million, whichever is lower;  
the value of the additional works, ma y not exceed 15% of the original c ontract value or Tk 200 million, 
whichever is lower;  the value of new works, which ar e a repetition of similar works, may not exceed 15% of the 
original contract value or Tk 200 million, whichever is lower;  and the value of the additional services shall not exceed 15% of the original contract va lue or Tk 20 million, whichever is lower.  In all cases the additional 
procurement may be used once only.  The thresholds for using this method for procurement of "ready available 
standard low value goods and unforeseen urgent services are:  less than Tk 15,000 for goods;  and less than 
Tk 50,000 for unforeseen urgent services. 
82 Used for large or complex contracts of goods and related services and/or works and physical 
services, such as turnkey contracts for manuf acturing process plants or industrial plants. 
83 For the purchase of readily available, standard , off-the-shelf goods and related services, physical 
services and low-value simple works, provided the estim ated value of such procur ement does not exceed the 
prescribed threshold value.  Thresholds are Tk 200,000 for procurement by procuring entities in Bangladesh, 
and Tk 500,000 for procurement undertaken overseas by a Bangladesh High Commission, Embassy or Mission. 
84 World Bank (2002). 
85 World Bank (2003b). WT/TPR/S/168/Rev.1 Trade Policy Review 
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104. Each government agency and public sector corpora tion or board has its own set of procedures.  
By and large, they follow the open bid syst em, which includes advertisement in the press, 
prequalification if appropriate, formal biddi ng and contract documents , bid and performance 
securities, public bid opening, evaluation of bids , and award to the lowest (evaluated) bidder.86  The 
majority of public procurement is externally funded and follows the procedures mandated by the 
development partner. 
105. Prior to the introduction of the 2003 regulatory ch anges, public sector procurement seems to 
have suffered from systemic deficiencies, in cluding opaque procurement practices, outdated 
procurement rules and procedures, inadequate mana gement capacity, and lack of transparency and 
accountability mechanisms.87  Annual economic losses due to pr ocurement-related corruption and 
delays were estimated to range  between US$300 million and US$450 million. The implementation of 
the procedures was very uneven and substantial dela ys occurred in most procurement.  A 2002 survey 
identified problems such as poor advertising, s hort bidding period, poor specifications, non-disclosure 
of selection criteria, award of contract by lottery , one-sided contract docum ents, negotiation with all 
bidders, rebidding without adequa te grounds, other miscellaneous irregularities, corruption, and 
outside influence.88  
106. Bangladesh is not a signatory to the WT O Plurilateral Agreement on Government 
Procurement.  
(xii) Local-content schemes 
107. The Export Policy 2003-2006, as well as previous orders, explicitly encourages, but does not 
require the use of local raw materials, with a vi ew to establishing backward linkage industries, in 
particular in textiles and clothing, Bangladesh's la rgest export.  The granting of cash incentives for 
exports of certain items (including local fabrics,  bicycles, agri-processed items), a higher currency 
retention quota, and eligibility for the duty drawback and special bonded warehouse schemes (at least 
25% domestic content) are all linked to lo cal-content or local value-added conditions 
(sections (3)(viii), (3)(ix) and (3)(xi)).  Under E xport Policy 2003-2006, incentives are to be provided 
for exports of non-conventional a nd new industrial products;  to benefit from these incentives, local 
value added must be at least 40% for the fi rst two years and 50% in subsequent years.89  
108. Bangladesh has not notified these measures under the relevant provisions of the WTO 
Agreement on Trade-Related Investment Measures.  
(xiii) Anti-dumping, countervailing, and safeguard measures90 
(a) Anti-dumping and countervailing measures  
109. The Finance Act of 1995 introduced regulations  and procedures for examining dumping and 
subsidy complaints, by amending S ection 18 of the Customs Act, 1969.  The legislation was passed to 
bring the provisions on anti-dumping and counterva iling actions into conformity with the WTO 
Agreements on Implementation of Article VI of  the GATT 1994 and on Subsidies and Countervailing 
Measures.  The Bangladesh Tariff Commis sion (BTC) conducts du mping and subsidies 
investigations. 
                                                      
86 They generally follow the lines of the World Bank Guidelines for International Competitive Bidding 
(ICB). 
87 World Bank (2003a). 
88 World Bank (2002). 
89 Export Promotion Bureau (undated), para. 9.7.1. 
90 No comments were provided by the authorities on this section. Bangladesh WT/TPR/S/168/Rev.1 
 Page 65 
 
 
110. An application for an investigation, whethe r for an anti-dumping or countervailing measure, 
must be made in writing to the BTC by or on behalf of a domestic industry.  The BTC must terminate 
the investigation within one year of issui ng public notice, and submit its findings and 
recommendations to the Government.  Provisional an ti-dumping or countervailing duties, no greater 
than the margin of dumping or of the subsidy rates,  may be imposed within 60 days of initiation and 
applied for a period of six months , extendable by three months. 
111. The final findings must be available within one  year of the date of initiation.  Imposition of 
the final duty is made by notification in the Official Gazette .  Final measures may be taken for a 
period of five years from the date of imposition;  however, the Government may renew the duty for a 
further five years, upon review, if it is believed th at there would be continued injury.  If the initial 
five-year period expires while a review is in prog ress, the anti-dumping duty can be extended for a 
maximum of one year. 
112. Appeals against an anti-dumping or countervaili ng duty can be made to the Customs, Excise 
and Appellate Tribunal, under Section 196 of the Customs Act, 1969, and must be filed within 
90 days of the imposition of the duty.   
113. No investigations have been initiated on anti-dumping or countervailing measures since the 
previous Review of Bangladesh.  At that time, a number of local producers had complained that trade 
liberalization in recent years had helped foreign suppliers to sell their products in Bangladesh.  In 
some cases, they alleged that foreign suppliers, many from the region, were resorting to "unfair" trade 
practices in the form of dumping or subsidized e xports, thus threatening the existence of local 
industries.  However, lack of technical experti se and financial resources both by the administration 
and industries, as well as lack of authenticated da ta essential for submission of application, made it 
difficult to initiate investigations.   
(b) Safeguards actions 
114. A provision on safeguards was introduced in 1997 by amendments to Section 18 of the 
Customs Act, 1969.  However, rules regarding im position of safeguard measures have not yet been 
prepared.91   
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Registration and documentation  
115. All exporters, except those in export processi ng zones (EPZs), are required to obtain an 
Export Registration Certificate (ERC) from the CCIE .  The documentation required for an ERC is the 
same as for an IRC.  
116. The Export Policy 2003-2006 simplified export procedures by allowing export without a 
letter of credit (L/C) to proceed on the basis of  a purchase contract, agreement, purchase order or 
advance payment.92  Exports of all kinds of products are allowed without L/C on the basis of 
consignments or advance cash payments.  Other documents required for export transactions include 
the EXP Form (issued by the execu ting bank), invoice, packing list, and bill of lading/airway bill.  
Additional export certificates may be required for certa in products (Table III.8).  According to the 
                                                      
91 The WTO Agreement on Safeguards permits a count ry to restrict imports of a product for a 
temporary period, either by increasing the applied duty rate above the binding level, or by imposing quantitative 
restrictions.  However, Bangladesh has bound only a few (non-agricultural) tariff lines. 
92 Export Promotion Bureau (undated), paragraph 9.38.1. WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 66 
 
 
authorities, the number of signatures required on the manual customs export form has declined from 
38-42 at the time of the previous Review to about 5-7. 
Table III.8 
Certificates required for export  
Product Certificate or permit Issuing ministry or agency 
Any product as required by the importing country Certificate of origin Export Promotion Bureau or Chamber of Commerce 
and Industry 
Frozen fish Health-cum-quality certificate  Department of Fisheries 
Goods of plant origin Quarantine ce rtificate Ministry  of Agriculture 
Tea Export authorization Tea Board 
Pharmaceutical products No objection certificate Drugs Administration 
Goods for international fairs or exhibitions No objection certificate Export Promotion Bureau 
Jute Export price cert ificate Bangladesh Bank 
Goods for repair Export permit CCIE 
 No objection certificate Bangladesh Bank 
Ready-made garments GSP certif icate Export Promotion Bureau 
Live wild animals Export permit CCIE 
 No objection certificate Chief Conservator of Forest 
Note: No comments were provided by the authorities on the content of this table. 
Source:  WTO (2000), Trade Policy Review:  Bangladesh,  June, Geneva.  
(ii) Quality control and export clearance 
117. Quality control licences are required from the Mi nistry of Commerce and the NBR for certain 
export products;  however, no list of the products concerned nor other info rmation were available 
from the authorities. 
118. The Export Policy 2003-2006 recognizes the need  for high and acceptable quality export 
products and that any deviation from this will weaken Bangladesh's position in export trading.93  The 
authorities indicate that measures have been taken to  ensure observance of sanitary and phytosanitary 
standards and working conditions at fish and other food processing plants, as well as to upgrade testing laboratories in the country. 
119. Permission is required from the Ministry of Sh ipping for each export shipment.  A waiver 
may be granted for the shipment of certain goods, or upon approval of application by the Ministry 
(Chapter IV).
94  
120. According to a World Bank report Bangladeshi exporters' transport and processing costs are 
relatively high compared with five other countries in Asia.95  Bribes and related unofficial fees seem 
to account for 10% of the cost of exporting.  The time necessary just to "negotiate" and process the 
bribes is estimated at between half a day and one-and-a half days.  In very competitive and 
time-sensitive industries, such as the global textile a nd garment industry, this can mean the difference 
between acceptance or rejection of an order and the loss of hundreds or thousands of jobs.  The 
authorities indicate that the processing of export documents takes only three hours, as export (and 
import) procedures at Customs Houses have be en automated;  customs clearance of export 
consignments takes less than 30 minutes.  At the time of the previous TPR, it took on average 
seven days, but up to 30 days, to complete documen tation requirements, and a further nine days, but 
up to a maximum of 75 days, to obtain customs clearance for shipment.  
                                                      
93 Export Promotion Bureau (undated). 
94 Export Policy 1997-2002, para. 8.26. 
95 World Bank (2005b). Bangladesh WT/TPR/S/168/Rev.1 
 Page 67 
 
 
(iii) Export taxes, charges, and levies 
121. No product-specific taxes, charges or levies seem  to affect exports.  A tax at source on all 
export earnings remains at 0.25% (section (3)(x)). 
(iv) Minimum prices and price controls96 
122. Apparently, minimum export prices on raw jute continue to be set by a committee in the 
Ministry of Textiles and Jute;  the committee comprises representatives of the Bangladesh Bank, 
Bangladesh Jute Corporation, Bangladesh Jute Association, and Bangladesh Jute Exporters 
Association.  According to the authorities, these pr ices are indicative, not mandatory.  However, jute 
exporters are required to obtain an Export Price Certificate, a permit to export raw jute below the 
export prices set by the committee, from the Bangladesh Bank.  
(v) Export prohibitions and restrictions 
123. Goods subject to export prohibition are listed in the Export Policy 2003-2006;  the number of 
goods has been reduced from 19 to 16 since the previous Review (Table III.9).  According to the 
authorities, the bans on exports of agricultural commodities and manufactured goods are in place 
mainly for reasons of health, eco-balance, security, archaeological value, or maintenance of adequate 
domestic supply. 
Table III.9 
Export prohibited items 
Product description 
(i)  Under the Export Policy 2003-06 
Petroleum and petroleum products except napht ha, furnace oil, lubricant oil and bitumen.   Prohibition not applicable to the exp ort of 
petroleum and LNG by foreign firms operating in Bangladesh under production-sharing contr acts to the extent of their share as a greed 
Jute seeds and shan seed 
Wheat 
Live animals, all sorts, and skins of animals and wild life c overed in the Bangladesh Wild Life (preservation) Ordinance, 1973 
(President's Ordinance No. XXIII of 1973, as amended in 1974) except the species listed in the First Schedule of the Ordinance 
Firearms, ammunitions, explosiv es, and ingredients thereof 
Fissionable/radioactive materials 
Rare archaeological items 
Human skeletons, blood plasma or any othe r material produced out of human blood 
Pulses, all sorts 
Unfrozen and unprocessed prawns and shri mp (S.R.O. No. 60-L/76, dated 14.2.76) 
Onions (S.R.O. No. 250-L/77, dated 13.8.77) 
Deer of both genders, and saline water shri mp of 71/90 counts or below except "harina" and "chaka" variety, and fresh water shr imp of 
61/70 counts or below (S.R.O. No. 345-L/83, dated 20.10.83) 
All kinds of bamboo/cane/wooden powder (oth er than handicrafts made of these) 
Frogs of all species (live or dead) and frog legs 
Chemicals included in Schedule 1 of the Ch emical Weapons Convention of the United Nations signed in Paris on 13-15 January 1993  
Raw hides and wet blue leather 
(ii)  Items removed from the previous Export Policies since 1993  
All imported goods in their original or unprocessed form  
Ferrous and non-ferrous metals and scraps thereof  
Foodgrains including rice products and flour products  
Table III.9 (cont'd) 
                                                      
96 No comments were provided by the authorities on this section. WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 68 
 
 
Product description 
Milk and milk products  
Maps and charts except:  (a) unclassified ma ps of scale smaller than 1/4 inch or 1/ 250,000 scale;  (b) educational and scientif ic charts;  
and (c) guide maps and relief maps  
Beef, mutton, and animal fats  
Green coconuts, coconuts, and copra  
Eggs and poultry (SRO No. 365- L/75, dated 1 November 1975)  
Feature films not certified by the Bangla desh Film Censorship Board as fit fo r export (SRO No. 174-L/76 dated 24 May 1976)  
Oil cake  
Oil seeds and edible oil except kapok seeds.  However, edible o il processed/refined in the country out of oil seeds and crude o il 
imported for export purpose may be exported subject  to permission of the Ministry of Commerce 
Rice bran (except de-oiled rice bran) 
Molasses and khandseri sugar  
Source:  Various Export Policies, including 2003-2006.  
124. The overall ban on exports to Israel remains in place. 
125. Exports of urea fertilizer produced at the state-owned Khanaphuli Fertilizer Company 
(KAFCO) plant remain restricted and subject to permission from the Ministry of Industries.97 
126. Re-exports (i.e. export of imported goods in their original or unprocessed form) remain 
banned.  However, if the re-export price is 5% highe r than the imported price, this is considered as 
entrepôt trade;  no changes in qua lity, volume, size, etc. are required.98  Re-exports are allowed when 
there is at least 10% value addition (5% during 1997 to  2002) and change in the quality or size of the 
product or in both. 
(vi) Export licensing 
127. There are no export licensing requirements per se , although an export certificate may be 
required from the relevant authorities fo r certain products (Table III.8).   
(vii) Voluntary restraints, surveillance, and similar measures 
128. Until the termination of the transitional process under the Agreement on Textiles and 
Clothing (ATC) at the end of 2004, the authorities m onitored certain exports of textiles and clothing 
to Canada and the United States (Chapter IV). 
(viii) Export subsidies and other financial assistance 
129. Direct subsidies in the form of cash incentives tied to local-content requirements 
(section (2)(xii)) have been provided to exporters of  textiles and garments a nd of other products to, 
inter alia,  help promote export diversification while usi ng locally produced inputs (Table III.10, and  
section (2)(xii)).  The authorities i ndicate that these cash subsidies are to cover the costs of handling, 
processing, upgrading, and freight charges (domestic a nd international transport)  and/or in lieu of duty 
drawback and bonded warehouse facilities.  Liquid gl ycose produced in an export processing zone is 
eligible for a 20% cash incentive.  Total outlay fo r cash incentive subsidies ranges from Tk 6.6 billion 
(2003/04) to Tk 7.9 billion (2000/01);  in 2004/05, it was Tk 7.5 billion, and granted mainly for local 
fabrics (56%), frozen shrimp (23%), a nd jute products (13%) (Table III.10).  
                                                      
97 Export Promotion Bureau (undated). 
98 Entrepôt and re-export trade are carried out un der procedures laid down in Public Notice 42, 
28 June 2005. Bangladesh WT/TPR/S/168/Rev.1 
 Page 69 
 
 
Table III.10 
Export incentives, 2000-05 
(a) Cash incentives for exports 
Commodities FE Circular of Bangladesh Bank Cash incentive 
Frozen shrimp and other fish FE No. 23, 12/12/2002;  No. 07, 30/08/2004;  
and No. 06, 06/06/2005 10% 
Products made of Hoogla, straw, coir of sugar cane 
(a) local raw materials more than 80% 
(b) local raw materials more than 50% FE No. 26, 12/12/2002;  No. 10, 22/11/2004;  
and No. 06, 06/06/2005  
(a) 20% 
(b) 15% 
Bicycles (Minimum local value addition requirement – 40%) FE No. 27, 12/12/2002;  No. 09, 22/11/2004;  
and No. 06, 06/06/2005 15% 
Crushed bone FE No. 25, 12/12/2002;  and No. 06, 
06/06/2005 15% 
Agri and agri-products (vegetables/fruit) and agri-processing 
(a) Agri (vegetables/fruit) 
(b) Agri-processing 
 (i) local material at least 80% 
 (ii) local material at least 70% FE No. 15, 06/10/2005  
30% 
 
(i) 30% 
(ii) 20% 
Local fabrics (includi ng handloom fabrics) 
- 2002-2003 
- 2003-2004 
- 2004-2005 - 2005-2006 (Local value addition requirement  – as per import policy order) FE No. 08, 04/03/2001;  No. 09, 05/03/2001;  
No. 10, 05/06/2002;  No. 07, 03/06/2003;  and 
No. 13, 03/08/2005  
15% 
10% 
5% 5% 
Jute products FE No. 25, 18/10/2001;  No. 19, 12/08/2002;  
No. 13, 05/11/2003;  No. 08, 03/11/2004;  and 
No. 06, 06/06/2005 7.5% 
Leather products FE No. 28, 01/11/2001;  No. 15, 18/07/2002;  
and No. 06, 06/06/2005 15% 
Tobacco FE No. 14, 22/11/2003;  and No. 06, 
06/06/2005 10% 
Potato FE No. 01, 28/01/2004;  and No. 06, 
06/06/2005 20% 
Hatching eggs and day old chicks of poultry industries FE No. 11, 18/07/2005 25% 
Liquid glucose produced at Iswardi EPZ FE No. 18, 08/12/2005 20% 
 
(b) Disbursement by commodity, 2000-05 
 (Tk million) 
Commodities 2000-01 2001-02 2002-03 2003-04 2004-05 
Local fabrics 6,884.9 5,930.6 6,175.0 4,462.1 4,200.0 
Leather products 110.5 69.4 135.0 197.9 365.0 
Frozen shrimp and other fish .. .. 500.0 1,250.0 1,730.0 
Product made of Hoogla, straw, coir of 
sugar cane .. .. 3.6 11.5 10.0 
Crushed bone .. .. 0.5 2.3 2.8 
Agri and agri-processing .. .. .. 7.7 100.0 
Bicycle .. .. .. .. .. 
Jute products 950.0 1,300.0 850.0 700.0 1,000.0 
Tobacco .. .. .. 9.2 100.0 
Potato .. .. .. .. 1.6 
Total 7,947.6 7,300.0 7,664.1 6,640.7 7,509.4 
.. Not available. 
Source:  Export Promotion Bureau (undated), Export Policy 2003-2006 .  Available at:  http://epb.gov.bd/export_policy.htm 
[14 June 2005];  and Bangladeshi authorities.  WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 70 
 
 
130. Export Policy 2003-2006 provides for the pr ogressive, three-stage phase-out (originally 
scheduled to end in 2004/05) of th e cash incentive for local fabrics (Tab le III.10);  as a result, the rate 
of the incentive dropped from 25% of the export va lue (at the time of previous Review) to 5%.99 
(ix) Duty concessions 
131. Apart from concessionary duty rates for the impor tation of capital machinery and spare parts 
(6% for industries, and duty free for 100% export-oriented industries (section (2)(iv)(h)), export-oriented industries have access to the duty draw back system and special bonded warehouses whereby 
customs duties and value-added taxes paid on imports  of inputs used in the manufacture of finished 
products are refunded or exempted (Box III.1).  Th ey are also entitled to import duty-free samples 
(within specified limits) related to the manufac ture of exportable products, provided clearance is 
obtained from the Export Promotion Bureau.
100 
Box III.1:  Export-oriented industr ies:  definition and support 
Export-oriented industrialization remains one of the ma jor objectives of Banglades h's economic policy, and  
export-oriented industries continue to be given priority for government support. 
Export-oriented industries were defined in the Industrial Policies 1999 and 2005 and the coverage was 
widened in the Export Policy 1997-2002. 
Incentives and facilities available to export-oriented indu stries are listed in the Industrial Policies 1999 and 
2005 as well as the Export Policy 2003-2006.  They are in addition to the general incentives available to all 
industries (section (4)(iii)). 
The Export Policy 2003-2006 maintains the extension of  those incentives and facilities for export-oriented 
industries to enterprises that export  80% of their products.  Industries  exporting their total production are 
eligible for additional incentives and facilities and may also sell 20% of any goods rejected for export on the 
local market, subject to payment of usual duties and taxes. 
Furthermore, the Export Policy 2003-2006 identifies, highest priority sectors (high export potential) and 
special development sectors (export potential but weak production), which are considered as thrust sectors 
(section (4)(iii)) under Industrial Policy 2005.  High priority sectors comprise:  software & information 
communication technology products;  agri-products and agri-processing products;  light engineering products 
(including auto-parts and bicycles);  leather produc ts;  and high priced ready-made garments.  Special 
development sectors comprise:  pharmaceutical products ;  cosmetics and toiletries;  luggage and fashion 
goods;  electronic products;  cold rolled (CR) coil;  cards and calendars;  stationery products;  silk cloths;  
handicraft;  and herbal medicines and medicinal plants.  Incentives and facilities available for these sectors 
include:  project loans with lower interest rate on prio rity basis;  income tax exemptions;  cash assistance;  
export loans on easy terms and lower interest rates;  air transport facilities with exempt ed transport fares;  tax 
return/bond facilities,  etc.  
Export Policy 2003-2006 is applicable in areas other than the export processing zones (section (3)(xii)) 
Note:  No comments were provided by the authorities on this box. 
Source:  WTO (2000), Trade Policy Review:  Bangladesh , June, Geneva;  Export Promotion Bureau 
 (undated), Export Policy 2003-2006 ;  and Industrial Policy 1999 and 2005. 
                                                      
99 Export Promotion Bureau (undated);  and Ministry of Finance (2005b). 
100 The ceilings for duty-free imports of samples, set by Import Policy Order 2003-2006 (para. 13.2) 
are:  100 samples, with not more th an 20 in each category, per year for the garments industry;  100 pairs per 
year for the mechanized shoe industry;  100 tanned leather samples for tannery industry;  and US$5,000 
(US$1,000 at the previous Order) for other export-oriented manufacturers.  Prior permission and an import permit must be obtained from the CCIE to import samples in excess of the ceilings. Bangladesh WT/TPR/S/168/Rev.1 
 Page 71 
 
 
(a) Duty drawback schemes 
132. The 100% exporters who do not enjoy bonded warehouse facilitie s are entitled to a drawback 
for the duties and taxes paid on imports of raw mate rials, once the product is exported.  There appear 
to be three types of duty drawback:  flat-rate drawback, whereby the rate is pre-set by the 
Government;  actual-rate drawback, whereby the duties and taxes actually paid on imports are 
reimbursed;  and adjustment (through an  "Account Current System") drawback.101  When no flat rate 
is readily available, especially when the item is new,  drawback is paid under the actual rate system.  
All three schemes are administered by the Du ty Exemption and Drawback Office (DEDO) and 
"functional commissionerates", both under the NBR.  "Deemed" exporters, i.e. local firms supplying 
inputs to 100% direct exporters, are also eligib le for these schemes.  Under the flat-rate scheme, 
refunds may in some instances exceed the import dut y and taxes actually paid;  in such cases, the 
excess could constitute a subsidy to exporters.102  Export subsidization may also arise to the extent 
that "deemed" exporters are granted cas h assistance as well as duty drawbacks. 
133. At the time of the previous Review most draw back claims were under the flat rate system, 
which is simpler to administer.  Flat rates were  estimated by the DEDO on the basis of input-output 
coefficients, calculated for a representative sample of  firms from the relevant industry.  The flat rate 
schedule lists the fixed import duty and value-added tax for about 1,292 items.103  The rates are 
reviewed and updated at regular intervals. 
134. The authorities indicate that the drawback procedure is now partially automated and claims on 
flat rates are settled quickly.  Reasonable time is required for claims on new items because the input-
output coefficient is calculated manually.  Submitted documents are verified to make sure that the 
duty paid on raw material is equal to the drawback amount.  It is also necessary to verify whether the 
foreign currency has been realized through Bangl adesh Bank to ensure the export is effected.  
According to other sources, despite various a ttempts to improve the DEDO's performance, its 
governance remains weak, and it is inef ficient in disbursing rebates, as reflected in significant delays 
in reimbursements.  Reportedly, this is partly du e to the complexity of the import duty regime, and a 
very lengthy duty drawback process involving the dete rmination of input-output coefficients and the 
submission of 18 or more  documents by exporters.104 
135. According to the authorities, claims under the fl at rate are usually settled in a week.  For 
16 items quick disbursement, payments are made di rectly to the exporter's bank account immediately 
upon receipt of foreign exchange against the export.105  However, the minimum time required for 
refunds remains six months or more, and refunds  received are well below 100% of actual payments.106  
Such long delays and additional costs could help to explain exporters' apparent preference for special 
bonded warehouses rather than the drawback system.  The authorities indicate that relatively more 
time is needed to settle drawback claim on new ex ported items because exporters have to submit all 
relevant documents against paym ent of duty and taxes on imported raw materials along with export 
documents to ensure that the foreign currenc y has been realized through Bangladesh Bank. 
                                                      
101 Export Policy 1997-2002, para. 8.2.9. 
102 The authorities indicate that flat rates are genera lly fixed on the basis of the average price of raw 
materials. 
103 The schedule included 205 items in 1991, 720 items in 1995 and 1,000 items in 2000 (GATT 1992;  
and GATT document BOP/323, 21 February 1995). 
104 IMF (2005b).   
105 Export Policy 1997-2002, para. 8.2.4. 
106 World Bank (2005b). WT/TPR/S/168/Rev.1 Trade Policy Review 
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(b) Special bonded warehouses107 
136. Special bonded warehouses (SBWs) allow 100% ex porters and "deemed" exporters to import 
and stock inputs duty free.  The warehouse facility is administered by the NBR, which issues a licence 
to operate an SBW and monitors the inventory th rough the use of import and export passbooks and a 
pre-tabulated input-output system.  SBWs have been a critical factor in the development of 
Bangladesh's garment exports (Chapter IV). 
137. Bonded warehouse facilities remain available for import-dependent export-oriented industries 
and deemed exporters.  According to Export Po licy 2003-2006, bonded ware house facilities were to 
be reduced gradually to encourage composite knit/ hosiery textiles and garments units to use more 
local raw materials.  The Export Policy also st ates that, under certain conditions, trading houses, 
export houses, and other such approved organiza tions were to benefit from the bonded warehouse 
facilities  At the time of the previous Review, some  leather, toy, and jewe llery exporters (i.e. non-
garment industries) had started to use the SBWs, but around 90% of users were still 100% garment 
exporters.  
(x) Tax concessions 
138. Under the Income Tax Ordinance, a 50% rebate  is provided on taxable income generated 
from any export business.  The total export earnings of  handicraft and cottage industries are exempted 
from income tax, which is imposed at 5% to 10% depending on the volume of production. 
139. Like other eligible industrial enterprises, expor t-oriented industries are accorded a tax holiday 
of five to seven years (section (4)(iii)).  Some liste d industrial undertakings are eligible for four to 
six years of tax holiday and are exempt from deduction of tax at source (subject to application), which 
remains at 0.25% on all export earnings.108  All 100%-export-oriented RMG industries are subject to 
the 0.25% tax at source if not enjoying a tax holid ay.  This is deemed as final settlement of tax 
liability.  Industrial units ineligible for tax ho lidays may receive accelerated depreciation allowances 
at 100%. 
140. To maintain price competitiveness for export products, VAT rebates are granted on a number 
of export-related services.  For instance, VAT can  be refunded on export support services, i.e. C&F 
(clearing and forwarding) customs brokers' services, telephone, telex, fax, gas/electricity bills (80% 
refund), WASA bills (60% refund), insurance premiums, shipping agent's commission/bills.109  VAT 
paid on jute clothes and bags used in the packing of export goods is also refundable.  In 2005, the 
authorities were to introduce a VAT exemption on rice, chemical fertilizer and insecticides, 
fungicides, pesticides, anti-sprouting products, plant gr owth regulators and disinfectants to be used in 
agriculture, at the trade level;  no information was provided by the authorities on this matter.110  
(xi) Currency retention scheme 
141. Exporters can deposit and retain a certain amount  (percentage) of their f.o.b. export earnings 
in foreign currency under a retention quota in th eir foreign currency account in the form of 
U.S. dollars, pounds sterling, Japanese yen or euros.  The ceiling for foreign currency retention, which 
is fixed by the Government/Bangladesh Bank, has been increased gradually:  20% under Export 
Policy 1993-95, and 40% since Export Policy 1995-97.   Under EP 03-06, the ceiling was set at 10% 
                                                      
107 No comments or requested information were pr ovided by the authorities on this section. 
108 Export Promotion Bureau (undated). 
109 Export Promotion Bureau (undated). 
110 Ministry of Finance (2005b). Bangladesh WT/TPR/S/168/Rev.1 
 Page 73 
 
 
of f.o.b. earnings for lower value-added products (like RMGs made of imported fabrics, naphtha, 
furnace oil and bitumen, electronic goods, etc.), a nd at 50% for high value-added products (like 
computer software and data entry/processing service, etc.).111  At the time of the previous Review, the 
authorities indicated that the higher retention quot a allowed for exporters with low imported input 
components is intended to encourage exporters to u se more locally available inputs.  Exporters of 
services, such as legal advice, consultancy, and si milar professional services, can retain 5% (as in 
2000) of their repatriated income in a foreign curre ncy retention quota account.  This foreign currency 
can be used by the exporters to fulfil bonafide bus iness needs like business trip s abroad, participation 
in export fairs or seminars in foreign countries, im port of raw materials and spare parts, and setting up 
office abroad.   
(xii) Export processing zones 
142. The Bangladesh Private Export Processing Zon es Act, 1996, allows the establishment of 
private EPZs, in which factories and other facilities are built by private investors, instead of being leased from the Government.  The Bangladesh E xport Processing Zones Authority (BEPZA) is the 
sponsoring agency that approves all projects located in public EPZs.  The BEPZA provides 
infrastructure facilities, administ ers tax incentives, issues work permits for foreign nationals, and 
administers labour matters for all enterprises in the EPZs.  The establishment of two private EPZs was 
authorized some time ago, but are not yet in opera tion (February 2006);  these EPZs are to be run by a 
cell at the Prime Minister's Office.  Formation of  labour unions and strikes within EPZs has not been 
allowed.  A Workers Association and Industrial Re lations Act (Act No. 23 of 2004), effective as from 
18 July 2004, makes provision for recognizing and enforcing labour rights in the EPZs.    
143. Three types of investment are permitted in EPZs, 100% foreign-owned,  foreign-local joint 
ventures and 100% locally owned;  all receive equa l treatment.  Industrial units located in the EPZs 
must export at least 90% of their production, i. e. they can sell a maximum of 10% on the domestic 
market upon payment of import duties and other taxes.  They are also permitted to purchase goods from the domestic tariff area.
112  Imports and exports to/from EPZ s are outside the purview of the 
import and export regulations and therefore free fro m import policy restrictions, such as the IRC and 
ERC, tariffs and other duties, and the control list.113  Industrial units located in the EPZs also enjoy an 
income tax exemption for ten years and 50% re bate on export earnings thereafter.  Additional 
incentives are available under the Industrial Polic y 2005 (section (4)(iii) and Chapter IV).  As 
indicated earlier (section (3)(viii)), as from December 2005, exports of liquid glucose from one EPZ have benefited from a 20% cash incentive. 
144. Since the previous Review of Bangladesh, the number of export processing zones (EPZs) has 
increased from two to six.  These are operating in Chittagong (as from 1983), Dhaka (1993), Mongla 
(2001), Ishwardi (2005), Comilla (2002), and Utta ra (2002).  A seventh, the Adamjee EPZ, is under 
preparation (February 2006).  As of June 2005, th ere were 221 industrial units in operation (133, in 
June 1999) with total investment of US$867 m illion (US$391.8 million in June 1999), of which 
US$660 million (US$306.5 million in June 1999)  involved 100% foreign investment.
114  More than 
                                                      
111 Export Promotion Bureau (undated). 
112 The BEPZA is responsible for issuing a pass book specifying the annual entitlement of imports from 
the domestic tariff area for EPZ industr ial units;  according to th e authorities, however, the pass book is not used 
as they deem it unnecessary. 
113 The movement of goods between the EPZs and areas in Bangladesh outside of the EPZs is regulated 
in accordance with the existing regulations. 
114 As of June 2005, foreign investment in the EPZs originated in 28 countries, mainly from:  EC 
members;  the Republic of Korea;  Japan;  Hong  Kong, China;  Malaysia;  the United States;  and 
Chinese Taipei.  BEPZA online information.  Ava ilable at:  http://www.epzba ngladesh.org.bd/Reports/ 
ReportMain.php [4 August 2005]. WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 74 
 
 
half of these units continue to produce ready-made garments or tex tile items;  others products, include 
electronic and electrical items, metals, leather produc ts (including shoes), and plastics (Table III.11).  
In 2004/05, exports from the EPZs amounted to  US$1.5 billion or 17.9% of total exports 
(US$891 million or 15.5% in 1999/00);  and EPZs employed 164,524 people.  
Table III.11 
Export processing zones:  invest ment by sector, as at 30 June 2005 
No. of industries 
in operation Investment 
(US$'000) Product 
1999 2005 1999 2005 
Garments and accessories 36 67 103,158 283,017 
Textile products 16 26 91,021 212,262 
Footwear and leather goods 11 12 41,761 50,080 
Knitting and other 11 19 30,186 73,915 
Fishing reel and golf equipment 1 1 29,741 31,070 
Caps 7 7 22,080 37,541 
Electronics and electrical goods 10 12 20,446 48,807 
Terry towels 14 15 15,392 27,749 
Metal products 8 11 11,637 18,287 
Plastic goods 7 12 8,799 19,384 
Tents 3 4 7,109 21,711 
Miscellaneous 4 17 6,428 28,734 
Ropes 1 2 2,493 5,914 
Paper products 2 2 708 776 
Furniture 1 .. 506 6 
Toys 1 .. 349 349 
Service-oriented industries .. 4 .. 4,568 
Agri products .. 10 .. 2,786 
Chemical and fertilizer .. .. .. 49 
Total 133 221 391,814 867,006 
.. Not available. 
Source: Bangladesh Export Processing Zones Authorit y online information.  Available at:  
http//www.epzbangladesh.org.bd/Reports/Product WiseInvestmentEmployment.php [5 August 2005].  
(xiii) Export finance 
145. Three types of export financing are available in  Bangladesh:  preshipment financing in local 
currency by commercial banks;  preshipment fina ncing in foreign currenc y by commercial banks 
through the Export Development Fund (EDF);  a nd back-to-back letter of credit facilities.  
146. Exporters can access credits in local currenc y from private and nationalized commercial 
banks at a concessional rate determined by the Bangl adesh Bank.  The interest rate for exports was 
changed from a range of 8% to 10% in 1994/95 to a fixed rate of 7% as from 10 January 2004 
(section (4)(iv)).115 
147. Exporters can obtain export credits/loans for up to 90% of the value of their irrevocable L/Cs 
or sales agreements for a maximum of 180 days.116  Credit repayment can be extended to 270 days for 
                                                      
115 Bangladesh Bank (2004). 
116 Export Promotion Bureau (undated), para. 9.5.1. Bangladesh WT/TPR/S/168/Rev.1 
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exporters of certain commodities, such as frozen food, tea, and leather products.117  Export Policy 
2003-2006 provides for:  the launching of an export credit cell at the Bangladesh Bank;  the setting up of special units in commercial banks providing fu nds for exports;  and the establishment of a high-
power loan-monitoring committee to regulate loan demand, review and monitor loan flows and 
approve dealers opening internal back-to-back L/Cs  in favour of local raw material suppliers under 
the original L/C (see below).  
148. The Export Development Fund (EDF), administered by the Bangladesh Bank, provides 
preshipment financing for imports of raw materials,  spare parts, and packing materials necessary for 
exporters of non-traditional items.  Few details are av ailable on the terms of such financing, notably 
on concessional rates of interest.  Like other expor t credits, the time-limit for repayment is usually 
180 days, extendable to 270 days in exceptional cases.
118  As from April 2005, the interest rate 
charged on U.S. dollar denominated loans has been  re-fixed at LIBOR +1%.  Lending in foreign 
currency from the EDF to finance imports of raw materials, accessories, spare parts and packing 
materials used in export production increased;  US$216.37 million was disbursed in 2004/05, 32.9% 
higher than in the previous year, utilized mostly by the apparel sector.119  Export Policy 2003-2006 
indicates plans for the EDF to offer venture capital for production with lower interest rate and easy 
term for repayment. 
149. Exporters of all products benefiting from the bonded warehouse system may open back-to-
back L/Cs for the required imports of raw materials against their master L/C, subject to observance of 
domestic value addition requirement (set in terms of "permissible limit of C&F value of imported 
inputs as a percent share of f.o.b. export value of output") prescribed by the Ministry of Commerce.  
Under the inland back-to-back L/C system, exporte rs may also procure raw materials from local 
suppliers and  obtain a dvantageous financing. 
(xiv) Export insurance and guarantees120 
150. The Export Credit Guarantee Scheme (ECGS), covering risk on export credits at home, and 
commercial and political risks occurring abroad, is  administered by Sadharan Bima Corporation 
(SBC), a state-owned general insurance company.  There seem to be four guarantee schemes:  the 
Export Credit Guarantee (ECG) preshipment;  the Export Credit Guarantee (ECG) post-shipment, the 
Export Payment Risk Policy (EPRP) offering a comprehensive guarantee;  and the most recently introduced Whole Turnover Pre-shipment Finance Gu arantee (WTPFG).  The pre- and post-shipment 
ECG and WTPFG are extended to banks, and th e EPRP is extended directly to exporters. 
151. Details of the terms of preshipment ECGs are not available.  At the first Trade Policy Review, 
it was indicated that the preshipment ECG insures banks against 75% of losse s on advances made to 
exporters at the preshipment stag e for the purchase, manufacture, processing or packing of goods for 
export.  It covered losses resulting from the insolvency  of the exporters or their failure to repay the 
loans within four months.  The preshipment EFG ca n be converted into post-shipment cover of up to 
95% of losses.  The EPRP was intended to protect exporters against overseas commercial and political 
risks, covering 85% of commercial risk losses and 95% of political risk losses.
121  
152. Under Export Policy 2003-2006,  the Export Credit Guarantee Scheme was to be restructured, 
and made efficient.  According to the authorities at the time of the previous Review, the ECGS had 
                                                      
117 Export Policy 1997-2002, para. 8.1.5. 
118 Export Policy 1997-2002, para. 8.1.5. 
119 Bangladesh Bank (2004). 
120 No comments or requested information were pr ovided by the authorities on this section. 
121 The EPRP can be assigned to banks as collateral against loans. WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 76 
 
 
not had the "desired effect due to existence of va rious complications in realizing their benefits".122  In 
particular, the scheme had largely failed to ensure  access to preshipment export finance for exporters 
with confirmed L/Cs but insufficient collateral and track record.  As commercial banks were reluctant 
to provide preshipment export finance based on L/ Cs only, and collateral was heavily discounted 
and/or difficult to provide for small- and medium-s cale exporters, the absence  of an effective export 
credit guarantee scheme has restricted the number of exporters with access to preshipment financing.  
Moreover, the ECGS was beset with problems, su ch as delays in settlement of claims, premium 
payment controversy, and poor recovery. 
(xv) Export promotion and marketing assistance 
153. The Export Promotion Bureau (EPB), a semi-a utonomous institution under the Ministry of 
Commerce, is responsible for export promotion in Bangladesh.123  The EPB's activities also include 
the formulation and review of the Export Po licy (including export incentives and facilities), 
dissemination of trade information through its Tr ade Information Centre, product development for 
export, organization of trade fairs and national training programmes, allocation and monitoring of 
garment export quotas (until end 2004), and me diation and settlement of trade disputes.124  At the time 
of the previous Review according to one report, 52%  of the exporters surveyed had received direct 
assistance from the EPB.125  
154. Export promotion is also coordinated at the inter-government-agency level.  The National 
Committee on Export Promotion, h eaded by the Prime Minister, comprises the Ministers of Foreign 
Affairs, Finance, Commerce, Industries, Planning,  Jute and Textiles, Fisheries and Livestock, 
Information and Communication Technology, as well as senior government officials and 
representatives of important trade associations.  Th e Committee reviews the export situation at regular 
intervals, and provides necessary orientations.126  An Information Technology Village and a Leather 
Fashion Institute were establishe d with the assistance of the GTZ (German technical cooperation 
enterprise).  
155. In addition to tax and non-tax incentives availa ble to export-oriented industries, deemed 
exporters, high priority sectors, and special de velopment sectors (Box III.1), Export Policy 2003-2006 
includes export promotion in the fo rm of incentives for organizing and participating in international 
trade and single country fairs, assistance to jute entrepreneurs to join international fairs and 
exhibitions, as well as the setting up of certain in stitutions (Foreign Trade Institute, world trade 
centres in Dhaka and Chittagong, a trade facilitation centre in Dhaka). 
156. Firms producing items included in the "Cr ash Programme" under Export Policy 1997-2002 
also have access to various facilities, including soft loans at a concessional interest rate, and assistance 
for market exploration and securing joint-venture partners.  The programme includes toys, luggage, 
fashion items, electronics, leather goods, diamond cutting and polishing, jewellery, silk fabric, 
                                                      
122 Export Policy 1997-2002, para. 8.1.1. 
123 EPB online information.  Available at:  http://epb.gov.bd/What_is_EPB.htm [8 August 2005]. 
124 According to the authorities, at the time of the previous Review,  the country's export promotion 
activities centred around the South Asian region, in pa rticular, in SAPTA and the BIMST-EC countries.  
Moreover, Bangladesh promoted its products through its participation in about 30 international trade fairs 
around the world.   
125 At the time of the previous Review, it was also reported that the EPB played a restrictive rather than 
promotional role, especially with regard to monitoring exports and issuing export licences.  There had also been 
complaints about the EPB's non-transparent system of sel ecting participation in trade fairs, and its inefficiency 
and lack of professional skills in arranging presentations and product displays. 
126 Export Promotion Bureau (undated), para. 7.1. Bangladesh WT/TPR/S/168/Rev.1 
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stationery goods, cut and artificial flowers, orchid s, gift items, vegetables, engineering consultancy 
and services;  the Export Policy 1997-2002 has extended the list to fresh flowers, fruit and vegetables, 
bamboo, cane and wooden furniture.127  Airfreight is charged at a lower rate for exports of all crash 
programme items.128  
157. In pursuance of past projects and the provisions of Export Policy 2003-2006, an Export 
Promotion Fund (EPF) was set up to provide su pport to producers/exporters of new and non-
traditional items for purposes of product development a nd market diversification.  The fund includes, 
inter alia :  venture capital at lower rates of interest;  assistance in obtaining foreign technology and 
consultancy for product developmen t and diversification;  assistance in setting up marketing missions 
abroad and participating in international fairs;   assistance in establishing sales and display centres 
abroad and extending warehousing facilities;  assi stance for participation in overseas training 
programmes on product devel opment and marketing with a view to  developing  technical skills and 
marketing expertise;  and assistance for any other activ ity related to product and market development.  
The fund is to be administered by the EPB 
158. At the time of the previous Review, other in centives available for exporters of non-traditional 
products under the export diversification progra mme, funded by the World Bank and other donors, 
included financial aid of up to 50% of their market costs for promotion.  The total outlay of the project was Tk 2.23 billion for 1999-02. No r ecent data were available from the authorities. 
159. The highest performance exporters are rec ognized as "commercially important persons" 
(CIPs)
129 though they are not provided with any financial or fiscal compensation.  At present, there are 
some 95 CIPs (80 at the previous Review).   
(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Registration of companies and investment130 
160. Business in Bangladesh can be carried out by a company incorporated locally or by a foreign 
company incorporated abroad, but registered in  Bangladesh.  Incorporation and registration of 
companies in Bangladesh is provided for in the Co mpanies Act, 1994, and is administered by the 
Registrar of Joint Stock Companies and Firms.  Registration allows for three types of business:  
companies limited by shares (private and public limited companies), companies limited by guarantees, and unlimited companies.   
161. In general, no prior permission is necessary to  start a new business.  Private enterprises are 
encouraged to participate in almost all areas of economic activity, except the "reserved industries", 
which are reserved exclusively for the public sect or.  These include:  (i) arms, ammunition and other 
defence equipment and machinery;  (ii) forest pl antation and mechanized extraction within the bounds 
of reserved forests;  (iii) production of nuclear ener gy;  and (iv) security printing (currency notes) and 
minting.  Prior clearance is required for investment in banks, insurance companies, and other financial 
institutions (Chapter II).   
162. Private enterprises can register with the Board of Investment (BOI), which provides necessary 
facilities with a "one-stop service".  This includes ar ranging:  electricity and gas connection;  water 
and sewerage connection;  telecommunication fac ilities;  duty concessions for imported machinery, 
                                                     
 
127 Export Policy 1997-2002, para. 8.11. 
128 Export Policy 1997-2002, para. 8.4. 
129 Export Policy 1997-2002, para. 8.19;  and Export Promotion Bureau (undated). 
130 No comments were provided by the authorities on this section. WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 78 
 
 
spare parts, and raw materials;  and environmental clearance.131  The BOI is also responsible for:  
allocating industrial plots;  issuing import entitleme nts (section (2)(i));  approving the payment of 
royalties;  technical know-how or technical assistance  fees;  and the appointment of and payment of 
remuneration to foreign personnel.  
163. Industrial units located in the EPZs and small- scale industrial units can register with the 
Bangladesh Export Processing Zones Authority (BEPZA) and the Bangladesh Small and Cottage 
Industries Corporation (BSCIC), respectively, which provide services to meet the more specific needs of these industries (sections (3)(xii) and (4)(vi)). 
(ii) Taxation 
164. Bangladesh's internal tax system remains char acterized by a low (though rising) overall level 
of taxation relative to GDP (Chapter I);  relativ ely heavy reliance on indirect taxes (tariffs, VAT, 
supplementary duties, excise taxes, etc.);  and ex tensive use of specific exemptions and generalized 
tax incentives, particularly for investment.    
165. Bangladesh still relies on indirect taxes for over 80% of its total tax revenue, of which import-
related taxes account for more than one half (T able III.12):  customs duties and VAT account for 
more than 70% of indirect tax revenue with the re mainder involving mostly supplementary duties.   
Table III.12 
Tax revenue receipts by source, 1998-05 
(Tk billion and per cent)  
  1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 
Total (Tk billion) 148.7  151.2  187.7  202.2  236.5  261.9  299.6  
 (Per cent) 
Income tax 15.9  17.2  18.6  18.7  17.9  18.0  18.9  
Tax on imports 57.5  54.7  53.5  51.8  51.0  50.3  50.4  
Customs duty  31.9  28.1  27.2  26.7  28.2  27.1  26.4  
VAT 20.5  20.3  19.6  18.6  17.4  16.8  17.9  
Supplementary duty 5.2  6.3  6.7  6.6  5.4  6.4  6.2  
Tax on domestic goods 25.2  27.0  27.1  28.7  30.1  30.6  29.8  
VAT 12.2  13.9  14.4  16.0  15.5  16.5  17.0  
Supplementary duty 11.5  11.3  11.3  11.3  13.7  13.5  12.4  
Excise duty 1.5  1.7  1.5  1.4  0.9  0.6  0.5  
Other taxes 1.4  1.1  0.8  0.8  1.0  1.1  0.8  
Source : Central Bank of Bangladesh.  Available at: http:// www.bangladesh-bank.org/pub/mont hly/econtrds/econtrds.html 
[February 2006]. 
166. Since government revenue is heavily depende nt on trade-related taxes (20.1% in 2004/05)132, 
a concern associated with further tariff liberalizati on is the possible reduction in tax revenue and its 
effect on the budget balance.133  The authorities are aware that if in direct taxes were applied uniformly 
on domestic production and imports, it would both re duce the anti-trade bias and increase government 
revenue by widening the tax-net.  Efforts are unde r way to increase revenue from direct taxes, an 
alternative source of revenue, despite the limited number of taxpa yers (Chapter I). 
                                                      
131 For further information see BOI online information.  Available at:  http://www.boi.gov.bd. 
132 WTO estimate based on data contained in Ministry of Finance (2005a). 
133 Planning Commission (2004). Bangladesh WT/TPR/S/168/Rev.1 
 Page 79 
 
 
(a) Indirect taxation 
167. Indirect taxes involve border taxes (customs du ties, infrastructural development surcharge, 
advance income tax) and internal taxes (VAT, supplem entary duty, regulatory duty);  at least one of 
the latter (supplementary duty) has features that are designed to, inter alia,  provide additional 
protection to domestic producers of import co mpeting items, some of which are exported 
(section (2)(v)). 
168. To expand the VAT base, services rendered by amusement and theme parks, picnic spots, 
housecleaning and maintenance agenci es, lease financing institutions , express mail service providers, 
film distributors, commercial building and apartment builders where brought under VAT in 2003.134  
Spinning and weaving industries were transferred fr om excise duty to VAT.  At the time of the 
previous Review, the tax base of the VAT was rather  narrow, as the exclusion of the domestic textiles 
and cottage industries as well as most services meant that around 60% of goods and services were 
exempt.135   
169. The authorities indicate that the single rate VAT is applied uniformly across the board on all 
domestic industries, with a few exceptions (100 % export-oriented industries) and following the 
principles of sales tax or goods and services tax (GST) elsewhere in the world (February 2006).  The 
authorities maintain that the rebate mechanism in  place avoids any cascading effect or tax on tax; 
export items benefit from subsequent drawback or  bonded facility.  Furthermore, because of the 
'informal' nature of certain services-related businesses (e.g. garages and workshops for motor 
vehicles, dockyards, freight forwarders, cons truction firms, printing presses, consultancy and 
supervisory firms), which cannot maintain all reco rds required for VAT calculation due to associated 
incremental costs (i.e. computers, accountants, etc.),  a truncated base (a predetermined rate of value 
addition) is allowed for VAT calculation. 
170. As discussed earlier, supplementary duties have cascading effects.  These duties are levied 
like excise taxes and are, in prin ciple, trade neutral, since the same rates are supposed to apply to 
imports and similar domestically produced goods, howe ver, this is not always the case, for example, 
for mineral water, detergent, lamps and light fittings (section (2)(v)(e)). 
171. The VAT was introduced to replace not just the previous sales tax, but also excise duties.  
Airline tickets and bank deposits (different rates fo r different slabs of deposits) are still subject to 
excise duty. 
172. Other indirect taxes seem to include:  a fore ign travel tax, a narcotics duty on alcoholic 
beverages, an advertisement tax, a duty on elect ricity consumption, a specific tax on taxicabs and 
buses, and an irrigation service charge (ISC). 
(b) Direct taxation 
173. The main direct taxes are the personal income ta x and the corporation tax.  As of 2005/06, the 
personal tax consisted of fi ve rates:  zero up to a Tk 100,000 threshold;  10% (on the next Tk 200,000 
of total income);  15% (on the next Tk 250,000 of  total income);  20% (on the next Tk 350,000 of 
total income);  25% on the balance of income a bove Tk 350,000;  and a flat rate of 25% for non-
residents other than Bangladeshi non-residents.  Bangladesh operates a classical corporation tax 
system, thereby entailing double taxation of dividends;   the tax is levied at 30% on publicly traded 
                                                      
134 Bangladesh Bank (2004). 
135 The exemption accorded to domestic textiles and co ttage industries alone wa s thought to result in 
forgone VAT revenues amounting to 0.58% of GDP. WT/TPR/S/168/Rev.1 Trade Policy Review 
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(listed) companies;  37.5% (to be raised to 40%  in 2006-07) on non-publicly traded (non-listed) 
companies;  40% on all non-resident companies, unlisted companies, and local authorities;  and 45% on banks, insurance companies, and financial institu tions.  Preferential corporation tax rates seem to 
be in place for RMGs (10%), and ju te and textile firms (15%) since 2003.
136 
(iii) Tax concessions and incentives 
174. Bangladesh offers a wide range of open-e nded tax incentives, notably tax holidays and 
accelerated depreciation see (section (3)(x)) and below;   these are contained in the Industrial Policy 
2005.137  As indicated at the previous Review, the in evitable outcome is that marginal effective tax 
rates can vary substantially by sector, which c onstitutes a potential impediment to the efficient 
allocation of domestic resources.  Moreover, there is  a lack of transparency concerning the revenues 
forgone and cost-effectiveness of tax incentives,  which undermines public accountability and thus 
governance.  In particular, the tax authorities do not  publish detailed information on the amounts of 
tax revenue forgone, nor do they systematically ev aluate the impact and effectiveness of such 
incentives.  Experience elsewhere suggests that tax incentives, particularly tax holidays, are seldom 
cost-effective.138  Publication of estimates of tax revenu es forgone in the form of tax expenditure 
accounts along the lines of practices in many OECD countries together with studies evaluating their 
cost-effectiveness, would greatly enhance transparency  and contribute to more effective tax policy in 
Bangladesh.  Elimination of incentives found to be ineffective would permit a broadening of the tax 
base, thus allowing lower tax rates across the board, and lower tariffs139, without necessarily involving 
any loss in total tax revenues;  the outcome would be a more market-oriented tax system aimed at 
taxing income from investment in a more neutral fashion. (In February 2006, the authorities indicated 
to the Secretariat that forgone tax revenue as a result of tax holidays from 2000 onwards was about 
Tk 2.5 billion.) 
175. The NBR, in consultation with the Ministry of  Industries, publishes details of eligibility for 
concessional taxes and tax holidays in the Official Gazette . 
176. Under Section 46A of the Income Tax Ordinance, tax holidays of four to six years are granted 
to industrial enterprises set up between 1 July 19 95 and 30 June 2008, depend ing on the location of 
the establishment:  four years for Dhaka and Chittagong Divisions (excluding three Chittagong Hill 
Tract Districts);  and six years for Khulna, Sylnet, Barisal and Rajshahi Divisions and the three Chittagong Hill Tract Districts.  Industrial units located  in the EPZs enjoy a tax holiday of ten years.  
For undertakings established before July 1995, tax holidays were five, seven, nine, and 12 years for 
industries set up in the developed, less developed,  least-developed areas, and EPZs, respectively.  The 
period of the tax holiday is calcu lated from the month of commen cement of commercial production or 
operation of the industrial undertaking.  Eligibilit y is determined by the NBR, which issues tax 
holiday certificates within 45 days of submission of an application.  Under Industrial Policy 2005, companies enjoying tax holidays are required to re invest at least 40% (previously 30%) of their 
exempted income, within two years from the end of the tax exemption period, in the said company, in 
a new industrial undertaking, or in stocks and sh ares of a public company or in government bonds or 
securities.   
                                                     
 
136 Bangladesh Bank (2004). 
137 In granting tax and duty concessions, there is no discrimination between public and private 
enterprises, or between domestic and foreign enterprises.  Industrial Policy 2005, chapter 7.  Available at: http://www.fbcci-bd.org/HTML/POLICY/Industri al_Policy_2005.htm [8 November 2005]. 
138 Most econometric studies show th at forgone tax revenues exceed the increase in investment.  Tax 
holidays are regarded as a particularly ineffective type of tax incentive compared with tax credits, for example. 
139 Tariffs tend to be a relatively expensive type of tax distortion. Bangladesh WT/TPR/S/168/Rev.1 
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177. Industries not enjoying a tax holiday may in stead benefit from accelerated depreciation 
allowances.  Depreciation is allowed at the rate of 100% of actual cost of machinery or plant in the 
first year of commercial production and at 20% in the second year . 
178. Special incentives, such as tax exemptions, tax holidays, and reduced tax rates or accelerated 
depreciation (if the tax holiday and tax exemption facilities cannot be provided for new industries in 
the future) can be considered for "thrust" sect or industries (listed in  Annex 1 of Industrial 
Policy 2005).140  The facilities provided to industries esta blished in EPZs, including export-oriented 
industries, can also be provided to the "thrust" sect ors.  The objective is to encourage use of domestic 
technology, import substitution, adjustment a nd/or "export augmentation".  The Government 
determines the facilities to be received by thrust sector entrepreneurs after analysing and reviewing 
the performance and contribution of their subsect or/industrial enterprise to the national economy. 
179. Additional tax exemptions are available on:  royalties, technical know-how fees received by 
any foreign collaborator, firm, power generation comp any or expert;  the interest on foreign loans 
under certain conditions;  alleviati ng, if not removing, internationa l double taxation in case of foreign 
investors on the basis of bilateral agreements;  fore ign technicians employed in industries specified in 
the relevant schedule of income tax ordinance for up  to three years;  income of the private sector 
power generation company for 15 years from the date  of commercial production;  dividend income of 
non-resident shareholders during the tax exemp tion period of an industry set up in an export 
processing zone and also after the expiry of tax exem ption period if the dividend is re-invested in the 
same project;  and capital gains from the transfer of shares of public limited companies listed with a 
stock exchange.141 
(iv) Interest rate subsidies 
180. Loans at concessional interest rates are provide d for exports (section (3)(xiii)), agriculture, 
and small and cottage industries, through the nationa lized commercial banks (NCBs), and specialized 
banks like the Bangladesh Krishi Bank (BKB).  Th e interest rate policy introduced in 1992, 
liberalized interest rates ceilings for all other le nding categories, and permitte d individual banks to 
differentiate interest rates to individual borrowers.  As of July 2005, NCBs' interest rate bands were 
fixed at 8%-10% for the agriculture sector, 7% (as from January 2004) for export industries, and 9%-11% for small and cottage industries
142;  these rates were lower than those set in 2000. 
181. From 1 July 2005, interest on agricultural loans provided for the production of pulses, 
mustard seeds, spices, and maize was reduced from 8% to 2%.143 
(v) Input subsidies, pricing, and marketing arrangements144 
182. During the period under review, on top of the 30%  cash subsidy for exports of agricultural 
commodities, vegetables, and fruit (section (3 )(viii)), the agriculture sector benefited, inter alia,  from 
a 25% subsidy on imported fertili zers, a 20% subsidy for the state firm Palli Bidyut Samities (PBS) 
for bills for electricity used in irrigation, and a waiver of the minimum charge for all electricity 
connections throughout the country for irrigation.145  
                                                      
140 Export Promotion Board (2005). 
141 BOI information online.  Available at:  http:// www.boibd.org/invest_incentiv e.htm [9 August 2005]. 
142 Bangladesh Bank online data. Available at: http://www.bangladesh-bank.org/fnansys/ 
interestlending.html [9 August 2005]. 
143 Ministry of Finance (2005b). 
144 No comments were provided by the authorities on this section. 
145 Ministry of Finance (2005b). WT/TPR/S/168/Rev.1 Trade Policy Review 
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183. At the time of the previous Review of Bangl adesh, the Government retained administrative 
pricing for certain goods and services.  According to information available to the Secretariat, these 
included petroleum products, fertilizer, utilities, and transport.  At the time of the first Review, administrative prices existed for sugar, pharmaceutical  products, newsprint, a nd paper;  however, the 
Secretariat has been unable to confirm whether these have been eliminated. 
184. State involvement and monopoly rights in impor t, production or marketing, coupled with 
slow adjustment of prices or tariffs to re flect operating costs, have continued to raise 
cross-subsidization concerns with respect to petroleum products, urea fertilizer, natural gas, 
electricity, and air/rail transport.
146  Electricity tariffs for industrial, commercial, and residential 
consumers appear to be higher than high voltage  (manufacturing) end-users and agricultural pumping 
consumers (Chapter IV).   
(vi) Assistance to small enterprises and SMEs 
185. Support for small-scale enterprises, referred to as small and cottage industries (SCIs), is 
provided by the Bangladesh Small and Cottage Indus tries Corporation (BSCIC), an apex statutory 
body.  As defined in Industrial Policy 2005, SCIs comprise "small industries"147, "cottage 
industries"148, and rural industries. 
186. The BSCIC creates industrial estates equipped with infrastructural facilities.  Until 2000, it 
allocated plots to the SCIs at prices subsidized by  40%-50%, depending on the estate;  at present, only 
the Noakhali estate benefits from this subsidy.  There are currently 2,527 (1,434 in 2000) SCIs 
operating in 67 (57 in 2000) industrial estates around the country.  Other BSCIC functions include 
providing investment counselling and marketing info rmation, organizing seminars and trade fairs, 
recommending tax incentives and import entitlements, arranging financing for SCI projects, and issuing work permits. 
187. Registration with the BSCIC is required to benefit from tax and duty concessions.  
Concessionary loans are available through the BSCI C at interest rates ranging from 9% to 11% 
(section (4)(iv)). 
188. To help generate employment th rough the growth and development of the small enterprise 
sector, the Small Enterprise Fund (SEF), effective fr om May 2004, was drawn up with Tk 1 billion to 
provide refinance to banks and financial institutions  in respect of lending to small entrepreneurs.
149  
Entrepreneurs with fixed assets not exceeding Tk 10 million are eligible for loans under the scheme.  
In addition to the Bangladesh Bank's own funds, th e World Bank agreed to provide a US$10 million 
fund to the Bangladesh Bank under a Development Credit Agreement for financing the development 
of the small enterprise sector.  The World Bank fund  was to be used also for refinancing banks' and 
financial institutions' lending to the small enterprise sector.  Until September 2005, 68% of the SEF's 
Tk 1.53 billion was sourced by Bangladesh Bank  resources (the rest from the World Bank's 
International Development Association), 65% of di sbursements were destined for medium-term uses, 
and 77.7% of the facility was to meet trading con cerns.  At 31 January 2006, Tk 1.69 billion had been 
refinanced through seven banks and ten financial institutions.  
                                                      
146 WTO (2000). 
147 Small industries are those in which value/replacemen t cost of durable resources other than land and 
factory buildings is under Tk 15 million (in manufacturing), employing fewer than 25 workers (trading and other services). 
148 Cottage industries are those with part-time or full-time family labour in manufacturing and services-
oriented activities. 
149 Bangladesh Bank (2004). Bangladesh WT/TPR/S/168/Rev.1 
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189. The number of the SCIs registered with the BSCIC had increased from 11,468 in 1992/93 to 
65,821 (out of a total of 654,545 SCIs) in 2004/05;  SCIs generate 2.9 million jobs (993,863 in small 
industries, and 1,912,791 in cottage industries). 
190. The contribution of small and medium-sized enterprises' (SMEs)150 to GDP remained within 
the range of 4.4% to 4.7% between 1999 and 2004.151  The authorities realized that a more "proactive" 
policy framework for rapid development of SMEs was needed.152  Suggested actions have included:  
(i) adopting an unambiguous definition of an SME;  (ii) strengthening BSCIC's capacity to provide 
market information;  (iii) simplifying of regulatory procedures;  (iv) setting up an appropriate credit guarantee scheme for lending without real estate base d collateral;  (v) enlarging the base of conduit 
lending institutions;  (vi) making BSCIC's industria l estate programme demand-driven;  (vii) priority 
development of the road network and supply of g as and electricity;  (viii) extending BOI's one-stop 
service to cover SMEs;  (ix) greater public-priva te cooperation for the design and implementation of 
effective business support services;  (x) a differen tiated and "hassle-free" indirect tax system for 
SMEs;  and (xi) calibration of trade pol icy reform to support SME development. 
191. Based on the recommendations of an SME Task  Force (set up in 2004), in April 2005 the 
Ministry of Industries formulated the SME policy strategies;  an SME Advisory Panel and an SME 
Cell (at the Ministry of Industry) were created to implement the strategy and SME development.  The 
SME Cell comprises experienced o fficials from the Ministry of Industries, Bangladesh Small and 
Cottage Industries Corporation, National Productiv ity Organization (NPO), Bangladesh Bank, and 
BSTI.  The policy strategies contain objectives and define/classify the size and scope of activities for 
SMEs;  they also set priorities such as credit di stribution, quality-assurance certification, capacity 
building and training.
153  The Asian Development Bank has ex tended a number of SME-targeted loan 
packages and a technical assistance grant under a th ree-year SME Sector Development Programme 
(SMESDP);  this type of support consists of a US$15 million programme loan for policy reforms, a 
US$30 million project loan for extending credit to small enterprises (started on 17 July 2005), a 
US$5 million technical assistance loan and a US$600,000 technical assistance grant. 
(vii) State-owned enterprises and privatization 
192. During the period under review, reform of state-owned enterprises (SOEs) has slowed down 
due to stiff opposition from vested interests.154  According to a Word Bank survey, the environment in 
which SOEs operate ha s been unfavourable.155  The survey points out:  the lack of corporate 
governance structure;  little or no autonomy in prici ng, procurement, investment, recruitment, wages, 
and bonus;  the appointment of senior managers  without relevant background and with quick 
turnover;  general mismanagement;  and theft of gas and power by private consumers.  Apart from 
                                                      
150 The SMEs are those in which value/replacement cost of durable resources other than land and 
factory buildings is between Tk 15 million and Tk 100 million (in manufacturing), employing 25 to 100 workers 
(trading and other services). 
151 Bangladesh Bank (2004).  The authorities indicated that national statistics lump the output of 
medium sized enterprises within the out put of large enterprises for purposes  of national accounts presentation.  
152 Planning Commission (2004). 
153 SME Cell (2005). 
154 Closure or privatization of manufacturing SOEs has been halted, following protests by trade unions 
notwithstanding the availability of generous severance payments. Loss-making SOEs have been encouraged to 
downsize with a freeze on hiring and with no recourse to the budget  or bank borrowing.  Only 
five manufacturing SOEs had been closed during the financial year 2004, with around 16,000 workers 
retrenched (IMF, 2004). 
155 World Bank (2003b). WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 84 
 
 
direct budgetary subsidies156, assistance to SOEs includes input subsidies, concessional lending terms 
and debt conversion/financing;  how ever, details were not available. 
193. SOEs exercise a dominant influence in ma ny prominent industries in Bangladesh, for 
example, jute, textiles, steel and chemical/fertilizer production, sugar, and utilities.  Many continue to 
operate at a loss (Table III.13).  At present,  SOEs losses seem to consume 2% of GDP.157  
Nevertheless, the overall SOE losses have been re duced substantially and their contribution to 
national output, value addition, em ployment generation, and revenue see ms to have increased.  In 
2003/04, their revenues grew by 8.25% and their value addition by 20.56%.158  In 2004/05, some 20 
of the largest, non-financial SOEs incurred a net to tal loss of Tk 43 billion;  the largest losses were 
registered by energy- and transport-related SO Es (BPC, BPDB, BBC) while the water company 
BWDB received 68% of the gove rnment subsidy.  Crucial pub lic services, such as power and 
transport, are also still largely inefficient monopo lies, which limits priv ate sector productivity and 
growth. 
Table III.13 
Economic performance of sele cted non-financial SOEs, 2004-05 
(Tk million) 
Name of corporation Net 
profit/lossa Gov't. grants 
& subsidyb Debit service 
liabilities Outstanding bank 
loan (overdue loan)c 
Agriculture & fisheries     
Bangladesh Agricultural Development Corporation  -252.9 380.0 0.0 953.5 (921.1) 
Bangladesh Fisheries Development Corporation  16.4 .. 0.5 0.5 (0.5) 
Industry     
Bangladesh Textile Mills Corporatio n  -237.5 .. 0.0 4,719.2 (4,643.7) 
Bangladesh Steel and Engineering Cor poration  97.5 .. 10.0 1,842.2 (795.8) 
Bangladesh Sugar and Food Industries Cor poration  -252.6 .. 25.0 4,761.1 (155.7) 
Bangladesh Chemical Industries Corporation  -1,542.6 .. 1,066.1 4,967.7 (2,844.4) 
Bangladesh Forest Industries Developmen t Corporation  48.6 .. 0.0 0.0 (0.0) 
Bangladesh Jute Mills Corporation  -1,740.3 271.0 0.0 28,439.0 (3,238.6) 
Utility     
Bangladesh Oil, Gas and Minerals Co rporation  3,966.4 .. 2,367.7 0.0 (0.0) 
Bangladesh Power Development Board  -6,146.6 .. 1,250.0 8,821.3 (0.0) 
Dhaka Electric Supply Authority  -1,233.7 .. 450.0 151.7 (0.0) 
Chittagong Water Supply Authority   0.9 .. 37.5 0.0 (0.0) 
Dhaka Water Supply Authority  545.7 .. 135.0 0.0 (0.0) 
Transport & communication     
Bangladesh Shipping Corporation  132.7 .. 0.0 519.8 (519.8) 
Bangladesh Inland Water Transport Corporation  244.0 5.0 103.9 4.4 (1.0) 
Bangladesh Biman Corporation  -3,053.3 .. 0.0 344.4 (0.0) 
Bangladesh Road Transport Corporation  -270.9 .. 0.0 30.8 (10.0) 
Chittagong Port Authority  1,168.7 .. 0.0 0.0 (0.0) 
Chittagong Dock Worker's Management Board   -124.5 .. .. .. 
Mongla Port Authority  -199.8 .. 0.0 0.0 (0.0) 
Table III.13 (cont'd) 
                                                      
156 Direct budgetary subsidies repres ent the tip of the iceberg;  various implicit and hidden transfers to 
SOEs are much more substantial.  The budgetary subsidy estimate does not include most hidden resource transfers implicit in administered pricing, subsidized loan s, default on debt service liabilities (DSL) payments or 
poor dividend return on equity investment (World Bank, 2003b). 
157 The Financial Express , Tuesday 21 February 2006. 
158 Ministry of Finance (2005a). Bangladesh WT/TPR/S/168/Rev.1 
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Name of corporation Net 
profit/lossa Gov't. grants 
& subsidyb Debit service 
liabilities Outstanding bank 
loan (overdue loan)c 
Mongla Dock Worker's Management Board   -8.0 .. .. .. 
Bangladesh Telecommunication Regul atory Commission  2,579.5 .. .. .. 
Bangladesh Land Port Authority 110.7 .. .. .. 
Jamuna Multipurpose Bridge Authority  1,430.9 .. 513.4 .. 
Commercial     
Bangladesh Petroleum Corporation  -27,726.7 .. 367.9 44,409.0 (0.0) 
Bangladesh Jute Corporation  5.5 .. 0.0 0.0 (0.0) 
Trading Corporation of Bangladesh  -1.5 .. 0.0 0.0 (0.0) 
Construction     
Rajdhani Unnyan Kartipakha  117.9 .. 0.0 .. 
Chittagong Development Authority  233.2 .. 0.0 .. 
Khulna Development Authority  0.6 .. 0.0 .. 
Rajshahi Development Authority  6.0 1.0 0.0 .. 
Service and other sectors     
Bangladesh Small and Cottage Industries Co rporation  -57.7 225.0 5.6 262.5 (251.5) 
Bangladesh Freedom Fighters Welfare Trust  -33.6 164.4 0.0 143.1 (123.3) 
Bangladesh Water Development Board  79.6 3,440.0 0.0 4.2 (4.2) 
Bangladesh Tea Board  -5.8 .. 0.0 50.1 (50.1) 
Bangladesh Parjatan Tourism Corporation  9.6 .. 7.5 0.0 (0.0) 
Bangladesh Film Development Corporation  -2.0 .. 3.0 26.2 (0.6) 
Bangladesh Sericulture Board  .. 40.7 0.0 0.0 (0.0) 
Rural Electrification Board  2,551.9 80.0 1,238.1 0.0 (0.0) 
Civil Aviation Authority  700.0 .. 111.5 .. 
Bangladesh Export Processing Zone Authority  292.2 .. 55.8 .. 
Bangladesh Inland Water Transport Authority  -129.1 309.5 33.7 .. 
Bangladesh Handloom Board  .. 46.7 0.0 .. 
Export Promotion Bureau  -1.8 100.0 .. .. 
Total -28,770.9 5,063.3 7,782.8 100,450.7 (13,559.4) 
.. Not available. 
a Revised. 
b Up to May 2005. 
c Up to 30 June 2005. 
Source: Ministry of Finance (2005), Bangladesh Economic Review 2005, June,  Dhaka.  
194. To make the privatization process and programme more effective, a Privatisation Act, 2000 
was enacted.  To accelerate the privatization prog rammes, this new legislation reconstituted the 
Privatization Board (established in 1993) as the Pr ivatization Commission, enhancing its authority to 
finalize the sale of enterprises not exceeding Tk 250 million, and to adopt additional options (e.g. 
corporatization, commercialization, restructuring,  management contract, leasing out).  Previously, 
two methods were used for privatization:  sale by international tender and sa le by public offer of 
shares through the stock exchange.  The Privatization Commission, now directly attached to the Prime 
Minister's Office, is entrusted with the overall responsibility for privatizing SOEs. 
195. Bangladesh's privatization policy objectives are contained in the Industrial Policy 2005.159 
                                                      
159 Export Promotion Bureau (200 5), chapter 6.  Available at:  http://www.fbcci-bd.org/HTML/ 
POLICY/Industrial_Policy_2005.htm [8 November 2005]. WT/TPR/S/168/Rev.1 Trade Policy Review 
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196. Between 1993 and January 2006, 65  SOEs were handed over to the private sector, 25 since 
November 2001 (Chapter I).  In September 2005,  the Privatization Commission's website listed 
98 manufacturing SOEs for privatization (25 jute, 22 textile, 27 steel/engin eering, 14 sugar/food and 
10 chemical sector firms). 
(viii) Trade-related investment measures 
197. Despite the local-content measures indicated ear lier (section (2)(xii)), at the time of the 
previous Review, the authorities maintained that they did not use any trade-related investment 
measures that are prohibited under the WTO Agreement on TRIMs.160  The authorities did not provide 
any comment for the current review. 
(ix) Trade-related intellectual property rights 
198. Bangladesh is working to bring its intellectual property rights laws into line with the WTO 
TRIPS Agreement and other international commitment s.  It updated its copyright system through 
Copyright Act No. 28, which has been in force si nce November 2000.  Parliament is expected to 
amend the trade marks, patents and designs, and remaining copyright legislation;  a lengthy 
inter-agency approval and clearance process is under wa y and is expected to be finalized within the 
time-limit agreed at the WTO.161  As indicated during the previous Review, intellectual property 
rights legislation dates from the pre-independence er a (Table III.14).  As a least developed country, 
Bangladesh has been given an extended time-lim it, up until July 2013 (TRIPS Council Decision of 
29 November 2005), for the full implementation of th e provisions of the TRIPS Agreement other than 
those of Articles 3, 4, and 5.  Furthermore, on 27 June 2002, the TRIPS Council approved a decision 
extending until 2016 the transition period during whic h LDCs do not have to provide protection for 
patents and undisclosed information for pharmaceuticals.162 
199. During the period under review, Bangladesh did not join any further international IPR 
conventions.  It is a member of:  the Universal Copyright Convention for the Protection of Literary, 
Scientific and Artistic Works, the Paris Convention for the Protection of Industrial Property Rights, 
and the Bern Convention for the Protection of Lite rary and Artistic Works.  Bangladesh has been a 
member of the World Intellectual Property Organization since 1985.   Accession to other international 
treaties (i.e. the WIPO Copyright Treaty (WCT) and the WIPO Performance s and Phonograms Treaty 
(WPPT)) is under consideration. 
(a) Industrial property  
Patents and design 
200. The Patents and Designs Act, 1911 and the Pate nts and Designs Rules, 1933 provide for the 
protection of patents and industrial designs (Table III.14).  At the time of the previous TPR, a draft 
Patents and Designs Act, 2005 prepared by the Bangladesh Law Commission ensuring conformity 
with the requirements of the TRIPS Agreement wa s under consideration by the Government and was 
to be enacted by the Parliament no later than th e date set by the TRIPS Agreement;  the situation 
remains unchanged.163  Amendments are expected to include the broadening of the definition of 
invention to include all fields of technology and the extension of the term of protection to 20 years.  
By January 2006, a separate Act was being prepared by the Ministry of Agriculture for protection of 
                                                      
160 Ministry of Commerce (1998). 
161 USTC (2003). 
162 General Council Decision of 8 July 2002 (WTO document WT/L/478, 12 July 2002). 
163 Ministry of Industries online information.  Available at:  http://www.moind.gov.bd/html/dptd.html 
[11 August 2005]. Bangladesh WT/TPR/S/168/Rev.1 
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plant varieties, and a proposal for a law on layout-d esigns of integrated circuits had been sent to the 
Law Commission through the Ministry of Industries. 
Table III.14 
Terms of intellectual property rights pr otection in Bangladesh, February 2006 
IPR Main legislation Duration of protection Minimum duration of 
protection under TRIPS Comments 
Copyrights Copyright Act, 2000;  
Copyright (Amendment) 
Act, 2005  Life of author plus 
60 years  Life of author plus 
60 years  
   - related rights  50 years from year of 
performance or fixation;  
25 years from year of broadcast 50 years from year of 
performance or fixation;  
20 years from year of broadcast  
Patents Patents and Designs Act, 
1911 and Patents and 
Designs Rules, 1933 16 years from date of 
application; renewable 
for 5 or 10 years Minimum 20 years from 
date of filing Amendment extended 
to 20 years 
Industrial designs Patents and Designs Act, 
1911 and Patents and 
Designs Rules, 1933 5 years;  renewable for 
two successive 5-year 
periods 10 years  
Geographical 
indications None None Unlimited  
Trade marks Trade Marks Act, 1940, 
as amended by Trade 
Marks Rules, 1963   7 years from date of 
registration;  renewable 
after every 15 years  At least 7 years;  
renewable indefinitely  
Layout designs of 
integrated circuits None None 10 years from first 
commercial exploitation Amendments provide 
for 15 years.  Proposed 
to Bangladesh Law Commission for 
enactment of new law.  
Draft of which not yet prepared 
Undisclosed 
information None None No specific period  
Source:  WTO Secretariat, based on information pr ovided by the authori ties of Bangladesh. 
201. Under the Patents and Designs Act of 1911, pa tents are granted for new processes for the 
manufacture of chemical compounds, pharmaceutical  compositions, and micro-organisms, but 
product patents are granted for chemical compounds only if they are produced by new processes.  Chemical products without reference to their process  of manufacture, inventions considered to be 
against national law or morality, and micro-orga nisms remain unprotected.  The patentability of 
pharmaceutical and agricultural chemical products, a nd of plant varieties is not covered by the 
provisions of the 1911 Act but steps are being ta ken with the preparation and passing of new 
legislation.  A provision on compulsory licensing is provided in Section 22 of the Act;  according to 
the authorities, no such licence has ever been issued in Bangladesh and the proposed Act stipulates 
that it can be used both for domestic consumption and export.  Protection is provided for industrial 
designs that are not previously published in the country, and are either new or original or both. 
202. The Patent Office and the Trade Marks Registry  have been merged, and applications for a 
patent or for registering an industrial design must be  made to the Department of Patents, Designs and 
Trademarks of the Ministry of Industries (since March 2004).  A WIPO-financed  project to modernize 
the Patent Office was completed in 2004.  An au tomation project for the Department is to be WT/TPR/S/168/Rev.1 Trade Policy Review 
Page 88 
 
 
implemented with the technical and financial assistance of the European Communities (EU-South 
Asian Intellectual Property Rights Co-operation Project for Bangladesh).164  
203. According to the authorities, the process for gr anting a patent and an industrial design takes 
21 months and nine months, respectively. 
Trade marks 
204. Trade marks are protected under the Trade Ma rks Act, 1940 and the Trade Marks Rules, 1963 
(Table III.14).  Registration is provided only for good s, not services.  According to the authorities, at 
the time of the previous Review of Bangladesh, most of the provisions in the Trade Marks Act were in 
line with the TRIPS Agreement;  the remaining provisi ons are to be incorporated or amended in a new 
Trade Marks Act, 2005, which is under considera tion by the Government and expected to be 
completed within the time limit agreed at the WT O.  The proposed Act also includes provisions for 
the protection of geographical indications and fo r the registration of service marks and collective 
marks, which are not protected under the 1940 Act and the 1963 Rules. 
205. Applications for registration must be filed with  the Trade Mark Registry, under the Ministry 
of Industries, and after examination they are advertised in the Trade Marks Journal .  If they are 
uncontested, registration certificates are issued after f our months.  The registration grants an exclusive 
right to the proprietor to use the registered marks for seven years, which may be renewed for further 
periods of 15 years.  Parallel imports are not permitted.  
(b) Copyrights and related rights 
206. Copyright legislation was updated with the entry into force in November 2000 of the 
Copyright Act No. 28, 2000, and in May 2005 of Copyright (amendment) Act No. 14, 2005;  the 
Copyright Rules, 1967 (as modified up to April 1983) are still in the process of being amended.  Under the new legal framework, copyright protec tion for published literary, dramatic, musical and 
artistic works is for the life of the author plus 60 years (previously 50 years);  for films, records, 
government works, works of international organiza tions and photographs, it is 60 years from the date 
of publication;  and for broadcasts, the term is 25 years of reproduction from the next calendar year of 
the first fixation (i.e. inscription on a physical substratum).  The Copyright (amendment) Act, 2005 
covers, inter alia,  the total or partial use or reproduction of any computer program as well as all 
mechanical, electro-mechanical, electric, magnetic, electro-magnetic, digital, optical or any other 
information-processing technology or system. 
207. Copyright registration remains optional;  those w ho wish to register can file an application 
with the Copyright Office under the Ministry of Cu ltural Affairs.  The registration certificate is 
granted within 30 days of application. 
(c) Enforcement 
208. Public awareness is being created through, inter alia,  national and regional seminars on the 
intellectual property system, and dissemination of  technical information for local scientists, 
technologists, manufactures, industrialists, etc.
165  Close liaison is maintained with the leading private 
sector commercial and industrial organizations to  promote IPR protection.  Since 2001, IPR Days 
have been observed every year in Bangladesh with the direct involvement of government officials.  
By January 2006, a Ministry of Cultural Affairs programme to create public awareness on copyright 
and related rights was in the preliminary stage. 
                                                      
164 Ministry of Industries online information.  Available at:  http://www.moind.gov.bd/html/dptd.html 
[11 August 2005]. 
165 Ministry of Industries online information. Bangladesh WT/TPR/S/168/Rev.1 
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209. Infringement of intellectual property rights can  be challenged in the domestic courts:  
producers or inventors, including foreign right holders , can file a suit.  An appeal against the lower 
court decision can be brought to the Appellate Cour t.  A Copyright Board has been in place since 
2000. 
210. Penalties for infringement of registered pa tents and industrial designs range from to 
Tk 5,000-Tk 10,000;  for trade marks, there is a maximum two-years imprisonment and/or a fine fixed 
by Minister.  For a second conviction of infringement , imprisonment could extend to three years, with 
or without a fine;  and for copyrights imprisonment may extend to a maximum of four years (up to five years for the film sector) with a fine of Tk 200,000 (Tk 100,000 to Tk 500,000 for films). 
211. In pursuance of Section 15 of the Customs Act,  1969, upon complaint by the affected person, 
the customs authority, in cooperation with the IPR regulatory authorities, can inspect, seize, and 
detain shipments of any counterfeit or pirated materials.  
212. No data on enforcement action (e.g. campaigns , raids, seizures of counterfeit/pirated goods 
(domestically produced/imported/exported), cases brought  at the courts, fines/penalties imposed, etc.) 
were available with the authorities. 
213. Intellectual property rights protection in Bangladesh has reportedly worsened and is becoming 
a serious concern.
166  According to observers, enforcement of  IPR laws is lax, particularly with 
respect of computer software, motion pictures, pharmaceutical products, CDs/DVDs, and audio- and 
video-cassettes.  As a result, piracy levels seem high in Bangladesh.167  The authorities seem to 
allocate too few resources to IPR enforcement;  case s of prevention and punishment of IPR violations 
seem low compared with the number of infringements.   The Government also seems  to set a poor 
example by failing to account fully for software in its tenders.  In January 2005, Bangladesh was 
negotiating a bilateral Trade and Investment Framew ork Agreement (TIFA) with the United States to, 
inter alia,  address IPR concerns.168  
(x) Competition and consumer protection policies 
214. Bangladesh does not have a competition law.  Nonetheless, it realizes that anti-competitive 
behaviour adversely affects resource allocation, puts upward pressure on costs, tends to lower 
productivity, and reduces consumer welfare.  The authorities have recently felt the need for an 
operational competition law to address anti-comp etitive practices of domestic and foreign 
enterprises.169  
 
                                                      
166 Bangladesh has never been included in the USTR's "Special 301" Watch List, which identifies 
countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable 
market access for persons that rely on inte llectual property prot ection (USTC, 2003). 
167 Reportedly, the piracy rate for music cassettes, still the dominant format, totalled 96% for all types 
of repertoire;  the rate for CDs is 100% for regional  (Indian) and international repertoire, and 85% for local 
repertoire.  Pirated optical discs are produced locally and imported.  It is estimated that at least 50% of pirated CDs are smuggled into Bangladesh from Pakistan, Sri Lanka, Singapore, Malaysia and other channels.  A 
manufacturing plant in Dhaka is producing at very hi gh capacity and a second plant opened up recently.  
International Intellectual Property Alliance online information.  Ava ilable at: http://www.iipa.com/rbc/ 
2003/2003SPEC301BANGLADESH.pdf [11 August 2005]. 
168 Bilaterals.org online information.  Availabl e at:  http://www.bilaterals.org/article.php3?id_ 
article=1262 [11 August 2005]. 
169 Planning Commission (2004). WT/TPR/S/168/Rev.1 Trade Policy Review 
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215. In 2005, the authorities were finalizing a cons umer rights protection law to ensure that 
consumers are not cheated on the quality of goods and services.170  Since its inception in 1978, the 
Consumers Association of Bangladesh (CAB), a non-governmental non-profit organization, has been 
trying to build up awareness of consumers' right s and obligations, and urging the authorities to 
formulate consumer protection laws;  between 2000 and 2004 the CAB was active, inter alia,  in 
consumer education, monitoring market prices of essentials, handling complaints, campaigns, and product testing.
171 
                                                      
170 Planning Commission (2004). 
171 CAB (2005).