Check GSP forgery to maintain Euro markets
European Commission deadline ends Oct 30
Forgery of documents by a section of foreign investors is causing a loss to the local fabric industry and could put at risk Generalised System of Preference (GSP) facilities the country enjoys in European markets.
The garments exporters called upon the authorities concerned for measures to stop such a forgery and making an arrangement to comply with the new format provided by the European Commission (EC) to put an end to the malpractice before the extended time that expires on October 30.
The EC under the GSP offers lower tariffs or duty-free access for imports from 178 developing countries and territories, including Bangladesh into the European Union (EU) markets.
To avail the facilities, a firm has to strictly follow the EC rules titled 'Rules of Origin' that makes it obligatory to use raw materials from EU countries or produced at the GSP beneficiary country itself.
But a section of dishonest entrepreneurs, including several companies from the countries that do not enjoy GSP facility, import raw materials from China, Korea, Hong Kong and Taiwan and use fake certificates while export their products to European countries, sources said.
As per the EC Rules of Origin, in case of any such forgery GSP issued through manipulation of documents as well as the registration (bond license) will be cancelled.
The exporters said delay in action against forgery had prompted the EC to bring changes in some customs recently.
European Anti-fraud Office (OLAF) instructed all the national customs authorities in the EU member countries to inspect the authenticity of Origin Form A (GSP Forms) for all products imported from Bangladesh before providing GSP facilities, said the sources.
Accordingly the Foreign Trade Association (FTA) of Brussels also informed the EU member states of the changes asking for submission of a preventative payment bond.
The submitted bond (bank guarantee) for 12 per cent of the normal Most Favoured Nation (MFN) rate will be refunded only after the GSP forms are found valid to release the facilities, said the sources.
The buyers, who will have to submit the bonds, have already started asking their exporters in Bangladesh for making arrangements for forthcoming buying trips and offer price accordingly, said an owner of a garments factory at Chittagong Export Processing Zone preferring anonymity.
Following a request from the exporters and the government of Bangladesh, the EC, however, agreed to postpone the customs changes until October 30 to comply with the new format of GSP forms to stop forgery.
BGMEA First Vice-president MA Salam said, “EC has instructed for inspecting the authenticity of Origin Form A (GSP Forms) since the time given to make arrangement for complying with the new format of GSP form expired around two months ago.”“With the time extended until 30, the preventative bond won't have to be submitted during this time,” he said.
“We expect an end to the malpractice as imposition of 12 per cent bank guarantee will discourage the EU buyers in importing our products and cause the export volume decline,” he said.
Absence of stern action encouraged the dishonest entrepreneurs and foreign companies to indulge in GSP forgery in connivance with a section of government officials.
In this respect exporters referred to the repeated incidents of such malpractice by a Korean company for availing of GSP benefits using fake certificates.
A probe committee comprising Export Promotion Bureau (EPB), Commerce Ministry, Bangladesh Export Processing Zone Authority (BEPZA), and BGMEA found a Korean company at CEPZ had availed GSP facility of 3.5 million US dollar (equivalent to Tk 25 crore) through seven fake GSP forms during the year 1998 to 1999.
EPB awarded the company engaged in manufacturing and exporting tents a mere financial penalty of Tk 50,000 for forging seals and signs of its officials.
The company along with another company, owned by same group, also obtained 12 fake GSP certificates from January 4 to March 19 this year.
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