Continuous reforms of business laws commendable

The government is updating the various laws & rules promulgated by the military rulers and also making them business friendly to accelerate economic activities in the greater interest of the nation.

The governmenthas issued The Importers Exporters and Indentors registration order 2023 dated 3rd January 2024 replacing the previous order namely The Importers Exporters and Indentors registration order, 1981 issued on 2nd October 1981.

The repealed order of 1981 defined Indentors (article 2- G) as "Indentor" means a firm, institution, body, organization, person or group of persons registered as an Indentor and holding sole agency; dealership or distribution right from a supplier abroad". The rule identified Indentor as a local trading company.

By this time there were many changes in the policy of the government by accepting open market policy and abiding by the trading rules of World Trade Organization (WTO).Ministers from WTO member-countries decided at the 1996 Singapore Ministerial. They have defined the cross-border service trade. Theconfirmed four modes of supply, which include: Cross-border trade (Mode 1), consumption abroad (Mode 2), commercial presence (Mode 3), and temporary movement of natural persons (Mode 4).

Bangladesh has biding obligation to accept the definition of service export incorporated in the Singapore Ministerial Conference in 1996 of WTO. The global organization promoted than exportableof service as exportable commodity.Accordingly, Bangladesh government has incorporated service export in the export policy order in 2015 and listed indenting under mode 2as exportable service. Later,government through an office order dated 1st October 2018 of the Chief Comptroller of Import & Export hasdeclared the Indentors as service exporterand finally issued another public notice on 11th December 2018 confirming the issue of export registration certificates to the Indentors.

After all these changes in policy of the government, the definition of Indentor mentioned the Importers Exporters and Indentors registration order 2023 as ordinary agent or dealer is contrary to the earlier decisions that Indentors are service exporter.

On the other hand, as per the new order, one member of one family will be eligible to get an import, export or indenting license. The eligible enterprises for registration (Sec 4) of The Importers Exporters and Indentors registration order 2023 imposed restriction on the citizens and allowed to get only one license per family.  These terms & conditions of registration of importers, exporter and indentor has curtailed the fundamental rights of the citizens.

Any person who attains the age of 18, is eligible for National Identity number (NID) and an dependent from his family. He has the right and privilege of being an independent citizen and should have independence to choose a profession and get the business license without any restriction on basis of family membership as a fundamental right of a citizen.

In a similar manner the private limited company was also treated as proprietorship firm considering the registration as importer, exporter or Indentorignoring the status of independent artificial person. This restriction conflicts with the treatment of limited liability companieswithout giving status of artificial person as per Companies Act, 1994. An artificial person (company) is independent from its shareholders. A can sue or be sued for its actions. A company should be eligible to get business license in the name of the company.

The fundamental right ensured under section no: 40 of freedom of profession and occupation given the mandate that subject to any restrictions imposed by law, every citizen possessing such qualifications, if any, as may be prescribed by law in relation to his profession, occupation, trade or business shall have the right to enter upon any lawful profession or occupation, and to conduct any lawful trade or business.

In another article (13-c) of the constitution, referred to the principles of ownership that theprivate ownership, that is ownership by individuals within such limits as may be prescribed by law.19. (1) The State shall endeavour to ensure equality of opportunity to all citizens.

Regarding Sole agent (aritcle 4- subclause 9), the order has given a bar on working with second Principal (overseas partner) of prior approval from the office of Chief Controller of Import & Export (CCI&E) and this is impossible to abide by any importer, exporter and Indentor. This restriction will limit the source of supply.

The standard practice and customs of agency business is that Importers, Exporters and Indentors look for overseas buyers /sellers through correspondences and web search and start business ondeal-to-deal basis and in due course of business, become sole agent after gaining confidence between two partners companies in home and abroad.It is an impossible condition that overseas partners agree to sole agency before any business experience. Moreover, the prior approval of business relationship with overseas companies from CCI&E is a time-consumingprocess. Due to nature of the products, some of the products have validity of price is a few hours and Importer, Exporter and Indentor cannot take permission from the office of CCI&E within such short period of time. This condition will curtail the opportunity of business and limit the competition. It will increase the cost of products.

Bangladesh Competition Act 2012 enacted to facilitate competition and guide the government to remove anti-competitive acts and rules. Any restriction or condition which may be inti-competitive shall be contrary to existing competition law.

There was similar policy in the registration of Indentors with Bangladesh Bank in the clause 18A (1) for obtaining permission from Bangladesh Bank for doing business with any new overseas suppliers. The original Foreign Exchange law of 1947 had no such clause, but it was incorporated with the Foreign ExchangeRegulation (Amendment) Ordinance, 1976.  Subsequently considering the difficulties of Indentors and also for Bangladesh Bank, the clause been deleted through Foreign Exchange Regulation Amendment Act 2015. It is also important thatany barrier to the free flow of products is contrary to the concept of free market as promoted by WTO.

Article 9 of the order has given very wide power to official of CCI&E for inspection and (article 10) have given very uncertain and unexplained authority to CCI&E for cancellation of import export or indenting registration as some of the points need clarification and interpretation. Those are - (Ka) if license holder violates any clause of the order The Importers Exporters and Indentors registration order 2023, for violating anti- money laundering law (kha), for under invoicing and over invoicing, violation of any rule or order (ga), violating any law of supply, stock, quality and priceetc, any office related to indenting business (gha). There are specific laws to regulate the supply, stock, quality and price and indenting business and additional punishment under the Importers Exporters and Indentors registration order 2023 will impose regulations of dual law. On the other hand, there is no specific rule for determination of the offences under the subject order.

The Constitution ensures that no person shall be punished for the same offence more than once. A person is not to be put in jeopardy twice for the same offence. This principle has been incorporated in Article 35(2) of the Constitution.The Penal Code under section 71 prescribes a limit of punishment and prohibits double punishment for the same offence.

The Import, Export and Indentor (Registration) order 2024 may be revisited to amend certain clauses considering the existing laws of the countries, previous experience of other laws and WTO rules to facilitate trade and investment in the country.
 
The writer is a Non-Government Adviser, Bangladesh Competition Commission