Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hasan on Thursday said the rumour that a sanction might have been imposed against Bangladesh caused by the LC clause, is “baseless and incorrect.”
LCs are private commercial instruments, not statutory order or notice.
“So this should not be misinterpreted as a measure of trade enforcement or economic sanction. Moreover, the BGMEA did not receive any information from our diplomatic mission or from any official sources to support any sanction or trade measure,” said the BGMEA chief in a message to its members, colleagues, friends, and well-wishers.
He urged all the brands, retailers and their agents not to complicate trade with external issues, particularly not to insert any unnecessary clause creating such confusion.
“We also urge our members not to accept any LCs having such a clause, and to communicate with the respective buyer(s), solicit clarification and amendment if such clause is found in the LC,” said Faruque Hassan.
Given all the progresses and initiatives the industry has taken to protect the legitimate rights and wellbeing of the workers, and the sustainability vision 2030, he said they are pursuing through actions, and there is no ground to impose any sanction against Bangladesh as far as the RMG industry is concerned.
“However, we are also working with our government so that any issues or concerns are addressed through diplomatic efforts that support continued progress within the industry and economic security to the workers,” he said.
The much discussed LC was transferred by the ZXY International against a master LC issued by a French buyer named ‘KARIBAN’. ZXY transferred the LC in favour of ‘Knit Concern’, a member of the BGMEA.
The BGMEA collected copy of the LC. It was issued by Standard Chartered Bank l, Dubai.
The LC contains the following text, “We will not process transactions involving any country, region or party sanctioned by the UN, US, EU, UK. We are not liable for any delay, non-performance or/ disclosure of information for Sanctions Reasons”.
The BGMEA sought clarification from ZXY on such clause.
“We received a formal clarification from ZXY, as well as got a clarification statement by the original buyer KARIBAN, which makes it clear.”
The clarification states that the KARIBAN did not insert this clause in its master LC in favor of ZXY International. The clause was inserted by SCB Dubai, which they have been doing in every LC since 30th November 2022.
This clause does NOT state that there is any sanction against Bangladesh. ZXY International confirmed that they will remove the clause in the LC, and if required they will issue a fresh LC without that clause.
UNB . Dhaka